2014 Grand Valley Annual Report

78
YEARS
GRAND VALLEY RURAL POWER LINES, INC.
A N N U A L R E P O R T

JOHN GORMLEY
VICE PRESIDENT
GRAND JUNCTION
ROD MARTINEZ
SEC/TREAS
GRAND JUNCTION
DENNIS HABERKORN
DIRECTOR
APPLETON
DON McCLASKEY
DIRECTOR
LOMA
President’s Board President’s Report Report
BY TOM BENTON | GRAND JUNCTION
September 17 marks an important anniversary for Grand
Valley Power. On that date in 1937 electric lights came on
for the first time in 400 rural Mesa County homes.Ever
since, GVP has provided reliable, safe, cost-effective power
to its members. This past year GVP added 112 new electric
services, 37 more than were added in 2012, bringing our total
number to 18,105. The cooperative added eight miles of
new lines of which five miles were installed underground. The
current run rate for building permits in the county indicates
another 100 plus homes will come on line in 2014. These
new customers and our existing customers could not receive
reliable power without the well-trained, enthusiastic and
knowledgeable employees of Grand Valley Power.
It has been an honor and a privilege for me to serve
as the Grand Valley Power Board Chairman this last year.
The cooperative has had many accomplishments and
achievements over the last seventy-eight years. For most of
us this is usually noted in a capital credit check coming in
the mail in December of each year. Many of our members
noticed a bit of an increase in their capital credit checks last
year due in part to the earnings of the cooperative. Larger
checks are also a result of a change in the retirement formula
which now returns patronage earned in more recent years.
(previously capital credits were based solely upon a 15
year rotation). In addition to more members sharing in the
earnings of the cooperative, you may have noticed a much
more user-friendly website, with menus that provide you, as
a member, the ability to see outages, inquire about leasing
solar panels and manage your account when — where and
how you desire. Leasing of a solar panel is a good way to
hedge against rising costs of wholesale power generation.
Over the last several decades Grand Valley Power has
also expanded into a strong supporter of the community; that
is, while being responsible to its membership the cooperative
supports the advancement and education of our youth. Grand
Valley Power awards several scholarships: The Jack Broughton
/ CMU Scholarship ($1,000 for four years to a Mechanical
Engineering student at Colorado Mesa University), six $1,000
scholarships for higher education, and a $2,000 scholarship
to Western Colorado Community College’s electric lineworker
program. All of these are funded through unclaimed capital
credits. In addition to scholarships, Grand Valley Power
supports local youth programs and sponsors youth to
leadership conferences, including the Washington, D.C.
Youth Tour and Colorado Youth Leadership Camp.
Governance of Grand Valley Power includes an
informed and active Board who in concert with Tom Walch,
our General Manager, focus on the primary mission of the
cooperative. Over the last year your board has worked
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 cooperative landscape is
dotted with rural electric associations that have drifted into
other unprofitable and often times short-lived business
ventures. GVP has maintained its focus on electrical
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 help GVP meet the
renewable energy standards established by law. Our board
continues to look at alternative power generation that is in
the best interests of our members both economically and
environmentally. Economics and productivity are part of our
strategic planning process, and over the last few years the
board has taken action to pursue these objectives.
The board commissioned Mountain State Employers
Council (MSEC) to review salary and benefits in an effort
to ensure that Grand Valley Power provides an equitable
and rewarding workplace environment, coupled with our
membership receiving value for their interests. The results
of the study were well done and provide both management
and the board with areas of opportunity to meet the needs
of our membership and employees in the years ahead.
Another part of our financial strategy evolved from the
growth phase the valley experienced from the mid 1990s
through 2008. Like many business operations, strong equity
is an important indicator of a company’s financial stability.
Certain benefits accrue to cooperatives with a strong equity
position, including more favorable borrowing terms. The
growth of the Grand Valley during boom years required
more investment in distribution lines and equipment than
was sustainable through normal earnings. As a result, our
equity position declined to 30% of total assets. The board
instituted a goal to improve that position to 40% by 2020
while maintaining distribution of capital credits. I am pleased
to report that this objective is ahead of schedule.
The budget process often times includes a look
at our rate structure. At the end of last year the board
commissioned an updated rate study for 2014 to review our
current rate structure and ensure that the methodology used
by our current system is adequately addressing the fixed and
variable costs associated with members’ billing rates. The
board anticipates a report from the consulting firm in mid
to late summer and will review these findings to determine
if the cost structure should be restructured. Based on
information currently available, any rate restructuring would
likely be revenue neutral for the cooperative.
As a member of our cooperative you have the ability to
share your opinion on a variety of issues, including election
of directors, environmental concerns and at times, where to
plant a tree so that it does not interfere with your power
supply ten years later. Providing safe, cost-effective, reliable
power will always be challenging. GVP’s history and current
employee team — our past and our present — point to a
bright future for our cooperative. You can be confident that
we remain committed to the cooperative’s ongoing success.
Thank you for being part of Grand Valley Power.

This annual report is my opportunity to provide Grand
Valley Power members with my view of the “state of
the cooperative.” It is a good time for us to examine
the organization’s performance with respect to its mission:
providing reliable, affordable electric energy to Grand Valley
homes and businesses in a safe, environmentally responsible
manner. For almost eight decades, Grand Valley Power has
delivered on this mission. Our challenge is to build on this
success for decades to come.
A sound financial foundation is essential to achieving
our mission. After several dormant years, the Mesa County
economy is showing signs of life. This revival is contributing
to more construction activity for our crews and higher
energy sales. 2013’s temperature extremes boosted energy
consumption to all-time highs for our cooperative, producing
margins in excess of $3 million and improving our equity
position to 32 percent. For a business operating under the
cooperative model, a strong financial performance includes
the allocation and retirement of patronage capital to the
membership. As board president Tom Benton notes in his
report, this is an obligation we take very seriously. In 2013
Grand Valley Power issued checks for more than $1.2 million
in capital credit payments to its members past and present.
Knowing how important energy affordability is to GVP
members, we look for every opportunity to maximize value
and control costs. Our successes include:
n The effective use of technology, including
web-based and SmartHub applications, to streamline
internal and external communications, and data and
payment processing.
n Labor contracts negotiated in 2013 that reduce
long-term benefit costs at our cooperative and include
incentives to reward employees when safety and cost
containment goals are attained.
n The recent sale of the old GVP headquarters
facility at 2727 Grand Avenue.
n Conclusion of a two-year old rate case with Xcel, our
wholesale energy provider. The case was filed with the
Federal Energy Regulatory Commission (FERC) seeking
adjustments to our formula rates that would reduce our
power costs. Our efforts were rewarded with a recent
settlement that will achieve this objective. While the
impact may not be dramatic, we know that for many of
our consumers, every little bit helps.
Our wholesale power contract with Xcel ensures that
our homes and businesses will have the generation and
transmission resources necessary to avoid brownouts and
other power interruption incidents affecting other parts
of the country. Our relationship with Xcel also provides
renewable energy resources that are environmentally
responsible and economically competitive. In 2013 almost
25 percent of our energy was acquired from renewable
resources. These resources include solar panels situated
on consumer rooftops and in GVP’s Solar Farm. We strive
An General Enduring Manager’s Success Report Story
BY TOM WALCH
to accommodate consumer-distributed generation efforts
with attractive net-metering terms and a streamlined
interconnection process. Recognizing our contribution to
the environment, the Colorado Solar Energy Industries
Association (COSEIA) named Grand Valley Power as its Rural
Electric Association “Partner of the Year.”
Xcel’s generation and transmission are significant parts
of GVP’s reliability equation, but the “last mile” provided
by GVP’s distribution system is a critical component as
well. Sound planning and engineering, detail-oriented
construction practices, and an aggressive tree trimming
program all contribute to our cooperative’s robust
distribution system. But even a robust system is subject to
the forces that Mother Nature brings to bear. Our reliability
numbers were adversely impacted by heavy wet snow in
late November that caused the largest outage on our
system in years. This outage could have been magnitudes
worse if our tree-trimming program was not it place. In
circumstances like these, we rely on our linemen, working in
the harshest conditions for hours on end, to restore power
to our members.
Our linemen are the backbone of our organization.
Engaged in one of the most hazardous occupations around,
our linemen have embraced a role as leaders when it comes
to safety. Careful training, effective communication and
attention to detail are part of the daily routine. With this
approach our organization earned high marks during a recent
unannounced RESAP safety assessment. Our personnel take
pride in spreading the safety message, working with area
youth at the Mesa County and Plateau Valley safety fairs.
These efforts make our workplace and our community safer.
Grand Valley Power is a “for service” cooperative —
not a “for-profit” business. Everything we do is geared to
providing our members cost-based electric service. While
many organizations with a track record like GVP’s would
be content with their success, our employees know that
constant improvement is required. Last year Grand Valley
Power participated in a nationwide survey to measure our
customer service performance. Using the American Customer
Satisfaction Index (ACSI), GVP earned a score of 79, three
points higher than the national utility industry average. This
score is good, but it is not good enough. There is always
room for improvement, and with the benchmark established,
the target is in our sights.
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 to take on the challenges ahead: an engaged
membership, strong leadership, and a committed workforce
dedicated to the meeting the needs of our members and
consumers.
BOB SAUNDERS
DIRECTOR
MACK
SYLVIA SPANGLER
DIRECTOR
COLLBRAN
S. JAMES O’CONNOR
DIRECTOR
FRUITA
BILL ROOKS
DIRECTOR
ORCHARD MESA

Statement of Operations & Patronage Capital
FOR THE YEARS ENDED DECEMBER 31, 2013 & 2012
2013 2012
TOTAL OPERATING REVENUE
Electric energy revenue $31,194,465 $29,666,978
Miscellaneous electric revenue 250,843 222,967
Total Operating Revnue $31,445,308 $29,889,945
OPERATING EXPENSES
Cost of Power Purchased 17,285,859 16,731,716
Operating Expenses - Transmission 18,011 77,989
Operating Expenses - Distribution 1,955,126 2,226,533
Maintenance of Distribution Plant 697,734 867,629
Accounting and Collection Expenses 1,194,011 1,181,719
Other Customer Expenses 385,899 398,361
Administrative and General 2,182,133 2,287,932
Depreciation 2,288,518 2,250,713
Taxes 623,736 557,790
Total Operating Revenue Deduction $26,631,027 $26,580,382
Electric Operating Margin 4,814,281 3,309,563
Less: Interest on Long-term Debt 1,915,746 1,958,918
Operating Margin Before Capital Credits 2,898,535 1,350,645
Cooperative Capital credits 55,883 72,683
Operating Margin $2,954,418 $1,423,328
Interest Income 42,915 27,393
Other Income (Expenses) 9,994 12,309
Nonoperating Margins 52,909 39,702
NET MARGINS $3,007,327 $1,463,030
PATRONAGE CAPITAL at Beginning of Year 21,781,619 21,510,140
Subtotal 24,788,946 22,973,170
Less Retirement of Capital Credit (1,192,889) (1,091,244)
Gain on Retirement of Capital Credits (44,558) (100,307)
PATRONAGE CAPITAL at End of Year $23,551,499 $21,781,619
Source of Revenue Dollars
Expenses
Residential
68%
Power Cost
54.8%
Commercial & Industrial 31%
Irrigation & Other 1%
T&D Maintenance 8.5%
Admin & General 11.9%
Depreciation 7.3%
Taxes 2.0%
Interest 6.1%
Margins 9.5%

Assets
Balance Sheet
GRAND VALLEY RURUAL POWER LINES, INC. | GRAND JUNCTION | CO | DECEMBER 31, 2013 & 2012
2013 2012
UTILITY PLANT
Electric plant 83,453,704 81,627,944
Depreciation 19,052,518 17,047,426
Depreciated Value 64,401,186 64,580,518
INVESTMENTS 1,324,631 1,323,807
CURRENT ASSETS
Cash and cash equivalents 2,321,677 2,483,545
Receivables (less provisions for uncollectable
accounts of $34,965 in current period
& $35,000 in prior period) 4,649,498 4,210,716
Materials 1,884,664 1,576,704
Accrued interest receivable 82,627 44,740
Total 8,938,466 8,315,705
DEFERRED DEBITS 1,957,953 483,261
TOTAL ASSETS 76,622,236 74,703,291
Equities and Liabilities
2013 2012
CAPITAL EQUITIES
Memberships 117,790
Patronage capital 23,551,499 21,781,619
Other equities 1,180,574 1,135,509
Accumulated Comprehensive (loss) (304,900) (415,000)
Total 24,427,173 22,619,918
LONG-TERM LIABILITIES 42,937,084 43,744,579
OTHER LONG TERM OBLIGATIONS 943,800 1,056,700
CURRENT LIABILITES
Current maturities of long-term debt 1,608,185 1,064,800
Accounts payable 2,117,546 1,923,110
Accrued expenses 1,574,701 1,520,191
Accrued taxes 722,018 623,858
Customer deposits 217,650 219,811
Total 6,240,100 5,351,770
DEFERRED CREDITS 2,074,079 1,930,324
TOTAL LIABILITIES & CAPITAL 76,622,236 74,703,291
Average Rate per Kwh
Customers per Mile of Line
KWH Cost
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
Year
Customers/Mile
13
12
11
10
9
8
7
6
5
4
3
2
1
0
66
71 76 81 86 91 96 01 05 10 13
Year

Our Youth
GRAND VALLEY POWER SCHOLARSHIP RECIPIENTS
Megan Bricker
Central High School
Attending
University of Denver
Landyn Croy
Plateau Valley High School
Attending
Northwestern Junior College
Daniel Kachin
Plateau Valley High School
Attending
Northern Arizona University
Jenna Lucas
Palisade High School
Attending
Colorado School of Mines
Erika Meister
Grand Junction High School
Attending
Colorado School of Mines
McKayla Vidmar
Fruita Monument High School
Attending
Colorado State University
Antonio Gueretta
Jack Broughton/CMU Scholarship
Fruita Monument High School
Attending Colorado Mesa University
Lindsey Sparks
2014 Washington DC Youth Tour
Grand Junction High School

Your Employees
Operations
Mike Birch (Manager), Mark Shaffer, Brent Boyce,
Trevor Lettman, Clint Blaylock, Nick Reimer,
Seth Casorla, LeRoy Lowary, Scott Bradley, Bill Barlow
(Supervisor), Zane Zibinski, Cindy Roling,
Don Burbridge, and Robbie Barela
not pictured: Preston Dillingham
Engineering
Matt Williams (Staff Engineer) ,
Karen Bain, Steve Don (Manager), Tony Ippolito,
Tom Holman, Tonya Archuleta,
Perry Rupp, Darrell Gilbert,
and Mike Gardner
Office Services and Billing
(standing) Pat Kanda (Staff Accountant),
Debbie DeRose, Debbie Whiteside, Laurie Miles;
(sitting) Sarah Wheeler, Cathy Gledhill (Manager),
Nita Mancuso, Crystal Adams
Information Technology
Karen Allen
(Network Administrator),
Sherry Fix (Manager),
and Matt Kellerby
Purchasing, Materials & Compliance
Jack Malone, SueEllen Manley (Manager),
and Daniel Reid
Consumer & Public Relations
Bill Byers (Manager) and
Derek Elder (Energy Services Administrator)
Service Awards
Mike Birch - 35 years Bill Barlow - 25 years Bill Byers - 25 years Debbie DeRose - 25 years
Debbie Whiteside - 25 years LeRoy Lowary - 20 years Mark Shaffer - 20 years Director Bill Rooks - 10 years

Annual Meeting
ELECTION OF DIRECTORS
1. NOMINATIONS. A nomination for director on the Board of Directors
may be made by written petition signed by at least 15 members of the
cooperative, and filed with the Board of Directors of such association
no later than forty-five days prior to the date of the election.
2. QUALIFICATIONS. Any individual who is a member shall be eligible
to become and remain a director. Any member which is not an
individual may designate in writing an individual partner, shareholder,
officer, board member, or employee who will then be eligible to be
appointed or elected a director just as an individual member. be
appointed or elected a director just as an individual member
3. ELECTION OF DIRECTORS. The persons named as directors in the
Articles of Incorporation shall compose the Board of Directors until
the first annual meeting or until their successors shall have been
elected and shall have qualified. Each member of the Cooperative
shall be entitled to vote in the election of directors on the Board of
Directors either at a meeting held for such purpose or by mail, but not
both. A member who has voted by mail shall not be entitled to vote
at the meeting. Mail voting shall be in writing on ballots provided
by the Cooperative. The mail ballot shall be voted by the member,
placed in a special envelope provided for the purpose so as to
conceal the marking on the ballot, deposited in a return envelope
which must be signed by the voting member, and mailed back to the
Cooperative. Envelopes containing mail ballots shall remain sealed
and uncounted until the meeting held for the purpose of electing
the Board of Directors. Directors shall be elected by a plurality vote
of the members. Notwithstanding the foregoing, if the number of
people nominated for directors is less than or equal to the number of
vacancies, the Board of Directors may determine to eliminate the mail
vote for that election and have the directors elected by the members
present at the meeting of the members.
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 Grand Valley Power, 845 22 Road, Grand Junction, County
of Mesa, Colorado on Friday, August 15, 2014 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 22nd day of
January, A.D., 2014.
PRSRT STD
US POSTAGE
PAID
GRAND JCT, CO
PERMIT 1
PO Box 190
AUGUST 15, 2014
Grand Junction, CO 81502-0190
Phone 970.242.0040
Program & Agenda
5:00 – 6:00 p.m. Registration
5:00 – 6:00 p.m. Dinner
6:00 – 6:30 p.m. Program
6:30 – 7:00 p.m. Business Meeting
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.