–by Alex MacLeod —
As 2016 begins, and yet another OPALCO rate hike kicks in, it is worth looking back at 2015 to see how OPALCO’s go-it-alone Internet business is doing.
For starters, Rock Island Communications has blown through nearly $5 million of what was to be a three-year, $7.5 million “startup” loan from OPALCO. And what does it have to show for it? As of its December report, it had about 400 fiber customers and almost no LTE connections, in total less than half of what it projected through the year.
On the broader expense side, OPALCO has spent as much as $11 million to expand what it calls the “electric-grid backbone,” virtually all of which, in truth, is for its Internet business. It spent more than another $1 million to buy and make active Paul Allen’s wireless spectrum, and this year plans to increase the staffing of Rock Island to about two-thirds of the total staffing of the core electric business.
Meanwhile, the “electric-grid backbone” investments, which were promised to produce actual savings in operating expenses, have produced none. Instead, expenses continue to grow and grow, from $13 million in 2009 to a budgeted $22 million this year — and that doesn’t count another $3 million in operating expenses for Rock Island.
The result for us members has been predictable.
In 2015, the board raised everyone’s base charge 36% and raised overall rates by 12%. Then in July it tacked on a 10% surcharge on energy use to keep on the right side of its lender. This was after raising rates 6% in each of the previous two years. This year, the rate increase is 5%, but that doesn’t count a new charge on everyone’s bills to raise more money for the many county residents who no longer afford to pay their electric bills.
On top of that, the board last month cut in half its annual return of “profits” (in non-profit terms “profits” are called “margin”) to longtime members and said it would continue that for several more years. It blamed that on the added borrowing costs to replace underwater electric cables; the reality is there would have been plenty of money to finance that debt had OPALCO not chosen to go into the Internet business.
The saddest part of this story is it didn’t have to be this way.
OPALCO had a deal with CenturyLink that would have delivered at least 10 mbps service to at least 75 percent of all island households at virtually no cost to OPALCO. The resulting speed would have been more than adequate for most households; others could pay, as they have in the past, to connect directly to OPALCO’s fiber network.
By comparison, OPALCO’s go-it-alone plan, even if all its goals are met, will provide faster Internet to just 25 percent of island households, yet all will pay the infrastructure costs to get there.
So, why did the OPALCO board choose to do all this on its own?
Greed is probably the simplest way of putting it. The board saw being in the broadband business as a goose that would lay unending golden eggs of profit. Never mind that it had no experience in running anything other than a sleepy monopoly, nor undertook any meaningful assessment of risk before taking the plunge.
While any other entrepreneur would have to go into the market to raise capital, OPALCO could rely on its federal loan program. And why care about risk when, as a monopoly suppling people essential electricity, you could just fund anything simply by raising rates — as we’ve come to learn. It also is trusting that no new, cheaper, solutions will come to market, something the history of technological change would say is likely.
I have written many times about the financial burden the OPALCO board has been dumping on its members only because the board and management have not be straightforward — some might say honest — about what it is doing. All along, I have told OPALCO and members of its board to show me that I am wrong and I will stop writing. Instead, its public-relations people chastise me for my “strong opinions” and the board advises members to rely on it for information and not mistake my writing, or anyone else’s, “for the real conversation.”
The bottom line is that OPALCO is going down a path where the many are paying for the benefit of the few, the financial risks to the cooperative are becoming increasingly clear and the board has committed to its lender to raise rates as often and as much as it needs to avoid default.
The pit is bottomless, so brace yourselves.
(Alex MacLeod is a longtime OPALCO member who lives on Shaw Island.)
There was no done deal with Century Link. CenturyLink’s proposed terms would have taken member-owned infrastructure out of co-op members’ hands and put it into the hands of an absentee corporation. Not a good use of member resources.
OPALCO is in good financial health. Read the board materials online (see link below) and come to your co-op board meetings. Rock Island’s acceleration of construction in 2015 will net greater connections in 2016, including and especially LTE services, which will equalize Internet access for islanders of all income levels.
As financial expert and co-op member Joe Cohen points out, the Rock Island investment is good for the community and good for co-op members. Even if a member never subscribes to Internet services, the benefits in profit return, community safety and community economic development will pay exponentially more in dividends. (see pages 61-64 in the budget presentation linked below).
The world is changing, including San Juan County. An automated distribution grid – a smart grid – is required to meet the current and known future needs of our membership. We are building our grid to meet those needs and can, with a relatively small investment, leverage that same grid to provide essential communication services to our members.
https://www.opalco.com/wp-content/uploads/2015/12/2016-Budget-Presentation.pdf
While I do have concerns about OPALCO’s rate structure, I would NEVER, EVER have wanted our cooperative to go into business with CenturyLink, which appears–in my personal experience–to be the worst managed large company in the country.
As a retired OPALCO employee as a Member Services Rep for nineteen years I have been out of the loop the past three years since retiring except for what I read in the OPALCO newsletter and the comments I hear from members I run into in the grocery store, post office, etc. Everything I hear from members makes me sad and disappointed that the electric cooperative I’ve known and loved for over thirty-three years seems to have changed direction from where it had been going. I’m not saying that’s all bad, but so many are no longer trusting OPALCO and don’t believe what the co-operative is telling the membership. I’ve taken many calls over the years from members who were upset when our basic charge increased or rates went up. Though not all were happy with the explanations, they at least understood the reason for increases. I have to admit that I was shocked to only receive one-half of my 1990 capital credits. To my knowledge that has never happened before. And at 74 in ten days I wonder if I’ll ever see the other half in my lifetime. To me that was really a low blow. I just hope the current board really is doing the right thing for the membership and that the whole broadband issue doesn’t turn out to be a financial disaster.I always hope for the best for OPALCO, which means I wish all of the membership the best because one thing has not changed – the members ARE OPALCO.
I am continuously amused by these detailed discussions and mind wrestling matches regarding OPALCO. Look, for the basic consumer here we don’t have the time or energy to debate these idiotic intricacies. Speaking for myself, I moved here 5 years ago and expected to pay more for….everything. But that “everything” has limits and that’s already been pushed and continues to become more ridiculous particularly as a property owner. I can’t imagine what that burden is like for some others less fortunate. Let’s move past this this BS with the details and focus on the dumb consumer like me who is seriously considering moving away because this all is really getting ridiculous and out priced….even for an island. Is that what we’re shooting for?
And ultimately the majority of us don’t care about your past experience with OPALCO or opinions. We care for what we have to pay for power. It’s a bottom line issue that seems to get so muddied on this island. It’s simple to the consumer who works all day, tries to take care of their family, and give what they can to local businesses. But if you want to charge us 39% more for power…… Bye. I’m done personally.
OPALCO has a real opportunity to address Mr. McLeod’s concerns here. There likely are others in the community with similiar concerns.
Rather than dismiss the issues, why not carefully address each one.
After all, Mr. McLeod is a member and as such an owner.
The OPALCO “situation” is complex and, superficially, hard to understand. As a retired resident, however, the broad-strokes picture is simple and clear: the unprecedented and rapid cost and rate hikes project a sense that OPALCO, as a community-owned cooperative, is having policy and financial problems, and is passing the buck, literally, to its owners/customers. It really is as simple as that.
I sense a palpable, diminished, level of trust in OPALCO by many of its members, nicely articulated by Ginny’s post above.
I’ve been disappointed by OPALCO’s management and Board’s responses to initiatives I’ve put forth which were intended to restore the membership’s trust to its traditionally high level.
Other than to meekly submit to on-going rate increases, it remains to be seen how its membership can support OPALCO so that it can meet the multiple challenges of looming capital expenditures and evolving technologies in a changing world, as well as meet its fiduciary responsibility to steward member-owned assets.
OPALCO members have the choice whether to look backward and criticize or look forward and build. No one knows the future, so no one should be criticized for not knowing the future.
OPALCO members who use internet are going to pay something to someone for that service. Better to keep that money in-county. The hiring of personnel for RIC should not be a criticism, it should be a credit: jobs in the San Juans instead of Comcast employees on the mainland. A rule of thumb is that for every new self-supported job in a community, two more jobs are created to serve that new employee. No imaginable deal with Comcast could be so valuable to the people and economy of this county. RIC is the single, the only, place where the shrinking middle class in our county has a hope of growth.
San Juan County is a capital-poor county in an overall capital poor state (relative to, say, California and New York). We have no equity investors to invest in our internet service, which with reliable electric power are the only things enabling a 21st century economy and education. Because of the peculiarity of co-operative capitalization, debt is the only sensible source of third-party capital.
The internet is not an option, it is a necessity. Local control is the bottom line. This county will not be left off-line because it didn’t rank high enough on the markets served by a mainland business. RIC is far from a bad investment. It is a lifeline for both OPALCO (enabling energy conservation, consumption and eventually storage partnerships between OPALCO and its members), and the community for personal, business and government purposes.
Backward criticism is easy and therefore tempting. Planning for a growing 21st century economy that benefits both the people and the environment is hard. Our county got this far by not taking shortcuts. I hope OPALCO stays the course.
I agree 100% with your comments, Bill……the longterm benefits of the OPALCO and Rock Island initiatives greatly outweigh any of the criticisms leveled, when one looks at the big picture. Well said!
Suzanne,
Once again you’ve missed the point. The point being that that the negotiations with Century Link were not a “fallacy”, they were a Board directed exploration into the expansion of internet coverage for all of the San Juan Islands. You and Foster Hildreth presented a “Plan B” to the cooperative membership in June of 2013 in a series of public forums throughout the islands extolling the virtues of the cooperation between a large corporation and our small cooperative after the “Broadband Initiative” failed to attract the required number of participants.
It is beyond comprehension that you would label the potential partnership a “fallacy” after you and Foster made your presentations in 2013. Mr. MacLeod (who was never a Board member) attended the meeting on Shaw and the facts that he stated in his article were gleaned from the information you presented in your “forum”. Why would you call this effort, endorsed by the Board, a “MacLeod/ Bogert/ Century Link fallacy”??
Of course this is all a moot point as OPALCO has chosen a new, more expensive, and risky path. But please, give the membership a break … tell the truth and don’t practice revisionist history. The cooperative membership deserves and expects a straightforward, honest post from their communications director.
And, by the way, could you please inform us members as to the details of the “deal” with T-Mobile, another large, for-profit corporation with savvy lawyers?
Thank you,
John Bogert
During the months since the last OPALCO Annual Meeting, there have been numerous comments and rebuttals about the issues articulated in Alex MacLeod’s letter. These issues are both complex and worrisome.
There is another Annual Meeting coming soon, probably in May. My position is that these issues need to be addressed in depth at that meeting by the Board and OPALCO management for the benefit of the membership.
Forget the “dog and pony show”. Forget the “door prizes”. The ferry schedule leaves precious little time to speak on the substantive issues of concern. The entire program should address the concerns of the many members who have expressed frustration with the actions of OPALCO during the past two years.
I would be interested in discussing such an agenda with Forrest and the Board as soon as possible so that the members can benefit from an Annual Meeting of consequence. If you have ideas along these lines, please comment !!!
I continue to have deep concerns over the future of our cooperative particularly as it relates to its effects on the less fortunate in our county and its apparent effects on discouraging conservation and local alternative energy production.
I think Orcas Issues offers a wonderful and somewhat unique county repository where islanders can share their thoughts on important issues. Even citizens like Bill who are not OPALCO members, but will benefit from our co-op’s broadband efforts can share their thoughts. For those tired of reading the details then don’t bother. Those who see problems and want something better can read to find information and perhaps map out a better future or at least learn from our mistakes.
There is benefit to understanding the past and how we got to where we are. Ultimately, I think our county missed out on the opportunity of having our co-op become a broadband “market maker” rather than a “market taker.” Focusing on wholesale broadband and not the retail end of it would have been far cheaper and much less riskier than pursing the current schizophrenic-like mixed retail and wholesale model being pursued in broadband.
It appears to me that the board never meaningfully examined the costs and risk differences between a true wholesale only approach to broadband (as Mount Vernon successfully did with their Open Access fiber network) and the mixed model the board is working toward now. That is retail with some wholesale, which pits our co-op against existing local Internet Service Providers. Mount Vernon has 7 to 8 broadband and telecom retailers providing competitive pricing and choices to their residents and businesses and it operates in the green without having incurred any debt. Every year they have net income from those wholesale broadband sales to expand their network or feed into their municipal coffers.
It is clear to me when formulating their broadband plans our board didn’t assess the affects the seemingly endless billing increases would have on the approximate 20+ % of our citizenry living at 2 times the poverty level or lower. The level needed for OPALCO’s Project PAL to kick in.
Instead, their knee jerk reaction several years ago was to make an emergency mid-year funding of ProjectPal with $50,000 out of the general power bill revenue. It was a tacit acknowledgment their energy billing increases driven by broadband decision making was having on ill effect on our county.
I think a similar amount was renewed last year. Not a hardship for those able to pay the billing increase, but taking it out of the power sales means those poor souls who have to deliberate on what food staples they can afford each week will have to pay out even more in power bills to help those selected for ProjectPal subsidies. Just putting them in a worse condition. $150 per year is not a large subsidy, but I’m glad it is there to help those who need it and are willing to have an OPALCO review committed decide their fate.
The ProjectPal $150 per year subsidy is rather small when you consider how much our basic monthly charges are going to continue to increase. OPALCO projected this out to 2019 when it expects residential meter bills to be $78 per month on just their fixed portion of their bill. That is about $630 per year *more* on fixed charges than we were paying before the broadband study began. That’s $6,300 every decade that those poor members must somehow increase their net income levels to keep their existing living standards. Many of them are already on the edge and being forced to move. One woman reported to me that when she went into OPALCO to complain about the rate increase she was told she could always move.
Some of the added $630 per year in fixed charges will go to cable replacement, but a significant portion is paying for claimed “smart grid” infrastructure improvements and increased operating expenses. Most rural electric companies use robust, self-healing wireless mesh networks to do their smart grid and crew communications at a small fraction of the cost we are putting into fiber related assets which still need radios anyway for crew communications.
All the costs of putting fiber cables throughout the county claimed to be for “smart grid” are sized for consumer broadband and is a significant financial burden placed on our member-owners both to build and to maintain. In many routes we have two fiber cables installed on poles. Some cables have 96 fibers others have 144 and even 256 fibers in each cable. All the network equipment to provide retail broadband is charged to the energy side of our co-op. 50 switches were bought for about $500,000 and entirely charged to the grid side. One of those switches likely would have been more than enough to handle our smart grid field equipment needs. Likewise, when a new network operations center had to be built to house that equipment it was charged entirely to the grid-side. More cross-subsidization. It doesn’t take a smart person to realize that is over kill for smart grid.
The board never commissioned an economic study of the affects their broadband infrastructure “investment” costs and increased operating expenses would have on our county. Pros or cons. It wasn’t until late last year that the board even bothered trying to assess the actual depth of poverty in this county. And then only because some of these members were actually taking the time to come to board meetings and voice their concerns and unhappiness. If memory serves, the OPALCO study claimed 19% are at LIHEAP (Low Income Home Energy Assistance Program) levels or lower in terms of income. That’s only 150% of the 200% federal poverty level (FPL) required to benefit from ProjectPal. So it isn’t a huge stretch of the imagination to believe there are over 1/5 of all our households at 200% of the FPL or less. . I examined the census data for our county and think it supports that observation.
Alex I think understates the amount spent on “smart grid” infrastructure. One board member stated last year it was between $12 to 15 million, but there is no easy way to verify that amount. Requests to management for our construction work plans filed with the RUS have gone unfulfilled though I was told it would be provided. I think that was well over 6 months ago. Construction work plans are a potential way to get a grasp on what is being spent on “smart grid” and make it a lot easier to assess how much of that is really needed for smart grid and how much for consumer broadband.
CenturyLink is problematic, yes. But I think those who claim our co-op shouldn’t work with them no matter what the opportunity are letting their emotions sacrifice the potential of letting our members have real choices between independent ISPes and CenturyLink providing the retail broadband and letting them take on all the support, service and business risk that entails.
Branching into the retail broadband and telecom business comes with significant risks, but the board has chosen not to elucidate those risks to our membership. They admitted at one board meeting I attended they have no exit strategy out of their broadband business if it doesn’t pay for itself. That all concerns me. Shortfalls mean deeper reaching into members’ pockets for more electric bill revenue to pay for broadband.
Clearly OPALCO needs to care more about all citizens in this county who are dependent upon its monopoly position as their electricity provider. And by “OPALCO” I mean not only the board and management, but its largely acquiescent member-owners. It’s that lack of active and constructive participation from members with a board and management that is not consumed with trying to “sell” us something that lets management and the board divert the primary focus away from providing affordable and safe electric service.
Electric utility co-operatives are a hybridized legal beasts that if run conscientiously can reflect the great virtues of the Rochdale Cooperative Principles. However, our cooperative is well on its way to becoming an abusive hindrance to the less wealthy in our county through its rate structure revisions and ceaseless billing increases.
Becoming a broadband & telecom company is what has been driving our boards’ decision making for over a decade. In some cases it has made them delay necessary maintenance to our underground distribution lines. Which can be and has been a safety issue. Our former general manager stated as a board member in a board meeting that he had been very patient with the board delaying replacement of failing buried distribution cables while they were trying to decide what to do about broadbnd. Something I complimented him for his candor. As a board member he could speak his mind in front of the membership where he could not safely do so as general manager in regards to that topic.
In other cases, broadband decision making has driven the board to lay fiber only submarine cables when our smart grid needs could have easily been satisfied with short hop wireless communications at those crossings. Proof of this is that OPALCO’s network links from San Juan Island are entirely wireless. It easily covers the smart grid and provides the consumer broadband requirements. Fiber will only be needed to support the consumer broadband levels they want to provide in the future. Maintaining and replacing a radio link is far easier and cheaper than submarine fiber only cables.
The board and management’s claim that it will only take 2 years at $3 per month per energy member for the $7.5MM (million) Rock Island startup loan to be paid off by our electricity bills doesn’t add up. $72 times 12,000 members only adds up to $864,000. It must be that Rock Island will take on its “own” loans to pay off the loan from the grid side after 2 years, but that’s just shifting the debt from our company to our wholly owned subsidiary. The risk of loan failure repayment is still on our energy members and broadband shortfalls will have to be made up out of our energy members electricity bills.
And don’t forget $4.5MM of that loan is there to provide up to $2,500 per member as a credit for connecting to the broadband network. Clearly cross-subsidizing retail broadband with energy members’ hard earned money. Keep in mind that the retail broadband service agreement is only a 2 year commitment it will take over 7 years for a broadband subscriber to repay the principal and interest on that $4.5MM loan with the current retail broadband rate structure. Plenty of time to have other competitive and possibly cheaper alternatives to have their effect on our broadband market. Broadband through low earth orbit satellite constellations may be one of those threats before those loans are paid off.
Likewise, the claims by management and our board that these fiber related smart grid “investments” are saving every member 29 cents per year between 2014 and 2020 are not credible to me. They don’t appear to include all the related costs and over ½ the claimed cost savings appears to come largely from a speculative $1+ MM “savings” related to liability should we ever have a fatality or injury lawsuit not adequately covered by our insurance due to a lack of crew communications with emergency services, but as I mentioned before solving that problem with a wireless mesh network is far cheaper and more robust than running fiber far and wide to wireless radio masts.
Having attended many board meetings I’m not sure I can agree with Alex’s assessment that greed is why the board has adopted their risky current retail broadband-telecom expansion. He is correct it is no small investment. There has been plenty of expensive stumbling which I won’t list here that has wasted energy members’ hard earned cash.
I think it is probably more accurate to describe the boards’ actions as a combination of good intention, with a lack of meaningful economic analysis (or common sense) in terms of the impacts of the costs and benefits to our county and co-op members, mixed with hubris that comes with a lack of self-examination in faulty decision making, and perhaps a bit of white-knight syndrome. Then add the spin generated by OPALCO’s press machine and there seems to be little or no doubt of success or nary a mistake made. There appears to have been a marketing approach used to “pitch” this to a poorly informed or misinformed membership. It appears one consultant was paid over $1/2 million to provide such advice. Had the surveys sent out to our members come with an estimate of the added costs to their power bills I suspect far fewer would have said “yes” we want better broadband at that increase to our power bills. One board member answered candidly to several of us at a board meeting that about $300,000 had been “pissed away” on the original broadband study that eventually cost us $1.2MM of our members’ energy bills. There have been other wasteful missteps I won’t mention here.
The board mandated that the use of our fiber and wireless communications backbone not be charged to OPALCO broadband consumers for the use of that oversized “smart grid” network. That is also cross-subsidization. I think the motivation to burden the energy consumer with this risky broadband retail adventure is not greed, but a perception by the board and top management that retail broadband service needs to be priced as competitively as possible with the current choices.
In Friday Harbor, I have a tenant that gets 25 Mbps down / 2 Mbps up 24/7 for $45 per month from the incumbent telco. Significant improvements could have been made to CenturyLink’s remote service cabinets (DSLAMs) to provide better broadband had the collaboration between them and OPALCO gone through. I believe that was with OPALCO only leasing dark fiber to those cabinets.
Similar speeds or higher are supposedly provided by the local cable company in Friday Harbor and OPALCO makes wholesale revenue from that cable company on the sale of its broadband fiber backhaul to the mainland. This is an example of how adequate provisioning and our co-op providing wholesale broadband can make for competitive choice in the retail market place. I think OPALCO has missed a significantly cheaper and much lower risk opportunity to create that environment in our county.
One technologically capable OPALCO board member told me after the board announced it could not afford the initial retail plan they came up with that he thought the collaboration with CenturyLink would significantly improve broadband speeds through up to 80 percent of the county. He also stated this to the large roomful of members attending that meeting. I confirmed with him that he had actually seen CenturyLink’s engineering plan and he thought it was achievable, not smoke and mirrors. That’s with no or little changes to the cabling that already goes into everyone’s premises. A CenturyLink regional president stated at a county council meeting that their deal was not exclusive so would not prevent local ISPes from providing retail broadband using OPALCO’s backbone network or dark fiber. Another board member who had attended the discussions with CenturyLink told me he was impressed that CenturyLink came to the meeting with a very real plan, revealed their capabilities, and that this was attended by their regional president and top level engineers. You don’t share like that or put that kind of effort into discussions if you aren’t serious about collaborating. Let’s not forget this was not an exclusive deal. It wasn’t like our members couldn’t get wireless or even fiber related services from local or mainland ISPes as our network connections grew.
I suspect what queried the deal with CenturyLink was the OPALCO board’s unwillingness to give up on their dreams of becoming a broadband retailer. Who wants to compete at the retail level with a wholesale provider of fiber backhaul. I also suspect that fiber would not need to have been lit by OPALCO. Meaning no costs to be recouped other than the fiber cable. No services, no need for an expanded network operations center.
OPALCO is not a low cost supplier of electric energy or broadband. It only has to provide electricity at the “cost of service.” Because we are a private, member-owned company a small board can make decisions that commit all its energy members to financial burdens of the risky venture and cross-subsidization into broadband. And this was done without asking the member-owners to vote on it. It is the board’s legal right to do so and there is no power given to the state utility commission or Attorney General to protect the poor and low-income members of our co-op.
Two owners of local Internet Service Providers told me they were asked by OPALCO (one by a board member the other by an employee) how much longer they wanted to be in business? The message being, play with us and let us buy you out or get trampled. This is the way of business. It certainly is the way of a monopoly trying to ensure successful entry into new business. It is not the way I want my cooperative to behave in the broadband market that already has retail choices.
One board member claimed at an OPALCO public forum that CenturyLink had altered the nearest remote box (DSLAM) so his homeowners’ association was getting 10Mbps download speeds. Yet he wanted to convince his fellow homeowners to go in together to get connected to the OPALCO fiber. Later it became apparent the cost was too high and not enough owners wanted to make the investment even with the incentive credits of up to $2,500 each from loans fed by our energy bills.
There is a real benefit to having broadband choices in our county. OPALCO’s retail plan requires taking and keeping a significant market share to succeed. It’s very existence is predicated on monopolistic behavior in the electric energy space and I don’t think our co-op management or board likes having to think competitively. The whole decision to keep raising the fixed portion of our residential energy bills up to at least $78 per month is driven by heavy increases in both debt service and operating expenses. They don’t want to have to risk rate structures that don’t guarantee the revenues needed. As an unregulated monopoly they seem to be getting away with these higher and higher fixed charges. Remember those high ”facility” charges don’t address increasing costs of BPA power which will be reflected in kWhr rate increases.
But the rate structures now and planned for the future seem counter-productive to encouraging alternative energy investments or conservation by our members and to have those who use more to pay their fair share for the facilities they burden.
The 10,000 square foot home places more demand on our facilities than a 600 square foot apartment and yet the board’s decision to move to make its revenue requirements mostly through fixed charges treats it equally as an apartment of 600 square feet when it comes to sharing facility costs. By 2019 both meters will come with $78 in fixed monthly charges. The poor can’t escape that by turning down their heat and putting on warm coats in the Winter. There are still going to have to come up with $630 more each year to cover those fixed charges.
To me these ceaseless billing increases smack hugely of inequitable burden on those who do not want or cannot afford OPALCO broadband products. They are paying to cross-subsidize those costs of services they will never receive because those broadband driven infrastructure choices and related operating expenses are baked into our energy bills as “smart grid”.
OPALCO needs to care more about its heavy footprint on this county and the ill affects its excessive spending is having and will continue to have on the less fortunate members in our co-op. These members are a significant portion of our county and co-op owners who deserve and are entitled to equitable treatment.
PS – And that new 5% billing increase Alex mentioned was projected to continue in future years as shown at a financial planning board meeting last month. If memory serves one scenario had at least 4 years of 5% increases each year. In regards to Ginny’s shock at receiving only ½ her 1990 capital credits I’ll note a 2008 report stated co-ops who use a first-in, first-out method of refunding capital credits use a 20-year cycle. It also cited an NRECA report that in 2006 there was $2 billion in equity built up in electric co-ops and only $499 million had been refunded to member-owners. It appears to me our heavily debt ridden cooperative is paying out those capital credits with increased billing and at a 26 year payback delay the repayment of their share of the equity is probably worth ½ what they paid in excess energy bills. This capital repayment scheme exists so that the IRS will not take away our non-profit status.
Gray Cope
45 year resident of San Juan Island and OPALCO member-owner
OPALCO BYLAWS:
Section 10: Removal of Directors and Officers.
Any energy member may bring charges of malfeasance or misfeasance against an officer or director by filing them in writing with the secretary, together with a petition signed by ten percent (10%) of the energy members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the energy members, and any vacancy created by such removal may be filled by the energy members at such meeting. The director or officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at
the meeting to be heard in person or by counsel and to present evidence; and the same person or persons bringing the charges against him shall have the same opportunity. The members may, at any meeting at which a director or directors shall be removed, as hereinafter provided, elect a successor or successors thereto
without compliance with respect to nominations.