||| FROM ALLAN ROSATO and DARCEY MILLER |||
We are writing out of concern regarding OPALCO’s recently-announced plan to raise the fixed monthly service access charge for residential members. While this may appear to simplify the rate structure, it has a very real and very unequal impact on the people in our community who are already struggling.
San Juan County already has what appears to be the highest monthly service access charge in Washington state. Raising the unavoidable monthly charge from $59.99 to $67.58 per month (with more increases on the horizon) directly harms low-income residents, seniors on fixed incomes, people who have installed solar systems, and families who conserve energy to keep their bills manageable. These households use the least electricity, yet under the new structure, they will pay proportionately more, while higher-use households benefit from lowered per-kWh charges. That is the definition of a regressive rate.
As a cooperative, OPALCO is supposed to serve all of its members equitably. Shifting revenue further away from usage-based charges and into fixed fees reduces people’s ability to control costs through conservation and disproportionately affects those with the least financial flexibility. It also contradicts decades of energy-efficiency policy encouraging lower consumption.
We respectfully ask OPALCO’s board to reconsider this approach and explore alternatives that protect vulnerable members. This could include income-sensitive rate structures, expanded bill-assistance programs, and/or maintaining of a larger share of revenue in the per-kWh charge so members retain some control over their monthly expense. If anything, we should be lowering the monthly charge, falling more in line with utilities across the state. For example, Seattle City Light charges their residential members approximately $9.50 per month for the base access (with $0.1375 per kWh). In Bellingham, the monthly residential fee charged by Puget Sound Energy is $7.49 per month (with $0.1454 per kWh).
We are a rural community that looks out for one another. Our electric cooperative should reflect those values in its decisions.
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During 2025 OPALCO conducted a rate study to ensure the way OPALCO bills the membership is fair and fits with the cooperative principles. As a nonprofit electric co-op, OPALCO is a cost-of-service organization, meaning we only collect as much money as is needed to cover our business costs.
It’s never easy to change the way rates are structured or to raise the rates. This year we will have a bigger increase to the fixed charge and less of an increase to the kWh charges. Due to unique factors to OPALCO, such as a large share of seasonal homeowners who are gone when OPALCO recovers most of the revenues in winter months, raising the fixed rate spreads the costs among residential users in a more equitable way.
To support low income members, OPALCO has two robust assistance programs. The OPALCO Board is committed to always raising the energy assistance monthly credit in line with our rate increases to ensure we continue to support islanders who need it the most and to continue Project Pal that helps members with their winter heating bills.
OPALCO manages one of the most complex grids in the area with 20 submarine cables that cost millions of dollars to install and maintain. Comparing OPALCO rates to mainland providers such as Seattle City Light or Puget Sound energy is like comparing apples to oranges as they have hundreds of thousands of users to spread the costs out to and grids/business models that are very different.
The OPALCO team will be hosting a Zoom meeting on December 15th to answer questions about the rate changes for 2026. You can register here: https://opalco.zoom.us/meeting/register/IL7qlWf5Rd2ET4MSrYdk7Q#/registration
To find out more about the rate study find info here: https://www.opalco.com/wp-content/uploads/2025/09/E3-OPALCO-Board-Meeting-2025-06-19.pdf
Allan and Darcey, thank you for your excellent letter and I could not agree more. While I appreciate the complexities of maintaining our island grid, we should not lose sight of who bears the burden when fixed charges increase.
Yes, OPALCO has assistance programs, but why design a rate structure that requires more people to seek assistance, rather than one that fairly distributes costs based on actual usage? OPALCO invested millions in upgrading the mainland-to-island transmission capacity, and those new cables are already approaching their limits. Demand is outstripping capacity, and likely not because of smaller users. While large homes may sit vacant for months at a time, many still maintain heating systems to prevent pipe damage, continuing to draw substantial power even when unoccupied. The comparison to mainland utilities isn’t about ignoring our unique infrastructure, but about questioning whether an increased base charge is an optimal solution, or rather one that benefits high-volume users.
This new rate structure proposed by OPALCO is designed to benefit them. We have one of the the highest monthly fees in the US. OPALCO can only do this because they are unregulated on monthly rates unlike providers in Seattle or Bellingham, where the regulatory authorities never allow high monthly fees for obvious reasons.. I BECAME AWARE OF OPALCO’S EXTREMELY REGRESSIVE RATES FOR POWER WHEN I RENTED A SINGLE COMMERCIAL ROOM IN EASTSOUND ABOUT 10 YEARS AGO. THE MONTHLY HOOK UP FEE WAS ABOUT $60. I USED AN AVERAGE OF ONE DOLLAR A MONTH OF ELECTRICITY.
This is ridiculous. This would be like a gas station – If it were a monopoly like OPALCO – charging $60 a month to access their pumps. Perhaps you only need 1 gallon of gas for your lawnmower. It would cost you 60 bucks, not six. I have discussed this issue of of small users subsidizing large users with the administration and some board members at OPALCO. Not one has ever responded to the fact that this is a highly inequitable rate structure and the new proposed structure is even worse. For them to call it fair is magical thinking.
What if they had spent the last year researching how to provide more equitable rates? It only took me a few seconds to ask ChatGPT about this. Here’s its response:
The most equitable form of charging for electric utility services in America depends on how equity is defined in the context of electricity access. Equity generally involves ensuring affordability, fairness in cost allocation, and consideration for environmental and social impacts. Below are some of the most equitable approaches to utility rate design:
1. Tiered or Inclining Block Rates
• How It Works: Customers pay a lower rate for a baseline level of consumption and higher rates for higher
levels of usage.
• Equity Impact: Promotes energy conservation while ensuring affordability for low-income households
that typically use less electricity. High users, who often have greater financial means, pay more.
2. Time-of-Use (TOU) Rates with Income Adjustments
• How It Works: Customers are charged different rates depending on the time of day, encouraging energy
use during off-peak hours when electricity is cheaper to produce.
• Equity Impact: Helps balance grid demand and lower costs overall but can be made more equitable by
offering income-based discounts to low-income households that may lack flexibility in energy use.
3. Income-Based Rates
• How It Works: Rates are determined based on household income, with lower-income households paying
less per kilowatt-hour or receiving a subsidy.
• Equity Impact: Directly addresses affordability for marginalized communities, ensuring basic energy needs are met without excessive financial burden.
4. Flat Monthly Fees with Usage Caps
• How It Works: Customers pay a fixed monthly fee for a set amount of electricity usage, with additional usage billed at a higher rate.
• Equity Impact: Ensures predictability in bills and avoids excessive costs for essential energy needs while penalizing excessive consumption.
5. Net Metering or Community Solar Programs
• How It Works: Customers who generate their own electricity (e.g., solar) can sell excess energy back to
the grid, reducing their overall costs.
• Equity Impact: Encourages renewable energy adoption, but programs should include subsidies or financing options to ensure low-income households can participate.
6. Lifeline Rates
• How It Works: Provides a discounted rate for a basic level of energy usage necessary for essential services
(e.g., heating, cooling, lighting).
• Equity Impact: Protects vulnerable populations by ensuring they can afford essential energy, regardless of
income.
7. Demand Charges with Equity Adjustments
• How It Works: Rates include charges based on the highest level of energy demand during a billing period.
• Equity Impact: Encourages users to smooth their consumption patterns, but adjustments are necessary to
ensure low-income or less flexible households are not disproportionately impacted.
Considerations for Equity:
• Regional Variations: The most equitable approach may differ depending on the local cost of electricity,
climate, and income distribution.
• Energy Burden: Policies should aim to reduce the percentage of household income spent on energy,
especially for low-income families.
• Access to Energy E$ciency Programs: Equitable rate structures should be paired with programs that
help all customers, particularly low-income households, reduce consumption through energy efficiency upgrades.
Best Practice: A hybrid model that combines elements of income-based rates, tiered rates, and program.
Hey OPALCO, why not use these wonderful ideas to introduce rates that are progressive, not regressive?
The authors are correct that OPALCO’s new rate structure is “the definition of a regressive rate.” OPALCO’s usual protestations about the uniqueness of San Juan County’s circumstances miss the point. Empty vacation homes are still heated in the wintertime, and the larger the house, the more energy is consumed. As for OPALCO’S energy assistance programs, one is a financing program that “smooths” the same rates over a longer period; the other provides opportunities for donations by ratepayers to other ratepayers less able to afford the same regressive rates. Neither addresses the rate structure itself, which now boosts the regressive service access charge for residential customers who use less energy, while lowering the rate for commercial ratepayers. The bottom line, as the authors point out, is that ratepayers should support the utility proportionate to their usage benefit, not through an increased and regressive service access charge. And if service costs are higher here in the islands, as they surely are, there are other ways to address energy independence and reliability, as “Foo Barolo” points out in a comment on another article: https://theorcasonian.com/opalco-launches-opt-in-renewable-energy-survey-to-gather-member-input/ – comments
There are all kinds of “ways to address energy independence and reliability.” All are in some measure regressive. See my response to “Foo Barolo” at the site quoted above by Brian.
Two lakes. No hydroelectricity. Lots of water but dependent on off island electricity since solar doesn’t work. Anyone have a better solution? Coal, wind, nuclear reactors, natural gas, diesel generators, propane, thermal, underwater wave generators, windmills, wind farms?
When I look around at my friends, neighbors, the renters, even family… I see so much wasted electricity that it makes me nauseous. If I had a dime for every light bulb that I see left on in rooms, and even homes, with nobody in them I’d be rich. If it takes raising electricity prices through the roof to get people to stop wasting power I say “bring it on.”
For as much talk as there is about the need to conserve I just don’t see that happening.
Good discussion for the SJC community to engage in.
The proposed new access charge of $810 a year is the highest I can find in Washington State. Comparing that access charge to Seattle City Light ($114) and PSE ($90) a year is informative, but scale is hugely important in utility fee structures. OPALCO is burdened with a relatively small customer base and the extremely high cost of submarine cables that need periodic replacement, not to mention the relatively sparse density of the San Juan Islands which require extensive transmission lines and costly tree management and/or under grounding the cables. A quick look at other rural utilities in Washington State that are not on the Columbia River dam system have annual access charges in the $450-$500 range.
Labor costs are also incrementally higher in San Juan County since virtually everything is more expensive (housing, food prices, gasoline as basic examples). OPALCO has to pay enough to maintain a viable work force. The top management salaries for PSE, for one example, were above $10 million a year for their chief executive in 2015 … and most of the major PSE executives make well over $1 million a year, and goal incentive pays can add millions to their annual salary.
OPALCO management costs are arguably ballpark reasonable give OPALCO’s unusual complexity and relatively small scale.
The one issue that I believe needs to be addressed in the rate structure is one residential structure paying for two access charges … one for a house access and and additional one for power to a well , although in some cases the well may serve more than one customer. Well access charges should be much less than another $810 a year. No clue how many have that double access charge issue in San Juan County.