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April 24, 2013

GRDA rate decrease to save Claremore $1.3M

CLAREMORE —

The Grand River Dam Authority  will lower rates in July, fulfilling a commitment to customers. GRDA will return rates to 2009 levels and save Claremore approximately $1.3 million.
“We have about a $30 million decrease in bond payments,” GRDA CEO Dan Sullivan said. “This returns about $28.6 million to rate payers.”
GRDA costs have decreased due to the bonds being paid off. The reduction in rates will be directly passed on to customers, such as the City of Claremore.
GRDA is a wholesale energy provider and Claremore Electric purchases the power to resale to Claremore residents.
Claremore officials have not determined if the rate decrease will be passed on to Claremore Electric customers or be used to pay for needed city infrastructure improvements.
The Claremore City Council recently opposed a proposal from GRDA in which the introduction of the rate decrease was accompanied by a discussion of the possible implementation of a surcharge for peak usage periods.
“No surcharge has been approved by our board,” Sullivan said.
The surcharge is only an option that has been discussed and is viewed toward industrial customers, he added.
GRDA is looking at ways to lower the peak usage to improve the company's ability to better prepare for the total energy demand of all customers during periods of peak usage.
Claremore council members voiced concerns that a surcharge could cost the city approximately $6 million, due to the current rate structure of Claremore Electric. 
Claremore residents are billed 30 days behind actual power consumption. City employees stated concerns that the surcharge would create a deficit in power revenues, forcing the city to take a loss in revenue.
Claremore Electric funds a significant portion of the city's budget, a potential loss in revenue could create issues with budget planning, according to city officials.
GRDA officials recently provided cost estimates based on past usage by Claremore Electric and determined if a surcharge was to be implemented in the future it would only cost the city approximately $410,000 not $6 million.
Claremore officials will evaluate current rates in the next few months during the upcoming budget cycle.
GRDA officials report that if a surcharge is approved it would not be in effect until 2014 and many other alternatives are currently being considered.

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