Golden Valley Electric Assocation has announced a major reduction in its Fuel and Purchased Power rates, a move that will benefit business and residential customers with lowered electric bills.
GVEA says the effectie reduction in rates will be reduced by 21.5%.
The decrease is a direct result of GVEA entering into natural gas–fired power agreements with Chugach Electric Association in Anchorage, allowing more natural gas–fired power to be received up the intertie, which is ultimately cheaper than oil–fired generation.
Additional savings have been obtained by reducing diesel consumption and by adding economy power by scheduled maintenance shutdowns in September and October.
Cory Borgeson, President and CEO of Golden Valley who made the announcement today at the weekly luncheon of the Golden Heart Fairbanks Rotarians, says the decrease in purchase power rates will have an immediate effect on electric bills.
"The reductions, depending upon your class of service, will be somewhere between 11 and 13 percent," said Borgeson. "Again, this is for the next quarter, it will get adjusted again the quarter after that, but we think it will last for the most part of the year because of the big savings, counting from the energy from Anchorage."
Golden Valley recently requested rate hike increases of 6.6% with the Regulatory Commission of Alaska.
This increase would be seen on the Utility charge portion of an electric bill, not the fuel and Purchased Power charge which being reduced with the recent announcement.
GVEA officials say the Fuel and Purchased Power charge reduction should offset any increases to the Utility charge.
Rates are calculated quarterly.
Current utility rates do not factor in capital costs associated with the Eva Creek Wind Farm which recently started generating power.