2016 Grand Valley Power Annual Report

80
YEARS
GRAND VALLEY RURAL POWER LINES, INC.
ANNUAL REPORT
1936-2016

PRESIDENT’S REPORT
BY JOHN
GORMLEY
At our annual meeting this year, Grand Valley Power
(GVP) will begin its 80th year of providing electrical power to
its members. While the pace of change seems to increase
each year, Grand Valley Power continues striving to meet its
mission of providing reliable, safe, cost-effective power to
its members. It has been an honor and privilege for me to
serve as GVP Board President this past year. Your Board
of Directors and the staff of GVP have been working hard to
make sure GVP continues to provide our members with the
hometown service they have come to appreciate.
In addition to GVP’s most critical job of providing reliable
power to our members, GVP has had numerous other
accomplishments during the past year. Most importantly, the
Board of Directors and staff updated the strategic plan for
GVP with the help of Kevin Sump, a former co-op general
manager and frequent instructor of National Rural Electric
Cooperative Association Director education courses.
GVP’s highest priority strategic planning initiative is to
work on the development of a technology plan to address
the future needs of the co-op in the areas of AMI (Advanced
Metering Infrastructure), SCADA (Remote monitoring and
switching technology), radio communications, battery
storage, cyber security and other issues arising as technology
advances. This strategic initiative will help us improve service
and efficiency in the years ahead.
The Board of Directors, co-op staff and employees are
also working on updating the co-op’s mission statement. The
Board discussed term limits for directors and reviewed other
director policies. Term limits for directors were implemented
by the Board at our June meeting.
The strategic planning session also identified the need to
complete an evaluation of our distribution system limitations
and continue to identify potential physical threats and system
vulnerability.
In the financial arena, the strategic planning effort
acknowledged that Grand Valley Power has taken significant
steps to improve its financial performance in areas of longterm
debt restructuring, capital credit retirements, equity
management and retail rates. We acknowledged that
external issues and factors will continue to put pressure
on the company’s ability to maintain our strong financial
position. The current Board and management will continue
to explore opportunities to improve operating efficiencies
and shared service arrangements with other cooperatives
and organizations. GVP will also review retail rate structures
to assure the price our members pay for power is fair and
recovers the costs our members impose on the system.
In the human resources arena, GVP will continue to work
on development of succession plans for not only our general
manager but key employees in the organization and will also
continue to evaluate employee compensation and benefits to
ensure that our staff is fairly compensated and incentivized to
continue their good work.
The Board of Directors also used Kevin Sump to
perform a board assessment to insure that the Board of
Directors is properly focused on its responsibilities and the
lines of communication between the Board and staff are
open to provide a healthy and informed dialogue concerning
management of the company. The Board of Directors believes
both the strategic planning session and board assessment
were a success.
This year also saw the expansion of the Grand Valley
Power / Grid Alternatives low-income community solar project,
which was built last year. The expansion project provided for
a build out of an additional seventy-one (71) KW of capacity in
the community solar project at a favorable price. This project
has been a great benefit to a number of our lower income
members and has garnered national attention for Grand
Valley Power for the foresight and success of the project. I
would like to thank all the staff members and volunteers that
worked so hard to make the project a success.
GVP, with the assistance of Maves Construction, also
designed and built a storage shelter for our mobile substation.
The shelter provides protection for one of our most important
backup assets and also provides an indoor location to provide
maintenance and upkeep when needed.
GVP revamped its scholarship program this year. The
Board of Directors feels that the scholarship program is one
of the most important ways GVP gives back to the community
each year. With the increased cost of secondary education,
the Board of Directors felt that an increase in the amount of
scholarships this year was appropriate. The Jack Broughton
CMU Scholarship was increased from $1,000 to $2,000 per
year. This scholarship is renewable for a total of 4 years.
Six GVP one-time scholarships of $1,500 per year were also
approved. GVP continues to award an electrical line worker
scholarship of $2,000 and added an additional Western
Colorado Community College scholarship of $1,500 this
year. Our scholarship program is funded by unclaimed capital
credits, as allowed by state law. This is a great way to put
these funds to work for our community.
GVP also revamped the scholarship selection process
by appointing a committee of GVP members and local
retired educators composed of Sandra Haulman, Mark Vana,
Ruby McCall, Dave Bristol and Jon Bilbo to help award the
scholarships. They reviewed scholarship applications and
we believe came up with an excellent group of scholarship
recipients this year. Thanks to them for their valuable
assistance. The scholarship recipients will be recognized at
our annual meeting.
GVP continued our support of the Grand Junction
Economic Partnership. The Board of Directors and
management believe that Grand Junction Economic
Partnership continues to provide a critical service to the Grand
Valley in recruiting and expanding businesses to diversify
our economic base. GVP director Tom Benton and General
Manager Tom Walch both serve on the Grand Junction
Economic Partnership Board of Directors, with Tom Benton
serving as the President this year. I thank both gentlemen for
their efforts in this regard.
In January of 2016, GVP’s long time attorney Gregg
Kampf of Hoskin, Farina & Kampf, P.C. was recognized as the
Grand Junction Chamber of Commerce Citizen of the Year.
The entire Board extends congratulations to Gregg for this
well-deserved honor and for all his efforts toward making the
Grand Valley a better place to live.
On behalf of the Board of Directors, I would like to thank
our great staff for all they do to “keep the lights on” and give
our members that hometown connection. I would also like to
say goodbye and thank you to Tom Benton, who is retiring
from the Board of Directors after six years. His insights and
financial acumen will be missed on the Board.
I would like to conclude by reminding all of our members
that the Board of Directors and management value your input
and opinions on issues facing them and Grand Valley Power.
I would encourage each member to contact a member of
the Board of Directors or Tom Walch at any time should you
have questions or concerns about the operations at GVP.
Your thoughts and ideas are critical to our on-going success.
Thank you for being a part of Grand Valley Power.

GENERAL MANAGER’S REPORT
If we travelled back 80 years in time, and could view the
Grand Valley back in 1936, we would see several ambitious
Fruita farmers trying to figure out how to take advantage of a new
rural electrification program being promoted by the Roosevelt
administration. Their friends in the cities already enjoyed
the benefits of electricity: electric lighting that eliminated the
need for dirty kerosene lanterns, labor saving electric stoves,
washing machines, refrigerators and electric pumps for their
wells. These visionaries wanted this same quality of life on their
farms. They determined that the best way to get started was to
gather applications and collect funds to cover start-up expenses.
They figured that $5.00 per application should be enough to get
the ball rolling. So these ambitious, visionary leaders scattered
across the Lower Valley, trying to convince their friends and
neighbors to scrape together five bucks to help Colorado’s first
rural electrification program get off the ground. By August, they
had enough momentum to file papers with the Secretary of State
officially forming Grand Valley Rural Power Lines, Inc., and our
organization was born!
Fast forward to 2016, and the fledgling utility those farmers
started has grown to a company with more than $85 million in
assets, serving over 18,000 meters! In previous reports, I have
described Grand Valley Power as an enduring success story.
For my annual report this year, I am pleased to say that we have
extended this success another year. The traditional metrics for the
year ending December 31, 2015 bear this out:
• The cooperative has maintained its strong financial position.
Margins, while down from the previous year, still topped $1.5
million. Equity remained stable at 34.9 per cent. During the
year, Grand Valley Power refinanced $19 million of Rural
Utilities Service debt. This will save about $4 million over the
life of the debt.
• System reliability marks remained robust. In 2015 Grand
Valley Power reported an excellent System Average
Interruption Duration Index (SAIDI) of 56.847 minutes. This
indicates that our consumer outage minutes were about 40
per cent lower than average – one of the top marks in the
state.
• Grand Valley Power continues to be a national and state
leader in promoting the cost effective use of renewable
energy. Again, renewables comprised almost 26 percent of
all energy delivered to GVP consumers. Our cooperative is
the unquestioned leader in making clean renewable energy
accessible to low income consumers, as we developed and
then expanded the nation’s first community solar installation
dedicated to serving low income consumers.
• Our owners - member cooperative’s of our cooperative share
in the organization’s financial success. In 2015 over $1.5
million dollars in patronage capital was returned to Grand
Valley Power members. In our 80 years of existence, this
is the highest annual capital credit retirement we have ever
recorded.
• Consumers continue to give our workforce high marks for
quality of customer service. Follow-up surveys were directed
to consumers dealing with Grand Valley Power service
planners, servicemen, and construction crews in 2015. Out of
46 consumers who rated the cooperative’s service, 44 gave
our representatives five stars – the highest rating possible!
(The other two respondents gave our service four-stars – the
next highest rating.)
• Perhaps most significantly, we achieved these results while
keeping Grand Valley Power’s retail rates at or below the
midpoint for Colorado rural electric cooperatives.
While there is good news is these results, we know that current
success doesn’t guarantee future results. It won’t be easy to
navigate the stormy waters of change that lie ahead of us. Some
of these changes will fundamentally transform the way electric
utilities operate:
• For decades, the primary source of electric energy has been
coal-fired generation stations. As we can all see – whether
we like it or not – this source of generation is on the way
out. Its successors – solar, wind and natural gas sourced
electric generation – will be challenged to match King Coal’s
legacy of affordable and reliable energy. These other sources
of electricity present cost, volatility and intermittency issues,
along with their own distinct environmental concerns.
• The way Grand Valley Power’s distribution grid is used
is changing. With increasing frequency, consumers are
generating excess energy from rooftop solar installations
and using their connection to our grid to sell it back to the
cooperative in accordance with Colorado’s net metering law.
This presents system operation and safety challenges which
have been managed effectively so far. A more immediate
concern is the rate impact of this development. Utilities
will have to focus increased attention on rates to maintain
fairness and ensure that all consumers bear the costs that
they impose on the distribution system.
• Advances in technology should help utilities operate more
efficiently, and promise to give electric consumers more
control and more choices than ever before. But technological
opportunities come with a price tag. The cost can be much
greater for utilities that make the wrong decisions with
respect to these opportunities.
• Utilities – even small electric cooperatives like Grand Valley
Power – face growing threats from evildoers who would do
us harm. These threats include cyber-attacks on computer
networks, physical theft, vandalism and even terrorism. We
must take all reasonable steps to protect our cooperative
from these threats.
Meeting the challenge of change means that, in some areas,
we will have to change the way we do business. We will do so
when it is necessary. But even as we change, we will stick to the
core principles and values that have enabled Grand Valley Power
to succeed for the last eight decades. Our cooperative structure
helps us do this. We have a locally elected board of directors that
is accountable to the member-owners of the cooperative. This
board takes its responsibility for providing effective direction and
oversight very seriously. We have hometown employees who take
pride in providing exceptional service. Everyone in the organization
understands that Grand Valley Power has an important role to play
in our local communities. Everyone in the organization understands
that delivering value entails a lot more than just delivering kilowatt
hours. This is where our focus will remain: delivering value to
Grand Valley Power’s member-owners!
BY TOM
WALCH

STATEMENT OF OPERATIONS & PATRONAGE CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
GRAND VALLEY RURAL POWER LINES, INC.
2015 2014
TOTAL OPERATING REVENUE
Electric energy revenue $30,223,152 $30,446,671
Other Operating Revenue 242,227 248,183
Total Operating Revnue $30,465,379 $30,694,854
OPERATING EXPENSES:
Cost of Power Purchased 17,406,439 16,683,287
Operating Expenses - Transmission 9,830 57,762
Operating Expenses - Distribution 2,161,765 2,024,132
Maintenance of Distribution Plant 807,991 712,562
Accounting and Collection Expenses 1,204,975 1,161,997
Other Customer Expenses 353,656 412,704
Administrative and General 2,086,882 2,126,424
Depreciation 2,325,123 2,289,074
Taxes 797,851 759,187
Interest on Long Term Debt 1,735,917 1,869,817
Interest Expense - Other 712 717
Other Deductions 127,686 225,321
Total Operating Revenue Deduction $29,018,827 $28,322,984
Electric Operating Margin 1,446,552 2,371,870
Non-Operating Margin
Interest Income 42,679 37,606
Other Non-Operating Income 7,409 664,155
Total Non-Operating Margin 50,088 701,761
Cooperative Capital credits 65,571 146,809
Net Margins for Period $1,562,211 $3,220,440
PATRONAGE CAPITAL at Beginning of Year 25,251,865 23,551,500
Subtotal 26,814,076 26,771,940
Less Retirement of Capital Credit (1,538,727) (1,520,075)
PATRONAGE CAPITAL at End of Year $25,275,349 $25,251,865
WHERE REVENUE
DOLLARS COME FROM
EXPENSES
RESIDENTIAL 65%
COMMERCIAL & INDUSTRIAL 33%
IRRIGATION & OTHER 1%
WHOLESALE POWER COST 57.1%
ADMIN & GENERAL 12.0%
OPERATIONS & MAINTENANCE 9.8%
DEPRECIATION 7.6%
TAXES 2.6%
INTEREST 6.1%
OPERATING MARGINS 4.7%

BALANCE SHEET
GRAND VALLEY RURAL POWER LINES, INC.
AS OF DECEMBER 31, 2015 AND 2014
ASSETS 2015 2014
UTILITY PLANT
Electric plant 85,771,806 83,812,656
Construction Work in Progress 1,920,729 1,099,838
87,692,535 84,912,494
Less: Accumulated Depreciation 22,066,420) (20,145,578)
Total Utility Plant 65,626,115 64,766,916
INVESTMENTS 1,385,815 1,345,301
CURRENT ASSETS
Cash and Cash Equivalents 2,153,675 1,723,611
Temporary Cash Investments 750,000 397,000
Receivables (less provisions for uncollectable 4,207,202 4,330,824
accounts of $71,000 in current period &
$65,000 in prior period)
Materials 1,835,538 1,838,452
Other Current Assets 68,591 64,641
Total Current Assets 9,015,006 8,354,528
DEFERRED Charges 1,505,384 1,773,464
TOTAL ASSETS 77,532,320 76,240,209
EQUITIES AND LIABILITIES
CAPITAL EQUITIES
Patronage capital 25,275,349 25,251,865
Other equities 1,387,858 1,271,717
Accumulated Comprehensive (loss) (36,900) (36,700)
Total 26,626,307 26,486,882
LONG-TERM LIABILITIES
Mortgage Notes 43,433,539 42,482,128
Less: Current Maturities (1,359,000) (1,385,000)
Total Long -Term Debt 42,074,539 41,097,128
OTHER LONG TERM OBLIGATIONS 632,800 654,629
CURRENT LIABILITES:
Current maturities of long-term debt 1,359,000 1,385,000
Accounts payable 1,897,555 1,973,330
Accrued Interest Payable 88,795 95,277
Accrued taxes 904,356 822,136
Other Current Liabilities 1,959,065 1,844,307
Total Current Liabilities 6,208,771 6,120,050
DEFERRED CREDITS 1,989,903 1,881,520
TOTAL LIABILITIES & CAPITAL 77,532,320 76,240,209
AVERAGE CONSUMER COST PER KWH
CUSTOMERS PER MILE OF LINE
0.14
0.13
12
KWH COST
0.12
0.11
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
CONSUMERS/MILE
11
10
9
8
7
6
0.02
5
0.01
0.00
2001 2003 2005 2007 2009 2011 2013 2015
4
1966 1971 1976 1981 1986 1991 1996 2001 2005 2010 2015
YEAR
YEAR

OUR YOUTH
Marta Morris
Palisade High School
Sean Diehl
Central High School
Carolena Campos
Grand Junction High School
Maia Honeycutt
Grand Junction High School
attending
Marian University
attending
University of Northern Colorado
attending
Colorado Mesa University
attending
University of Northern Colorado
Cody VanWinkle
Fruita Monument High School
Miranda Raines
Fruita Monument High School
Dakotah Matarozzo
Jack Broughton/CMU
Sanford Atkinson
Palisade High School
attending
University of Wyoming
attending
Evergreen State College
Scholarship
Plateau Valley High School
2016 Youth Leadership Camp
SERVICE
AWARDS
EMPLOYEES
Scott Bradley —35 years Cathy Gledhill – 35 years Darrell Gilbert – 25 years
Serviceman Manager of Finance Mapping Technician
Steve Don – 25 years Pat Kanda – 25 years Cindy Roling —10 years
Manager of Engineering Staff Accountant Operations Dispatcher
Derek Elder – 10 years Laurie Miles – 10 years Crystal Adams —10 years
Manager of Member Services Consumer Account Rep Consumer Account Rep
Tony Ippolito – 10 years Matt Mason – 5 years Seth Casorla —5 years
Service Planner Journeyman Lineman Journeyman Lineman

BOARD OF DIRECTORS
John Gormley
President
Grand Junction
Rod Martinez
Vice President
Grand Junction
Bill Rooks
Secretary/Treasurer
Orchard Mesa
Tom Benton
Member
Grand Junction
Dennis Haberkorn
Member
Appleton
Don McClaskey
Member
Loma
James O’Connor
Member
Fruita
Bob Saunders
Member
Mack
Sylvia Spangler
Member
Collbran
ELECTION OF DIRECTORS
This year there are two candidates running to fill three director positions. The candidates certified by
the election supervisory committee and the board of directors are incumbents Rod Martinez and Sylvia
Spangler.
Since there is not a contested election this year, the Board of Directors has determined not to have a mail
ballot. Directors will be elected by the members present at the annual meeting, in accordance with the
cooperative’s bylaws.

YOUR ANNUAL MEETING
The Annual meeting of Grand Valley Power will be held on
August 4, 2016 beginning with registration and dinner at
5:30 in the Ballroom of the University Center at Colorado
Mesa University.
PRSRT STD
US POSTAGE
PAID
GRAND JCT. CO
PERMIT 1
The map below 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 assist with parking and
help direct attendees to the meeting room.
MEETING ROOM
PO Box 190
Grand Junction, CO 81502-0190
Phone 970.242.0040
PROGRAM & AGENDA
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 Thursday, August 4, 2016 at 6:30 P.M., for
the purpose of electing a Board of Directors
as provided by the bylaws and the transaction
of all business which may be properly
brought before an Annual Meeting. Dated at
Grand Junction, Colorado, this 16th day of
September, A.D., 2015.
AUGUST 4, 2016
5:30 p.m. – 6:30 Registration & Dinner
6:30 p.m. – 7:30 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 publication.
3. Approval of minutes of previous meeting.
4. Presentation of reports of President and General Manager.
5. Election of directors.
6. Unfinished business.
7. New business.
8. Adjournment of formal business meeting.
9. Drawing for door prizes.