Valley Electric board OKs power cost adjustment

By MARK WAITE

VIEW STAFF WRITER

Valley Electric Association board members Thursday approved a power cost adjustment for the members, in the event the cooperative has to buy power on the spot market to make up for any shortfalls.

At this time, VEA doesn't expect to have to impose the adjustment on its customers, unless there is a heavier demand than expected, VEA General Manager Lou Holveck said.

"We think right now that we have an adequate supply of electricity at costs that are known and included in our current rates and projections," Holveck said. "Right now, I don't see an increase to anybody. But if we have an extremely cold month or an extremely hot month, or we have a sudden, huge spurt of growth and the amount of energy that we have contracted for is not enough and we have to go out into the market, that's when this becomes a factor," Holveck explained.

The board action merely sets up an understanding where if there was an extremely high power bill, cooperative officials would have a basis to go before the VEA board and explain why they need to set the surcharge, Holveck said.

A news release issued by VEA states, "The volatile price of electricity in the power market has forced Valley Electric Association to pass through to its members the cost of additional wholesale power VEA may need in the future to meet increased consumer demand."

"At its Jan. 25 monthly meeting in Pahrump, the nonprofit power cooperative's board of directors discussed the potential for large financial losses to VEA if it had to buy additional power for members because of extreme weather conditions."

The amount of a power cost adjustment would depend on the spot price of power at that time and any power cost adjustment would be averaged out over their 12-month bills, VEA officials said. The news release states, "The power cost adjustment could possibly appear for the first time on VEA's March 2001 monthly bills for any power that VEA might be forced to buy in addition to the power that it has already forecast for January 2001."

VEA states the volatile price market has pushed the price of wholesale power up to as much as 25 cents per kilowatt hour for a portion of VEA's purchased power, more than four times the 5.662 cents per kilowatt hour VEA charges residential customer. VEA also charges a $15 facility fee for each residence. The power cost adjustment would be a third charge on the bill.

VEA currently buys a third of its power resources from hydroelectric dams on the Colorado River and two-thirds from private power suppliers, mainly Enron Corp., the cooperative states. The co-op pays fixed rate charges for these energy resources.

Valley Electric provides power to 11,500 customers from Sandy Valley, near Jean, to Fish Lake Valley, just east of Bishop, Calif., although the large majority of customers are in Pahrump.