2021 GVEA Legislative Information Packet

GOLDEN VALLEY ELECTRIC ASSOCIATION

LEGISLATIVE INFORMATION PACKET

THANK YOU. The GVEA Board and I appreciate the opportunity to meet with you to share areas of focus and detail our efforts to position GVEA for the future.

GVEA serves over 36,000 members, with 44,800 meters. During this past year – and it was a weird year – we maintained focus on our mission to safely provide members with reliable electric service, quality customer service and innovative energy solutions at fair and reasonable prices.

In 2021 we celebrate our 75th anniversary. For 75 years we have proudly served Interior Alaska.

Now, we are poised to make big decisions about the future of power generation, decisions that will serve us for decades to come. We do not make these decisions alone, we make them with input from the communities we serve and support from leaders like each of you. We thank you for that partnership.

JOHN BURNS

GVEA President/CEO

02 | LEGISLATIVE INFORMATION PACKET 2021

CONTENTS

Overview Policy Positions Railbelt Reliability COVID Response Power Generation Member Survey Strategic Directives Click HERE for our Year in Review, a closer look at all things GVEA! 03 | LEGISLATIVE INFORMATION PACKET 2021

OVERVIEW • Incorporated in 1946, Golden Valley Electric Association took shape when a small group of Alaskans became interested in bringing electric service to the Interior's more rural areas. These pioneers applied to the Rural Electrification Administration, which granted a loan to form a not-for-profit rural electric cooperative.

• Annual kilowatt-hour sales in 2019 were 1.1 billion. The average residential member consumed 572 kWh per month.

• Peak load in 2019 was 194.7 megawatts, which was set at 5pm on December 20 (temperature was -31o F). The system peak of 223 MW was set in December 2007.

• GVEA operates and maintains 3,282 miles of transmission and distribution lines and 35 substations, including one mobile substation. The system is interconnected with Fort Wainwright, Eielson AFB, Fort Greely, the University of Alaska-Fairbanks and all electric utilities in the Alaska Railbelt, which extends from Homer to Fairbanks.

• Energized in Oct. 2003, the 97-mile, 230-kilovolt Northern Intertie, from Healy to Fairbanks, helps GVEA maintain reliability. Additionally, GVEA is the northern control point for the Anchorage/Fairbanks Intertie, which serves most Railbelt communities. Both interties allow GVEA to augment its 381 MW generation capacity with an additional 70 MW from the Anchorage area.

• GVEA supports renewable power. SNAP, GVEA's renewable energy program, was launched in 2005. In 2010, SNAP Plus became GVEA's net metering program.

Currently, a total of 434 renewable energy producers participate in the SNAP program, of which 99% of capacity comes from solar.

• One of the world's most powerful energy storage system in terms of megawatt output belongs to GVEA. The Battery Energy Storage System (BESS), came online in November 2003. It can provide 27 megawatts of electricity for 15 minutes or up to 40 MW for less time.

• GVEA's Home$ense Audit program helps residential members save energy (and money) by assessing the energy usage and electrical efficiency of their home. For more information, visit: www.gvea.com/save.

• Good¢ents kicked off in March of 2011. Nearly 70% of the co-op membership contributes monthly to the bill roundup program. A separate board of trustees reviews applications and awards grants to non-profit organizations in need. Since 2011, a total of $1,069,882 in Good¢ents grants have been awarded. For a complete list of Good¢ents recipients or to access an application, visit: www.gvea.com/goodcents.

04 | LEGISLATIVE INFORMATION PACKET 2021

POLICY POSITIONS Support for state investment in electric infrastructure and leveraging federal funding opportunities Electric infrastructure is the bedrock of the state’s economy and the operation of the daily lives of Alaskans. Recognizing that the state is facing significant fiscal challenges, the Alaska legislature must leverage every federal dollar available that benefits infrastructure with a strong emphasis on electric infrastructure – generation, transmission, and distribution. The legislature should direct the appropriate state agencies to work with electric utilities statewide to determine where funding can best serve Alaskans through investment in electric infrastructure, including renewable energy technologies and digital communications infrastructure.

Concurrently, the legislature should call on Congress to focus on funding for electric infrastructure when passing spending bills and when funding federal agency operations. Many areas of the United States continue to benefit from long running federal power marketing administrations (PMAs) that have brought low-cost power to vast reaches of the country. Alaska has not been afforded such federal programs. Through robust state and federal investment in electric systems, Alaska would strengthen its economic health during and following the COVID-19 pandemic.

Support statutory clarity on wildfire liability Alaska’s electric utilities work hard to maintain their rights-of-way for transmission and distribution lines but have no control over vegetation that grows outside their rights-of-way. This creates a scenario in which trees or other vegetation outside the right-of-way -- but tall enough to fall into the right-ofway -- can cause damage, such as a wildfire.

The Alaska legislature can protect electric ratepayers by making clear in statue that electric utilities cannot be held liable for damage, death or personal injury from contact between vegetation and the utility's facilities if the vegetation is not located entirely within the boundaries of the utility's right-of-way. The state can help mitigate fire risk by continuing to provide funding for the mitigation of spruce beetle-killed trees, which are a significant problem in many parts of the state.

Alaskans already pay some of the highest costs for electricity in the country.

Making Alaska utilities, and ultimately their customers, responsible for damages caused by vegetation outside of utility control will drive those costs even higher. This could raise the prospect of financial difficulty for utilities themselves, as has happened in California.

05 | LEGISLATIVE INFORMATION PACKET 2021

POLICY POSITIONS Federal support for electric infrastructure and clean energy innovation Electric infrastructure is the bedrock of the nation’s economy and the operation of the daily lives of Alaskans and all other Americans. Congress and the administration should recognize that Alaska electric consumers have not benefited from power marketing administration-style federal programs like many areas of the Lower 48. Consequently, it is imperative that Congress include funding for electric infrastructure – generation, transmission and distribution – that helps Alaska electric utilities provide their consumers with the safest, most reliable and most modern means of power supply. On the latter, Congress and the administration should invest meaningfully in clean energy technologies– such as hydropower, solar, wind, batteries, geothermal and advanced nuclear.

Support for policies that increase the purchase and use of electric vehicles As Alaska electric utilities and businesses continue installing electric vehicle (EV) charging stations and as more of the barriers to EV usage are being addressed through technological advances and consumer education, more Alaska residents and businesses will be considering the purchase of EVs. Congress and the administration should pursue laws and policies that promote the use of EVs through offering tax credits or other incentives to help support EV purchases until price parity with internal combustion vehicles is reached.

Offering incentives to business and governments for the deployment of EV charging stations is another important way to increase EV usage while decreasing fossil fuel consumption and lowering carbon emissions. At the same time, the federal government should add EVs to their fleet of vehicles where appropriate to help lead the way toward wider adoption of EVs. EVs are beneficial to electric utilities by providing a new load during times of the day when loads are typically at their lowest since EVs are commonly charged at night. Many areas of Alaska have seen increased use of EVs, particularly in cities where road miles are very limited. A significant push from the federal government to facilitate EV ownership would be advantageous for drivers and for electric utilities that provide EVs’ power source.

06 | LEGISLATIVE INFORMATION PACKET 2021

RAILBELT RELIABILITY COUNCIL

In December 2019, all six Railbelt utilities signed a Memorandum of Understanding (MOU) to move forward with an organization to work more closely together to manage Alaska’s largest interconnected grid.

The Railbelt Reliability Council (RRC) was established to define and enforce electric reliability standards, coordinate joint planning through an integrated resource planning process and ensure consistent interconnection protocols for utilities, independent power producers and others who would like to use the grid.

The RRC also works to identify more effective ways for the Railbelt electric system to reduce fuel costs for ratepayers. The RRC met requirements established in a 2015 letter from the Regulatory Commission of Alaska (RCA) to the Alaska State Legislature indicating the need for reform on the Railbelt and requesting voluntary solutions from the utilities.

As in similar structures that exist throughout the Lower 48, the RRC is governed by a mix of utility and non-utility stakeholders. In addition to the six utility seats, the 12-member Board includes six non-utility seats.

In 2020, the RRC established the Implementation Committee to help stand up and develop the foundational documents of the organization. The utilities also, in collaboration with non-utilities, are working to meet the direction set forth in Senate Bill 123, regarding the formation of a new Electric Reliability Organization to support future energy development. While much work remains, there has been significant progress to establish the RRC which will be beneficial to all Railbelt utility members.

07 | LEGISLATIVE INFORMATION PACKET 2021

COVID-19 RESPONSE

BENEVOLENT FUND

The COVID-19 pandemic has caused financial hardships for families in our communities—many of our members faced reduced wages or were unable to find work. We want to continue to do everything in our power to help members keep their electricity on during this difficult time.

GVEA believes that it is in the best interest of our community and members to create the GVEA Benevolent Fund – Members Serving Members, to provide financial assistance to eligible members who: are having difficulty paying their electric bills, worked with GVEA to enter into acceptable payment terms, and who, absent financial assistance, would otherwise be subject to disconnect of electric service.

To help start the fund, GVEA made a $250,000 contribution from GVEA’s nonoperating funds; these funds have no effect on GVEA operations or member rates.

Members of the public expressed interest in making contributions to help others in the community. Through this program, individuals have the ability to make contributions to the fund.

For more information, please visit www.gvea.com/benevolent or call GVEA at (907) 452-1151.

MEMBERS SERVING MEMBERS – THIS IS THE CORE PRINCIPLE ON WHICH GVEA’S BENEVOLENT FUND IS FOUNDED. WE ENCOURAGE ALL MEMBERS, WHO ARE ABLE, TO JOIN US IN THIS CAUSE. 08 | LEGISLATIVE INFORMATION PACKET 2021

GENERATION DIVERSE SOURCES OF POWER

1. Zehnder Power Plant Established in 1972 41 MW Diesel 2. Delta Power Plant Established in 1976 27 MW Diesel 3. North Pole Expansion Power Plant Established in 2006 60 MW Naphtha (LM 6000 turbine) 4. Eva Creek Wind Established in 2012 12 turbines, with a capacity of nearly 25 MW

FUEL DIVERSITY

5. North Pole Power Plant Established in 1976 120 MW Diesel (two 60 MW turbines) 6. Solar Farm Established in 2018 Size: 563 kW Solar PV System 7. Healy Power Plants Established in 1967 and 2016 28 & 60 MW coal 8. Battery Energy Storage System (BESS) Can provide 25 MW of power for 15 minutes, or up to 40 MW for less time 9. Bradley Lake Hydroelectric Established in 1991 20 MW Hydropower 10. Purchased Power Alaska Environmental Power GVEA purchases up to 2 MW of power Aurora Energy - GVEA purchases up to 25 MW Natural Gas Generation - GVEA can purchase up to 70 MW using the Northern and Alaska Interties

SNAP - GVEA's Renewable Energy and Net Metering Program • 434 members are SNAP producers • 99% of SNAP production is from solar energy • 2020 produced 1.2 million+ kWhs

09 | LEGISLATIVE INFORMATION PACKET 2021

MEMBER SURVEY Golden Valley Electric Association periodically surveys members to measure satisfaction and get feedback on issues, identify member expectations and better understand member views. Here are some key findings from the survey conducted in December 2020.

MEMBER SATISFACTION

Increase in overall satisfaction with GVEA by its co-op members.

Overall mean rating of 8.03, which is significantly higher than the study conducted in 2017.

Overall satisfaction with GVEA is considered “good.”

Compared to past studies, 49% of co-op members in 2020 were more likely to give the top “9” or “10” rating.

Longer-tenured members are shown as more satisfied than are newer members, while older members are also more satisfied than younger members.

ISSUES MOST IMPORTANT TO MEMBERS

Working to keep rates low Charging reasonable rates Being focused on members' best interests Helping members to be more efficient in electric use Dedication/support of local community Communicating about changing energy costs Operating with concern for the environment

GVEA STRENGTHS

Friendly, courteous employees Highly trained and professional employees Minimizing longer outages Restoring power quickly Minimizing blinks, momentary outages Easy to contact Convenient payment options Accurate and understandable billing Community support Resolving any issues with electric service

10 | LEGISLATIVE INFORMATION PACKET 2021

STRATEGIC DIRECTIVES

11 | LEGISLATIVE INFORMATION PACKET 2021

12 | LEGISLATIVE INFORMATION PACKET 2021