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2004 Annual Report
2004 Annual Report - PDF (1.3MB)
A Message from the President & CEO
"Value Down The Line"
GVEA President & CEO Steve Haagenson
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Value. It’s a hard word to quantify. Yet we all know it’s something we want. As a concept, value relates to price. It communicates substance and importance. And it relates to evaluation and measurability.
We strive to deliver value that embodies all of these qualities. It’s built into the way we do business every day and how we plan for the future.
There’s no way around the fact that we’ve all been impacted by higher fuel prices – you at the gas pumps, the co-op at its power plants. We know no one wants to pay more for electricity and we have strategies in place to help minimize these increases.
Interim financing is one strategy. Through good short-term and longterm financing packages we saved over $3 million on the Battery Energy Storage System (BESS) and the Northern Intertie projects.
Another way we keep costs down is by using capital credits to fund major projects like power lines, substations and plant upgrades. Capital credits represent members’ share of the margins, or profits, the co-op earns from year to year. Using capital credits for these projects allows the co-op to minimize borrowing and decreases debt load. This is exactly what capital credits are intended to do.
One innovative way we’re balancing the impacts of growth and minimizing costs to members is by forming a new cooperative. It’s called the Interior Alaska Generation and Transmission Electric Cooperative, Inc., or G&T for short.
The G&T allows us to separate costs for power plants and other major construction projects from operating costs. The G&T allows GVEA to be more responsive in today’s changing business environment. It also allows us to reduce our revenue requirement and pass that savings on to our members.
Another strategy we’re pursing is the collaborative effort among Railbelt utilities to form a Joint Action Agency ( JAA). One advantage of the JAA is that it puts Railbelt utilities on the same page to manage power generation assets and future power needs. The State may divest itself of its energy assets, such as the Alaska Intertie, Bradley Lake Hydroelectric plant and the idle Healy Clean Coal Plant. By forming the JAA, Railbelt utilities are creating a vessel that could accept these assets. Finally, it creates the possibility of gaining tax exempt bonding status for financing new infrastructure.
Golden Valley holds a unique place among cooperatives as we own several of our generation sources. And we continuously evaluate where to generate or purchase the most economical power. Our diverse fuel supply of coal, oil, hydroelectric and gasfired power gives us some flexibility if the price of one resource skyrockets.
Another way we measure the value we deliver is through reliability. And we know reliable service is important to our members. We reduced overall outage time per consumer by 20 percent last year. The BESS is directly responsible for this. In 2004, the BESS worked automatically during 56 events and prevented outages from occurring for nearly 290,000 consumers. Just as we planned, the operation is so seamless, our members don’t even know the BESS is at work.
Beyond the technical and financial aspects of the utility business is the issue of providing exceptional service to our members and our communities. We deliver this value in the office and in the field. It’s in the service our courteous and efficient representatives provide. And in the work of our line crews day in and day out to ensure reliable power.
At the corporate level, employees perform live electrical safety demonstrations and serve as science fair judges to make a difference for our youth. And board members and employees volunteer countless hours of their personal time to organizations throughout our communities.
So value is a concept that’s imbedded in the decisions we make whether they’re technical, financial or personal. And that’s not surprising. Value is built in to our mission—to provide the best value in products and services through innovation and individual commitment.
That’s Value Down The Line.
