–– from John and Susan Fleischer —
Recently, OPALCO sent out an e-mail about the energy future, Rock Island, and the low income needs assessment. In this e-mail, OPALCO appears to support a “go faster” approach to Rock Island expenditures for the sake of “return on investment”. This may be a sound corporate strategy. Problem is, OPALCO is still a power CO-OP designed to serve it’s members, not harvest returns for its investors.
Power rates have repeatedly gone up to cover sinking revenue. While I agree OPALCO’s recent financial concerns warrant attention, we should not be pushing for more spending and the raising of rates any further as the low income needs assessment shows.
OPALCO hopes that Rock Island will generate income to aid the power side. I really hope it does. As a Rock Island customer and OPALCO member I’m on your side. But it will take time to realize a return on the fiber. Don’t overspend trying to prove that OPALCO can do this. Be smart about how you grow. And let’s not hire any more helicopters.
John: Thanks for your comments and support. We are taking a low-risk approach to growth and will continue to reduce expense wherever we can while maintaining our service levels to 20 islands. And, I realize the helicopter was a conspicuous expense, however it actually saved us money over barging the poles to multiple islands, which was our only other option. Thanks for reading the newsletter – and for your regular participation in co-op governance.
Sorry – meant to address the comment to John and Susan.
If Opalco were a private business numerous inside staff would have been laid off long ago. This is not meant as a criticism of those who might go. Belt tightening in the private sector is common place. Opalco’s revenue estimates without a plan B were egregious. We are human and can make mistakes. What was and is missing here is an “I’m sorry, we made a mistake”. When people like Bill Anders, Joe Cohen and other serious number crunchers are outraged enough maybe Opalco will quit putting school teachers and Judge’s on the Board and only recommend number crunchers, will this mismanagement end. I believe Mr. Anders saved General Dynamics, I am sure he could save Opalco from themselves.
Theresa Haynie for OPALCO. Mr Aldort, the diversity of our Board is the result of our membership who vote them in, or in the case of filling a vacancy, self-nomination. Our Board members take their fiscal responsibility seriously, and the many other talents they bring to the board beyond financial expertise are critical to making the smart and balanced decisions that keep our Co-op strong. Interesting you mentioned Joe Cohen and Bill Anders. Joe Cohen’s very supportive take on the broadband initiative was the topic of a recent letter here in Orcas Issues. Or, see his video in Foster’s recent GM newsletter (archived on our website). Bill Anders spoke to our GM following the recent Dan Kammen climate talk event and praised Foster’s work to move the Co-op forward. Thankfully, OPALCO is not a “private business” but a member-owned cooperative, providing more than 50 essential jobs in the community and keeping the lights on for members on 20 islands.
Nothing said above vitiates the painful truth, implicit in the Fletchers’ letter above, that increasing OPALCO expenses will hit the low-income households the hardest, given its current rate structure. Just do the math. The study they cite found that these are over 20 percent of the total number of households — to me a shocking result. Thus OPALCO needs to pay serious attention to its expenses, as the Fleischers say, especially while making the transition to becoming an internet provider. If the costs of that activity leak across to the general ledger, low-income households will feel the worst effects.
There are electric utilities which understand that asking their customers to use less juice will lead to reduced revenues. These businesses try to restructure their rates and expenses, in order to reduce the impact of capital costs upon their ecologically-conscious customers.
There are also electric utilities which are continuing blindly, using the same old operational and billing model.
Their customers are faced with ever rising electric bills, even as they do their best to use less electric power.
OPALCO seems to be taking a very rational path, branching out into a closely-related public-communications business in what seems to be a useful attempt to reduce the impact of rising electric-utility capital costs, while its members strive to reduce their power use.
I suggest that OPALCO be permitted to try to make this strategy work, and that complaints about its acquisition of Rock Island Communications are premature and counter-productive.
Let’s see if OPALCO’s strategy will work, before we condemn the venture. We may eventually be pleasantly surprised.