— by Tom Owens —
When I came here some 22 years ago, OPALCO was widely viewed as a vital and credible part of our community. OPALCO was supplying their electricity without a lot of fan fare. The Board was made up of long time members who easily got re-elected unless they chose to retire. Well, those seem to be the good old days. What happened ?
Lately, I have been reading OPALCO’s literature and and following its public statements with interest. Having worked in the power industry for 30+ years, I tend to have questions about issues concerning electricity. While I have gotten some explanations from OPALCO’s PR staff and actually met with OPALCO once, here are some examples of what I view as missteps.
Questions on fiber usage by Rockisland Communications (RIC) – With all the chatter on OPALCO’s RIC investment, I wanted to have a clear statement for OPALCO on who was going to be using the grid communications investment that the electric customers are paying for. Would RIC be using it or building their own system? I asked the question a number of times but could not get a clear and direct response. The question finally went as far as an email from me to Mr. Hildreth (OPALCO’s General Manager) asking the question yet again. I have gotten no response and it has been about 2 months.
Request for Cost/Benefit Study on our current electric meters – In an email that I saw, Mr. Hildreth refers to a cost/benefit study done by OPALCO that was used in the decision process to purchase and installation of our current (not so smart) meters. I have asked for a copy of this study and said no rush. Well, it has been 2 months and I have not gotten a response.
Request for access to undersea cable information – I decided that an article explaining the importance of the undersea cables that OPALCO owns and how this investment was performing would be of interest to OPALCO’s customer/owners. I submitted my request but got told I had to submit a form complying with OPALCO policy #16. I did this and again said no rush, as I was told they were busy preparing their 2016 budget. Well, it has been 2 months and I have not gotten a response.
Politically correct Statements are all in vogue these days. We can not believe the politicians, but we should be able to believe OPALCO! But as customer/owners, what are we getting? Here are a few examples.
OPALCO says it operates ¨one of the most complex distribution systems in the country¨. OPALCO operates 15 substations, 26 undersea cables and 1339 miles of power lines (reference OPALCO’s website). Our nearest neighbor utility, Puget Sound Energy (PSE), operates 354 substations, 13,000 miles of power lines and 10,000 miles of power cables (reference PSE’s website). Just how complex is the OPALCO system?
OPALCO says it provides ¨some of the lowest cost electricity in the country¨. A quick comparsion with our nearest neighbor utility, Puget Sound Energy, showed OPALCO’s billing for my usage to be about 50 percent higher than similar servce would be from PSE (I am a slightly below average energy user). I would need to use 3 times the average OPALCO customer energy usage to make the costs equal. (reference my OPALCO bill and PSE’s website, giving rate structure). Just how low cost is that?
I would really like to see OPALCO regain its credibility. In my view, OPALCO’s Board needs to put a stop to the OPALCO Spin Machine and start offering direct, correct and clear explanation to their customer/owners. Dismissive statements to folks that have questions are not productive. Telling them to ¨go read the BPA contract¨ sure is not responsive to a customer/owner. OPALCO could view a public question as an opportunity to acknowledge the issue, then clearly, correctly and directly tell the world what and why OPALCO is doing something.
I am not affilliated with OPALCO in any way other than being a customer/owner.
Good questions, Tom. Asked by many. Still not explained to the Public in a transparent way. The answers we have gotten go something like this:
member/stakeholder Q – “please explain to me how many apples will it take to do projects A and B?(Laying of fiber and purchase of RIC – separate from supplying electric power) How much of A & B are paid for by the owner/members if we don’t go for broadand or RIC? How many apples will we still have to pay for A & B anyway? IF none, then why the expectation that fixed facility rates will be almost $80 a month by 2019? Since the submarine cables will carry both electricity and projects A $ B inside of them, isn’t it fair to assume that we’re all paying a lot of apples for stuff we never intend to use, and that should not be costing us, as electricity purchasers, anything?”
OPALCO Answer – “if you pay $1500 to hook up to RIC (not mentioning digging trenches, putting up antennas everywhere, and installing the cable up to your place) and our fiber communications system, you can have a bushel of these very nice oranges, AND a $1000 rebate! none of the oranges we are giving out are being paid for by electricity apples, even though the cables carrying them are all being paid for by the apples we charge every member.”
HUH?
What of technology changes? won’t fiber technology change very quickly too? will this all become obsolete in 5 yrs or less for something better, lighter, and faster? What then of the stuff we already have paid many millions of apples to put in each of the $15+ million dollar cables we need? (18 of them!)
If someone hits a fiber pole on the mainland and knocks out all of our communications for a day or more, as has happened more than once already, is this a vulnerability endemic to fiber? Was this ever explained transparently or satisfactorily? Will it be?
We’re throwing all our apples into a carton of oranges without some major question answered, and against the will of the members/stakeholders.
BTW I asked a Bonneville staff member what his fixed facility rate was, over in Eastern Wa . His answer? $9.75 per month and 7 -something cents and hr for each KWH.
As a relative newcomer to the island, I’m wondering if it isn’t time to move forward from the issue of OPALCO’S lack of transparency/credibility to the next step. What can stakeholders do, given the widespread dissatisfaction? What are shareholders’ options? It seems the issues generating the mistrust have been adequately voiced and it’s time to examine the alternatives for shareholders.
Historically, when a corporation, religion or government is being less than clear about its operations and intent, it has something to hide. One tactic used to deflect questions is to talk above the conversation in an insulting attempt to make the questioner feel ignorant and unsure. We may hope that is not what has been happening here.
Theresa Haynie for OPALCO here, to Bryan and others:
OPALCO makes all Board agendas, financial reports, Board Minutes and other reports presented to the Board available online in our Resource Library. We want our Co-op members to be well informed, and that is one of our highest priorities as a co-op. We invest enormous amounts of time fielding calls, meeting one-on-one with members (Mr. Owens, for one), and listening to and responding to member concerns by email and phone. You’d be very hard pressed to find any other organization in the islands providing the level of detail that OPALCO does. We encourage you to give us a call and attend Board meetings. We are here to help our owner-members
There are many facets to what is happening and the members who generally are clueless in many cases have drunk the Koolaid. Here is an example. The budget is prepared by management and approved by The Board. The budget for 2015 was prepared by Randy Cornelius who was the manager at that time. The budget assumed that we would be selling as much power in the coming winter as in the previous winter. There was no plan B. We had a very warm winter and ended up with a serious cash shortfall. Both Randy and The Board were responsible for the debacle that ensued causing us to bail out Opalco with a one cent per KWH surcharge for a year. No one every said “I’m Sorry”. No one was fired. No one ever said “We made a mistake”. What did happen was that the members rewarded Randy’s bad budget by electing him to The Board.
I was an outspoken critic of the broadband initiative and arranged a meeting with Foster Hildreth who explained to me the thinking behind the actions The Board had taken. In the face of warmer weather being the new norm and less electricity being sold the broadband revenue may save the utility with another revenue stream. We will have to wait and see how it plays out.
Opalco has about 11,300 members. The overhead without electricity purchases has to be borne by the membership. In the past the base fee plus a markup on the electricity covered our costs. The base fee has been rising due to smaller electrical sales. What I am about to say is controversial but given that the “snow birds” are not paying their fair share since they are gone half the year and buying next to no electricity the most logical solution to the budget is to divide the total overhead by the total membership and make that the base fee and sell us the electricity at cost. This no doubt will inflame those who have less resources and conserve as much as possible but the fact is that no matter how much you conserve the overhead must be covered. The cost to a member to have the ability to come home and turn on a light is the same for a tiny apartment as it is for a 10,000 foot home. While this may seem unfair to low energy users it is the fairest way to handle Opalco’s finances.
This does not address whether or not Opalco’s staff is bloated.