GVEA fuel charge drops 12.6 percent for Interior members

Golden Valley Electric Association's fuel charge dropped 12.6% on Tuesday, cutting about $15.12 a month from the bill of a residential member using the co-op's average of 581 kilowatt-hours.

The Fuel & Purchased Power rate, which covers GVEA's cost of fuel to generate electricity and of power purchased from other utilities and independent power producers, fell from 20.652 cents to 18.049 cents per kilowatt-hour, a reduction of 2.603 cents. The new rate runs through Nov. 30. GVEA recalculates the charge every quarter using projected costs for the coming three months and actual costs from the previous three.

The drop reverses only part of what members absorbed this summer. The co-op raised the same charge from 12.779 cents on June 1, an increase of about 61% that added nearly $46 to the average monthly residential bill. GVEA CEO Travis Million told KUAC that diesel the co-op buys for generation had risen from about $2.50 a gallon in February to $5.10, driven mainly by the war in Iran, and that the co-op no longer has access to cheaper Southcentral power.

GVEA said fuel prices have since stabilized, but two unplanned outages between June and August forced more diesel burning and less coal generation than projected. Healy Unit 1 was down 12 days. The North Pole Combined Cycle Plant was down 28 days for a steamer repair. Those costs are built into the September rate and are the main reason it did not fall further, the co-op said. Energy sales came in slightly above projections, which spread costs over more kilowatt-hours.

Two more outages are already scheduled and folded into the current projections. Healy Unit 2 is expected offline about 27 days for its planned fall outage. North Pole GT-1 is projected offline about 40 days for a major overhaul.

GVEA's own materials show it has been unable to buy power over the Northern and Alaska Interties except in emergencies since February 2024. Sen. Robert Myers, speaking at a June 17 Senate Minority Caucus press conference, said, "Fairbanks is already living South Central's future. We're paying almost 40 cents a kilowatt hour for electricity."

Not everyone views the September relief as resolving the underlying problem. Rate-analysis site Nectar, in its guide to GVEA's rates, has flagged that high and volatile fuel and purchased-power charges continue to place an unsustainable burden on Fairbanks-area members. GVEA's Sept. 1 announcement did not address that critique.

Members who cannot pay can reach GVEA at 907-452-1151 to arrange payment.