Powering Strong Communities

Grand Haven Board of Light & Power Approves $38 Million Budget

The Grand Haven Board of Light & Power, a Michigan public power utility, recently approved a $38 million budget for fiscal year 2024.

David Walters, general manager, and Lynn Diffell, finance manager, provided a detailed presentation outlining the balanced budget in April and conducted a separate work session in May.

Power supply costs remain relatively flat for the upcoming fiscal year at $19.3 million. The five-year Capital Improvement Plan, which is largely made up of investments in the distribution and transmission systems, is projected to be $24.8 million. The approved budget shows that base electrical rates would remain stable for the year.

Vice Chairman Gerry Witherell commented, “We’ve been able to keep our revenue requirements essentially flat for an almost ten-year period. This is an impressive demonstration of the leadership team using prudent financial management principles to conduct the affairs of our electric utility.”

One of the largest factors contributing to cost stability has been the development of a diversified power supply portfolio.

Diffell commented that while many other communities are struggling with unfunded liabilities due to legacy pension costs, the BLP developed and followed a financial management plan over the past seven years to properly address these commitments.

“We have been following a proactive plan with a goal to reach a 100% funding level in the defined benefit pension plan. The pension plan liabilities are now almost fully funded, which is a healthy sign of following good financial management principles,” said Diffell.

The Board approved the General Manager’s recommendation to set aside and restrict $16 million for environmental remediation on the former Sims Site located on Harbor Island.

Additionally, the Board approved adding a surcharge of $0.0035/kWh to monthly bills to begin recovering increased environmental costs resulting from combustion coal residuals findings of the recently completed drilling program on the former Sims Site.

The Board, as recommended by Utility Financial Solutions, LLC, also established a minimum cash reserve level to ensure the electric utility can continue providing reliable, affordable, and sustainable power for the approximately 15,000 residential, commercials, and industrial customers in the City of Grand Haven and the surrounding area, it said.