Hard at work for our members, the Grand Valley Power Board of Directors plays a vital role in shaping the cooperative’s future.
The board accomplishes this through three responsibilities: Establish policies and strategic direction, hire and evaluate the CEO, and set fair and equitable rates.
All of these tasks are heavy lifts, but perhaps none of them will impact members more than the two that they must accomplish over the next few months: hiring a new CEO and setting fair and equitable rates.
CEO SEARCH
After 14 years of service to Grand Valley Power members, I will retire in just a few short months. Your board has launched a nationwide search for my successor, partnering with a search firm that knows the electric cooperative business model. The board’s goal is clear: find a visionary leader who is deeply committed to our community, is driven by what is best for all members, and understands the cooperative business model.
This is no small task. The next CEO will guide GVP through the opportunities and challenges of an evolving energy landscape — balancing reliability, affordability, and innovation — while preserving the hometown service our members count on.
FAIR AND EQUITABLE RATES
Setting rates is one of the board’s most complex and consequential responsibilities. The process requires knowledge of the opportunities and threats to the electric industry, member needs, the cooperative’s history and structure, and an understanding of revenue sources and expenses. As a not-for-profit, member-owned cooperative, Grand Valley Power operates at cost. This means the board sets rates to generate only the revenue necessary to maintain a reliable system and meet growing energy needs while providing the hometown service that our members expect and deserve.
It sounds simple enough, except that in today’s unpredictable energy industry, it isn’t. Directors must consider variables such as wholesale electricity prices, fuel cost adjustments, demand charges, transmission fees, and system maintenance costs, many of which are outside our control. Then they must consider other variables — weather, supply chains, world politics — over which they have absolutely no control. It is like pondering the first move in a game of 3-D chess.
COST-OF-SERVICE STUDY
To ensure fairness and accuracy in rate setting, the board commissions a cost-of-service study every few years. This study analyzes whether the cooperative’s current rates produce enough revenue to cover the true costs of providing service. It’s board policy to consider doing this every few years because as we all know, things change, and they can change quickly. The latest study revealed three important trends:
- Costs are rising.
- Revenue has declined due to fewer kilowatt-hour (kWh) sales.
- The number of consumers is growing.
To explain in more detail: Grand Valley Power has enjoyed steady growth over the past 15 years, recently surpassing the 20,000-meter threshold. Traditionally, more meters meant more kWh sales—and therefore more revenue. But in recent years, kWh sales have not increased at the same pace as our consumer growth — or our costs. This is not sustainable.
The main reason is member-owned generation, especially solar. As more members generate some of their own electricity, they purchase fewer kilowatt-hours from the cooperative. While this is a positive for clean energy independence, it also means our revenue is no longer keeping pace with the costs of maintaining the reliable, resilient system that serves all members.
This is a problem that can be solved by aligning our revenue recovery with the factors that drive costs. And this is what the board is doing right now. This could mean restructuring rates and, if necessary, increasing them.
MEMBER-FIRST PHILOSOPHY
Your board understands the significance of these decisions and what they mean to members. Whether it’s selecting a CEO who will lead with vision and integrity or setting fair and equitable rates, they are committed to the member-first philosophy that has guided Grand Valley Power since 1936.
The months ahead will shape the cooperative’s future for years to come. And through it all, your directors remain focused on ensuring Grand Valley Power delivers on its mission: providing safe, reliable, affordable electricity—backed by the hometown service you know and trust.
Author: Tom Walch, Chief Executive Officer
