2015 Grand Valley Power Annual Report

79
YEARS
GRAND VALLEY RURAL POWER LINES, INC.
A N N U A L R E P O R T

President’s Board President’s Report Report
BY TOM BENTON | GRAND JUNCTION
In mid-June of this year
I had the opportunity
to travel much of the
lower half of Colorado
in a manner that
allowed me to absorb the true value of the
Rural Electrification Act of 1936. I was one of
2000+ cyclists that participated in a charitable
event known to many as “Ride the Rockies.”
This week-long event took riders through the
electrical service territories of Grand Valley
Power, Delta Montrose Electric Association,
Gunnison County Electric Association, Sangre
De Cristo Electric Association, San Luis Valley
Rural Electric Cooperative, Intermountain REA,
and San Isabel Electric Association. Each of these
Cooperatives was chartered after the REA Act of
1936, which was a Congressional endorsement
of President Roosevelt’s Executive Order 7037 in
1935. The Congressional Act was sponsored by
US Representative John Rankin from Mississippi,
and Senator George Norris from Nebraska. In
order to accomplish the monumental task of
rural electrification, rural electric cooperatives
were able to borrow significant sums of money
from the Rural Electrification Administration,
or the REA, a US Government Agency. At that
time municipal electricity ran on a 2300 volt
distribution system. This voltage would carry
about 4 miles before a voltage drop would
cause brown outs. This was unacceptable and
unworkable. Rural distribution lines needed
higher voltage to carry up to 40 miles. Most
cooperatives ultimately settled on a distribution
system that ran on 6900 volts.
Much of rural America had been
accustomed to using generators. I remember
the “light plants” we had on our ranch in Burns
Colorado until the power poles reached remote
communities. Early homes had 60 amp service
with a 230 volt fuse panel. As we know, this has
changed significantly since 1936. Fortunately,
for many of our families the vision of these
individuals in Congress brought much of rural
America up to the comforts and standards of
their urban relatives. Perhaps much of this was
lost on most of the cyclists, but I could clearly
see along the mountain sides of Colorado the
investment in our electrical infrastructure – in
both labor and materials – that began eighty
years ago. Much of the infrastructure has been
upgraded, but the right-of-ways, and some
poles and lines remain as they have for over
three quarters of a century.
A big change in the mix of users in rural
areas is also evident. What started as farming
homesteads has morphed into second
homes, large estates, cottage industries, and
in some locations, large commercial power
users associated with agricultural, mining, and
recreation interests.
Grand Valley Power has evolved with
the change in economic interests within its
footprint and is a mirror image of the economic
changes in Mesa County. GVP now serves 18343
customers. In 2014 264 new services were
added, as compared to 119 the year before.
New services require additional infrastructure;
GVP added two miles of new transmission line
and 11 miles of underground distribution line.
With a flat economy the Board recognized some
opportunities to offset fixed cost increases with
cost saving measures. This included a refinance of
approximately $20 million in long term debt held
by the Rural Utility Service which will result in net
interest savings of approximately $4 million over
the life of the remaining 22 year loan. Financing
options are more diverse now than eighty years
ago, with both Cooperative Finance Corporation
(CFC - a lending institution created and owned
by rural electric cooperatives) and Co-Bank
presenting competitive offers. CFC’s proposal
included some additional rate incentives as the
financial performance of GVP improves. The
Board has set a goal to reach 40% net equity
in 2020 which will provide additional savings for
future borrowings from CFC. Through the efforts
of our staff and leadership, GVP has improved
this position from 30% equity in 2011 to 35%
in 2015. All other financial ratios are above our
lender’s requirements and in the median range
for rural electrical cooperatives.
Other significant events during the year
included a board commissioned independent
third party rate study in 2014. The results of this
study were implemented in January of 2015
after careful consideration and modifications.
The methodology behind the rate study was
focused on addressing proper recovery for fixed
and variable costs associated with Cooperative’s
ability to provide power to each member in
an equitable fashion. The result was a modest
increase in the monthly access charge and a
decrease in the monthly consumer kilowatt
charge. Although users with low consumption
levels saw a small increase, the overall result
had no impact for a consumer using an average
of 832 kwh a month. Historically, rural electric
cooperatives review their rate structure on a five
to seven year basis to insure the organization
has the financial capacity to meet its member’s
electrical needs.
Grand Valley Power continued its history
of supporting the community, and representing
rural electric cooperative interests on a state
and national basis. Grand Valley Power offered
several scholarships: The Jack Broughton —
Colorado Mesa University Scholarship ($1,000
per year for four years to a student at CMU),
six $1,000 scholarships for higher education,
and a $2,000 scholarship to Western Colorado
Community College’s electric line worker
program. All of these are funded through
unclaimed capital credits. In addition to
scholarships, Grand Valley Power supports local
youth development programs and sponsors
youth to leadership conferences, including the
Washington, D.C. Youth Tour and Colorado
Youth Leadership Camp.
Over the last year your board has
continued its efforts on strategic planning
initiatives in the areas of financial planning,
human resources, governance, wholesale power
and governmental affairs. The framework of
these strategy statements are designed to
support the mission of Grand Valley Power:
providing safe, cost effective and reliable
power to its membership. The results of these
efforts were seen in the organization’s memberfocused
customer service, safe operations,
sound engineering practices, and financially
successful operations. These efforts also enable
the organization to aggressively retire capital
credits to its members. GVP has maintained
its focus on electric distribution, relying on our
full-requirements contract with Xcel Energy to
provide our generation and transmission needs.
Xcel’s network does include power generated
from wind and solar sources which satisfies
renewable energy standards established by law.
It has been an honor and a privilege for me to
serve as the Grand Valley Power Board President
for the last two years. As I finish my term I would
also like to thank the employees of Grand Valley
Power for their dedication to the members of
the Cooperative. GVP has had to adapt to many
changes since the Rural Electrification Act of
1936 and the organization would not be in the
condition it is today without its leadership and
team members.
As a member of this cooperative you
have the ability to share your opinion on a
variety of issues, including election of directors,
environmental concerns and other insights that
are deemed applicable to our cooperative. On
behalf of the Board of Directors I wish to thank you
for being a member of this electrical cooperative
and part of the history of rural electrification.

A
BY TOM WALCH
A
rural electric
cooperative’s
a n n u a l
report doesn’t
differ much from
the report cards that are such an integral part
of growing up in America. My memories as a
young boy in small town Texas call to mind
a little nervousness around report card time.
Whether it was because I didn’t always live up
to my potential, or simply could not get along
well enough with the sisters at St. Mary’s
School, good report cards were few and far
between. But every once in a blue moon,
I would manage to bring home that elusive
prize: a straight “A” report card! I remember
how my chest would swell with pride when
that happened!
Grand Valley Power’s 2014 report card
produces a similar feeling. Results for this
term include:
n Continued improvement of the
cooperative’s solid financial foundation.
Margins topped $3.25 million, a new highwater
mark for Grand Valley Power. Equity
also continues its upward trend, finishing
the year above 35 percent – the highest
equity level achieved in the past five years.
n System reliability also notched record
marks. In 2014 Grand Valley Power
reported an excellent Service Availability
Interruption Duration Index (SAIDI) of
54.220 minutes, among the best it has ever
recorded. The average for North American
Utilities is about 90 minutes. This means
that Grand Valley Power consumer outage
minutes were about 40 percent lower than
those experienced by the average utility.
n Grand Valley Power’s 2014 safety record
was exemplary. No lost time accidents
were reported, and an unannounced
safety assessment yielded high marks
from inspectors. This inspection reflected
dramatic improvement since the last
inspection three years ago.
n Environmental stewardship is an important
part of our mission. Grand Valley Power
continues to be among the state’s
cooperative leaders in incorporating
clean, renewable energy in its power
mix. In 2014 almost 26 percent of the
electricity provided to Grand Valley Power
General Manager’s Report
consumers was generated from renewable
resources. The average for all of the other
cooperatives in the state is well below
ten percent. According to filings with the
Colorado Public Utilities Commission,
Grand Valley Power has the highest
percentage of renewables in the state
among cooperatives.
n Customer service remains a priority. In
2014 follow-up surveys were directed
to consumers dealing with Grand Valley
Power service planners, servicemen and
construction crews. Consumers were asked
to rate the level of service on a scale of 1
to 5, with a 5 rating indicating excellent
service. Over 90 percent of respondents
gave Grand Valley Power service the
highest rating possible. None of the
respondents rated the cooperative any
lower than 4 on this 5-pooint scale.
n Grand Valley Power members can expect
more than good service – they participate
in the organization’s financial success. This
is accomplished with the allocation and
retirement of patronage capital or capital
credits. In 2014 over $1.5 million dollars in
patronage capital was returned to Grand
Valley Power members. Once again, this
is the highest retirement amount in the
cooperative’s history.
Most would agree that this is a pretty
impressive report card. But there is one
additional factor that makes these results
even more remarkable: they were obtained
without an increase in distribution rates,
and with Grand Valley Power’s retail rates
consistently at or below the midpoint for
Colorado cooperatives
Before I get too far along, I should point
out a key distinction between a student’s
report card, and the results I have described in
in this report. The marks that I brought home
from St. Mary’s School were a reflection of
individual effort (or lack thereof). Grand Valley
Power’s achievements, on the other hand, are
the product of teamwork. The cooperative’s
board of directors sets the stage, working with
management to develop long- range plans
for the cooperative, and actively providing
direction and guidance. The management
staff ensures that these plans are effectively
executed. A dedicated, service-oriented
workforce is there where the rubber hits the
road, taking care of our consumers’ needs.
I feel proud and privileged to be part of
this team.
There is undoubtedly a lot of luck
involved when an organization produces
the kinds of results that Grand Valley Power
did in 2014. Our reliability numbers were
boosted by mild weather and a lack of
severe storms. Slow but steady economic
growth on the western slope aided our
financial performance. Nevertheless, I remain
convinced that the team approach embraced
at Grand Valley Power is the primary reason
for our success. There are scores of examples.
Look at system reliability. The aggressive
tree-trimming program approved by the
board contributes; so does the efficient and
effective use of technology by engineering
staff members in identifying and isolating
system weaknesses. The old-fashioned
pride and dedication of lineman responding
to power outages as quickly as possible
adds one more ingredient to our recipe for
reliability. There are similar examples of this
kind of synchronicity and teamwork leading to
positive results in areas of finance, safety and
customer service. And it continues to come
together. A better safety record translates
to lower costs, providing an assist for our
financial marks. When margins and equity
are adequate, we are able to invest in our
distribution system and improve reliability.
These margins and system investments are
eventually returned to our members in the
form of patronage capital.
Unfortunately, past results don’t
guarantee future success. The results
posted in 2014 will be difficult to repeat.
But I can repeat the same conclusion that
I made in my report last year: everyone
engaged in the energy business faces an
uncertain future. Economic, environmental
and regulatory challenges loom ahead.
Fundamental changes to our industry are in
process. The affordability and reliability of
electric energy is no longer a sure thing. But
with all the uncertainty, I remain convinced
that Grand Valley Power has the right team
in place to take on the challenges ahead: an
engaged membership, strong leadership,
and a committed workforce dedicated to
meeting the needs of our members and
consumers.

Statement of Operations & Patronage Capital
FOR THE YEARS ENDED DECEMBER 31, 2014 & 2013
2014 2013
TOTAL OPERATING REVENUE
Electric Energy Revenue $30,446,671 $31,194,465
Other Operating Revenue 248,183 250,843
Total Operating Revenue $30,694,854 $31,445,308
OPERATING EXPENSES
Cost of Power Purchased 16,683,287 17,285,859
Operating Expenses - Transmission 57,762 18,012
Operating Expenses - Distribution 2,024,132 1,955,132
Maintenance of Distribution Plant 712,562 697,736
Accounting and Collection Expenses 1,161,997 1,194,010
Other Customer Expenses 412,704 385,898
Administrative and General 2,126,424 2,060,095
Depreciation 2,289,074 2,288,518
Taxes 759,187 623,736
Interest on Long Term Debt 1,869,817 1,915,746
Interest Expense - Other 717 704
Other Deductions 225,321 121,959
Total Operating Revenue Deduction $28,322,984 $28,547,405
Electric Operating Margin 2,371,870 2,897,903
Nonoperating Margin
Interest Income 37,606 42,915
Other Non-Operating Income 664,155 10,626
Total Non-Operating Margin 701,761 53,541
Cooperative Capital credits 146,809 55,883
NET MARGINS FOR PERIOD $3,220,440 $3,007,327
PATRONAGE CAPITAL at Beginning of Year 23,551,500 21,781,621
Subtotal 26,771,940 24,788,948
Less Retirement of Capital Credit (1,520,075) (1,237,448)
PATRONAGE CAPITAL at End of Year $25,251,865 $23,551,500
Source of Revenue Dollars
Expenses
Residential 67% Power Cost 54.4%
Commercial & Industrial 32%
Admin & General 12.1%
Irrigation & Other 1%
Operating & Maintenance 9.1%
Operating Margins 7.7%
Depreciation 7.5%
Interest 6.8%
Taxes 2.5%

Assets
Balance Sheet
GRAND VALLEY RURUAL POWER LINES, INC. | GRAND JUNCTION | CO | DECEMBER 31, 2014 & 2013
2014 2013
UTILITY PLANT
Electric plant 83,812,656 82,114,675
Construction Work in Progress 1,099,838 1,339,032
84,912,494 83,453,707
Less: Accumulated Depreciation (20,145,578) (19,052,518)
Total Utility Plant 64,766,916 64,401,189
INVESTMENTS 1,345,301 1,324,631
CURRENT ASSETS
Cash and cash equivalents 1,723,611 1,601,677
Temporary Cash Investments 397,000 720,000
Receivables (less provisions for uncollectable accounts
of $71,000 in current period & $65,000 in prior period) 4,330,824 4,613,595
Materials 1,838,452 1,933,840
Other Current Assets 64,641 69,350
Total Current Assets 8,354,528 8,938,462
DEFERRED Charges 1,773,464 1,957,954
TOTAL ASSETS 76,240,209 76,622,236
Equities and Liabilities
2014 2013
CAPITAL EQUITIES
Patronage capital 25,251,865 23,551,500
Other equities 1,271,717 1,180,574
Accumulated Comprehensive (loss) (36,700) (304,900)
Total 26,486,882 24,427,174
LONG-TERM LIABILITIES
Mortgage Notes 42,482,128 44,545,269
Less: Current Maturities (1,385,000) (1,608,185)
Total Long-Term Debt 41,097,128 42,937,084
OTHER LONG TERM OBLIGATIONS 654,629 943,800
CURRENT LIABILITES
Current Maturities of Long-Term Debt 1,385,000 1,608,185
Accounts Payable 1,973,330 2,117,546
Accrued Interest Payable 95,277 99,678
Accrued taxes 822,136 722,018
Other Current Liabilities 1,844,307 1,692,672
Total Current Liabilities 6,120,050 6,240,099
DEFERRED CREDITS 1,881,520 2,074,079
TOTAL LIABILITIES & CAPITAL 76,240,209 76,622,236
Average Rate per Kwh
Customers per Mile of Line
KWH Cost
0.14
0.13
0.12
0.11
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0
01
03 05 07 09 11 13 14
Year
Customers/Mile
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
66
71 76 81 86 91 96 01 05 10 14
Year

Our Youth
GRAND VALLEY POWER SCHOLARSHIP RECIPIENTS
Samuel Graf
Fruita Monument High School
Mariah Klingler
Plateau Valley High School
Ryland Mahre
Grand Junction High School
Sara Green
Central High School
Attending
Middlebury College
Attending
Colorado State University
Attending
University of Utah
Jack Broughton/
CMU Scholarship
Blaine McCormick
Fruita Monument High School
Attending
Arizona State University
Monty Metzler
Palisade High School
Attending
Colorado School of Mines
Noah Turner
Fruita Monument High School
Attending
Oklahoma Christian University
Service Awards
EMPLOYEES
DIRECTORS
Zane Zibinski
35 years
Nita Mancuso
25 years
Don Burbridge
20 years
Tonya Archuleta
15 years
Matt Williams
10 years
Robbie Barela
10 years
Jim O’Connor
30 years
Bob Saunders
25 years
Rod Martinez
15 years
Tom Benton
5 years

Board of Directors
TOM BENTON
PRESIDENT
GRAND JUNCTION
JOHN GORMLEY
VICE PRESIDENT
GRAND JUNCTION
ROD MARTINEZ
SECRETARY/TREASURER
GRAND JUNCTION
DENNIS HABERKORN
DIRECTOR
APPLETON
DON McCLASKEY
DIRECTOR
LOMA
BOB SAUNDERS
DIRECTOR
MACK
SYLVIA SPANGLER
DIRECTOR
COLLBRAN
S. JAMES O’CONNOR
DIRECTOR
FRUITA
BILL ROOKS
DIRECTOR
ORCHARD MESA
ELECTION OF DIRECTORS
This year there are four candidates running to fill three director positions. The candidates certified by the board of
directors are Jim O’Connor, Bill Rooks, Christi Flynn, and Dennis Haberkorn.
All Grand Valley Power members were mailed a ballot packet including voting instructions, a brief biographical
sketch of each candidate, a ballot, a secrecy envelope for the ballot, and a postage paid return envelope.
Members may vote by either mail or at the annual meeting, but not both. Mail ballots must be received by
August 14 in order to be counted.
The election process is being overseen by an independent Election Supervisory Committee appointed by the
board of directors.
All Grand Valley Power members are encouraged to vote and participate in this democratic process.

Your Annual Meeting
The 79th Annual Meeting of Grand Valley Power will be
held on Friday, August 14, 2014 beginning at 5:30 p.m.
in the Ball Room of the University Center at Colorado
Mesa University.
Because the meeting venue has changed, the map
shows the parking garage next to the University Center.
Access to the garage is off 12th Street between Elm and
Kennedy Avenues. Easiest access is to travel south on
12th Street to the garage entrance.
FFA students will be on hand to help direct attendees
to the elevator and correct floors.
PO Box 190
Grand Junction, CO 81502-0190
Phone 970.242.0040
PRSRT STD
US POSTAGE
PAID
GRAND JCT, CO
PERMIT 1
Program & Agenda
FRIDAY, AUGUST 14, 2015
5:30 – 6:30 p.m. Registration
5:30 – 6:30 p.m. Dinner
6:30 – 7:30 p.m. Business Meeting
NOTICE OF ANNUAL MEETING
By order of the Board of Directors, notice is hereby
given that the annual meeting of the stockholders
of Grand Valley Rural Power Lines, Inc. will be held
at Colorado Mesa University in the University Center
Ballroom, Grand Junction, County of Mesa, Colorado
on Friday, August 14, 2015 at 6:30 P.M., for the purpose
of electing a Board of Directors as provided by the
By-Laws and the transaction of all business which
may be properly brought before an Annual Meeting.
Dated at Grand Junction, Colorado, this 17th day of
September, A.D., 2014.
1. Report on the number of shareholders present in person
to determine the existence of a quorum.
2. Reading of notice of the meeting and proof of due publication
or mailing thereof.
3. Reading of unapproved minutes of previous meetings of
the members and the taking of necessary action thereon
4. Presentation and consideration of reports of officers,
directors and committees.
5. Election of directors.
6. Unfinished business.
7. New business.
8. Adjournment of formal business meeting.
9. Drawing for door prizes.