Administration

The GRPUC adopts an annual, non-appropriated budget that includes both capitals outlays and operating revenues and expenses. The budget is based on the overall financial plan for the GRPUC, considering the results of various rate studies that project anticipated revenues and required expenditures over a five to seven-year period. Budget-to-actual comparisons are made on a quarterly basis, with appropriate action taken at that time.

Utility rates are reviewed annually and adjusted per financial plans or as needed. Cost of service and rate design studies are conducted routinely for each of the utilities. Ancillary charges and special service charges, applicable to each Utility, are also reviewed and updated as needed. In 2020, David Berg Consulting conducted an electric cost of service and rate design study to review GRPUC retail electric rates. The results of the study were presented to the GRPU Commission with a five-year financial plan and financial performance indicators.

In 1997, the GRPUC entered into a payment-in-lieu-of-tax (PILOT) agreement with the City of Grand Rapids and amended the agreement in December 2009. The PILOT agreement provides the terms and conditions under which the GRPUC will make payments in lieu of taxes to the City and how the City will pay for Utility supplied services. Terms of this agreement may be modified by the GRPUC after meeting and conferring with the City Council. Previously, the GRPUC transferred 4.84 mills (one mill equals one-tenth of a cent) per kilowatt-hour sold at retail to the City as an in-lieu of tax payment, with a minimum annual PILOT of $823,000. Effective January 1, 2013, the payment in lieu of tax increased to 5.00 mills per kilowatt-hour sold, with a minimum annual payment of $868,000.