The Crested Butte News Serving the Gunnison Valley since 1999
Official vote on December 18
By Mark Reaman
A one-hour meeting between Gunnison County Electric Association staff, board and members on Tuesday evening did not bring up major objections to the proposed average 4.5% rate increase that is under consideration by the board. While a few members said their business would feel a rate increase larger than 4.5%, others asked if GCEA could possibly give a break to seniors, especially those on fixed incomes.
The GCEA board will officially consider and take action on the rate increase at the regular board meeting that takes place Wednesday, December 18.
The GCEA estimated that the average monthly residential member bill increase would be about $6 while the monthly service availability fee will increase $2 for most residential and commercial accounts. According to the GCEA, “the rate adjustment is needed to cover increasing operating costs and ensure continued delivery of safe and reliable electrical services to GCEA members.”
GCEA chief financial officer Mark VanderVeer started off the Tuesday meeting outlining how the GCEA works to keep costs down and rates affordable. Using slides, he showed that since 2014 inflation had gone up 32% while electric rates had increased just 24%. Most of that disparity was experienced in the last six years. He said for 2025 the GCEA has a budget of approximately $24.8 million “with a thin operating margin of $401,363 or 1.6%. Historically the operating margin has been at between three and four percent and we need to get back to that.”
While stating clearly that the GCEA doesn’t take rate increases lightly, VanderVeer said “the GCEA is also not immune to rising costs. At the end of the day a 4.5% rate increase is as low as we can go and have a reasonable operating margin at the end of the year.”
The GCEA board is absorbing some of the increase needed to meet the 2025 budget by using deferred revenue to mitigate member impacts. VanderVeer explained that the 4.5% increase was an average rate increase, and it would be allocated differently to different rate classes.
He also said the expectation is that fewer kilowatt hour sales of electricity were expected in 2025 compared to some previous years. That, he said is not unusual and electricity usage varies year to year. Responding to a member question he said usage varies depending on a number of factors including things like weather, people’s usage patterns, and the number of visitors that come to the valley.
VanderVeer also went over a number of ways the co-op strives to save money. He said the Taylor River Hydro project would actually save the GCEA about $45,000 per year. Millions of dollars in maintenance are saved due to the contract with its primary wholesale energy supplier, Tri-State Generation and Transmission Association.
“The rate we pay to Tri-State is fair. A lot is included in it, so I think there is an overall savings to be with Tri-State,” added GCEA CEO Mike McBride.
Figures show that while only 47% of its members use paperless billing, that saves the co-op $52,000 annually. Automated meters save approximately $300,000 a year and GCEA has received millions of dollars in federal grants to offset costs.
“Every decision we make includes the thought on how it impacts customer rates,” said McBride.
VanderVeer said the GCEA was committed to efficiency, prioritizing smart spending, resourcefulness and cost controls to deliver maximum value to the members. “Our 4.5% rate increase is necessary to ensure reliability to our members,” he said.
Asked by an interested GCEA member how GCEA rates compared to similar towns in the area, McBride said Buena Vista has similar rates but might be a bit higher. Montrose, he said, was probably cheaper in part because they sell more kilowatt hours per mile of line thus bringing down some fixed costs.
The same member said his business would actually see an increase significantly higher than 4.5%. He projected a 9.5% increase or about $1,200 a year. “Seems some businesses will feel more of the brunt,” he said. “The rate increase is impacting different customers, differently.”
McBride said that was true. “There will be different experiences for different rate classes. Commercial class did see a larger increase,” he said while noting that the board is looking at revamping the GCEA rate design in the future, but that concept was in a very early stage of the process.
Crested Butte resident Sue Navy asked if the GCEA could consider giving seniors a discount on their bills. “People on a fixed income would greatly benefit from that as costs go up,” she said suggesting the service charge could be a place to implement such a break.
“That is an interesting question,” responded McBride. “We haven’t looked into that, but we can. Not sure how the state laws we abide by would impact that.”
After an hour the meeting concluded, and McBride promised the board and staff would keep working to provide the best service possible to GCEA members. “We will take into account the questions and comments we heard tonight going forward,” he said.
The last rate increase from GCEA came in March of 2024 with an overall increase of 5%. This latest jump will begin January 1, 2025.
