Look both ways, then prepare for tomorrow

Power for Progress…
A weekly column from the Grand River Dam Authority

While every monthly meeting of the Grand River Dam Authority Board of Directors is concerned with solid and sound operations of the utility, the December meeting stands out for at least two key items.

Plans and preparations … GRDA Chief Financial Officer Carolyn Dougherty (left) and Superintendent of Rates Analysis Jennifer Weatherford explain the Authority’s 10-year financial forecast during a meeting with customers in January 2012.  The beginning of a new calendar year is a busy time for GRDA, as new budgets are finalized and other planning meetings are underway.

Plans and preparations … GRDA Chief Financial Officer Carolyn Dougherty (left) and Superintendent of Rates Analysis Jennifer Weatherford explain the Authority’s 10-year financial forecast during a meeting with customers in January 2012. The beginning of a new calendar year is a busy time for GRDA, as new budgets are finalized and other planning meetings are underway.

 

As the board meets for the last time each calendar year, it always votes on a Power Cost Adjustment (PCA) and the preliminary budget for the year ahead. The first item, PCA, is actually a rate adjustment used to pass on fuel and purchased power fluctuations to contracted customers at cost-of-service. It was actually developed with customer input in the 1980s and is currently re-adjusted twice each year (December and June) after much review on the part of key personnel in the GRDA Finance Department.

They must consider all the costs associated with the production of electricity at the GRDA Coal Fired Complex. This includes coal, freight and handling charges. Next, the cost associated with natural gas and its transportation is also rolled into the equation. Finally, costs for any purchased power – which is power purchased from other utilities to meet customer demands when GRDA generation is not adequate – is also brought in to the calculation. Purchased power includes any customer-owned generation and, in the future, will also include GRDA’s new agreement for wind power purchases.

Going forward, the schedule for PCA calculations could be altered. During a series of customer meetings next month, the frequency of the PCA calculation is one of the items that will be discussed. The GRDA Board may then consider a new PCA schedule next spring.

Like the PCA, the development of the preliminary budget is also a long and thorough process. Because it must balance its low-cost, competitive electric rates with long-term financial health, GRDA looks both ways – back at yesterday and forward towards to tomorrow – to achieve that balance. Then it all rests on a not-for-profit foundation that benefits all ratepayers. Historic trends and a 10-year financial forecast – updated and shared with customers each year – help bring it all together.

The truth is you don’t have to look too hard at the GRDA Mission Statement to see a key reason for all this planning, calculating and adjusting. In fact, it’s right there in the opening line: “Our mission is to provide low-cost, reliable electric power and related services to our customers …”

That is the business GRDA has been in for over seven decades.

Headquartered in Vinita, GRDA is Oklahoma’s state-owned electric utility; fully funded by revenues from electric and water sales instead of taxes. Directly or indirectly, GRDA’s low-cost, reliable; electricity serves nearly 500,000 homes in Oklahoma and stretches into 75 of 77 counties in the state. At no cost to Oklahoma taxpayers, GRDA also manages 70,000 surface acres of lakes in the state, including Grand Lake, Lake Hudson and the W.R. Holway Reservoir. Today, GRDA’s 500 employees continue to produce the same “power for progress” that has benefited the state for 75-plus years.

— Justin Alberty
GRDA Corporate Communications Director

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