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Grand Haven Board of Light & Power Adopts FY2023 Budget and Approves Five-Year Capital Plan


Tuesday, May 31, 2022, | Grand Haven, MI — The Grand Haven Board of Light and Power (BLP) approved a FY2023 budget and 5-year capital improvement plan at its Thursday, May 26, 2022 meeting that includes reimplementation of its Power Supply Cost Adjustment (PSCA).

“We zeroed out our PSCA two years ago to facilitate our power supply transition away from Sims and have been absorbing significant wholesale energy market price escalations over the last year,” said David Walters, BLP General Manager. “We are now reimplementing that rate on July 1, 2022, to begin collecting the necessary revenues to recover a portion of these increased power supply costs.”

The reimplementation of the PSCA affects all rate categories. The energy price adjustment is determined monthly using a 12-month rolling average calculation of the actual cost of GHBLP’s power supply cost above a preset “base.” Reimplementation of the PSCA will result in the collection of additional retail revenues of approximately $1.4 million over the twelve months beginning July 1, 2022. Power supply costs are budgeted to increase an additional $3.6 million from FY 2022 to FY 2023, after increasing $1.8 million from FY 2021 to FY 2022. The BLP expects its average revenues per kWh to increase approximately 3.8% in the new budget year.

The new budget also includes relatively small updates to the BLP’s rate structure for two municipal customers, snowmelt pumping and water pumping, to reflect the BLP’s cost to provide service to them. City water pumping will be moved into the General Services Primary Demand Energy rate class and snowmelt pumping will remain in its own, unique rate class.

“As elected officials afforded the responsibility to govern this utility, we have a fiduciary responsibility to ensure its financial stability while maintaining the high standard of service and reliability we provide our customers,” stated Board Chairman Larry Keift. “Reimplementing the PSCA is a necessary mechanism to adjust our retail charges to recover wholesale increases, and decreases, to our costs in the power supply market.”

Additionally, the Board approved the utility’s FY 2023-2027 Five-Year Capital Plan. The 5-year financial plan allocates $18.44 million toward local electric distribution system projects over the period and $15.64 million toward the utility’s costs of necessary additional Sims site environmental remediation and mitigation (the utility’s remaining “asset retirement” estimated liability). This $15.64 million is above the $7.5 million already spent by the BLP and the remaining $610,000 set aside in FY 22 to demolish the Sims plant and remediate the site ($23.75 million allocated in total). City Council and City administration officials present at the meeting desired the Board to allocate more funds in the plan to remediate environmental contamination from non-utility sources, primarily the City dump operated on Harbor Island prior to the construction of the Sims Plant. No electric utility funds were allocated by the Board for this purpose in the BLP’s five-year plan at this meeting.


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