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April 25, 2013

‘Promises made, promises kept’ GRDA’s head on rate decrease

CLAREMORE —

The Grand River Dam Authority will lower  rates in July to fulfill a commitment made to customers to return rates to 2009 levels.
“Promises made, promises kept,” CEO Dan Sullivan said.
The decrease in rates has been done in a revenue neutral way that will save municipalities across the state millions, he added.
“We have about a $30 million decrease in bond payments,” 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 wholesale customers.
GRDA is a wholesale energy provider and several Oklahoma municipalities purchase electricity to resale to area residents.
“We are a cost of service organization,” Sullivan said.
GRDA passes only the cost of the service on to municipalities allowing each city to determine the rate to charge their customers.
Some cities use the revenue generated thru power resale to fund system repairs, improvements or other city budget items.
Other towns simply pass on the cost of power to customers, with little or no revenue earned by the municipality.
The 2013 GRDA rate decrease will provide municipalities with opportunities to reinvest in their system, according to Sullivan.
GRDA is also looking at other ways to reduce the overall cost of power production while insuring energy will be available during periods of peak usage.
One possible solution is the implementation of a surcharge for industrial customers. 
The fee could be used to encourage behavior modification to ease peak demand on the GRDA system, according to GRDA officials. By modifying behavior consumers have the ability to keep power costs down, according to Sullivan. The higher the demand for power, the more infrastructures needed to produce it, he added.
GRDA is working to create the most cost effective product while responsibly managing available resources.
At this time the GRDA board has not approved the implementation of peak usage surcharges, according to Sullivan.
Additionally, GRDA has reached out to consumers for feedback and is considering multiple solutions for service improvements. Government regulations and ongoing changes to the energy industry may be prompting action, however GRDA continues to plan ahead to insure the long-term energy needs of customers can be met.

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