— by Chris Thomerson —
Overall electric bills, adjusted for inflation, are now almost 15% lower than they were twenty years ago. During this recession, while the Board continued supporting community projects and programs, and held back on rate increases, electric bills did not keep pace with increasing costs.
Remember in 2009 our economy crashed. Construction tanked, home prices and sales nose dived, jobs disappeared, and, even low paying jobs became scarce. Wage earners and their families left the Islands.
In response to this, OPALCO Board directed that construction projects supporting local companies continue, member low income support such as PAL continue, member cost savings such as the Energy Efficiency programs continue, but that grid updates be postponed, rate increases be kept to an absolute minimum, and financial reserves be drawn down to pay for the shortfall.
We all expected the economic recession to last a few years. Instead, it has dragged on for more than six years, and is still with us just now starting to ease. OPALCO reserves were depleted as far as was prudent. We were needing to increase rates to start rebuilding the financial position of our non-profit co-operative and to begin electric grid improvements to keep our electric grid reliable and efficient for the future.
Then, last year OPALCO saw a “perfect storm” caused by weather. A cold snap in February caused member energy demand to exceed BPA allocation for one hour, triggering BPA to charge a $200,000 assessment.
2014 was our warmest year on record causing a dramatic revenue shortfall of $1,400,000. OPALCO cut expenses by $400,000 to reduce the financial damage.
Then, the other shoe dropped.
During our cable inspection process we discovered that the underwater transmission cable to San Juan Island was degrading faster than anticipated and needed replacing ahead of schedule to maintain reliability. Replacement was brought forward to 2017 and the preliminary bid estimate was a whopping $15,000,000. All this has a huge negative impact on financials.
With reserves low, grid updates that will no longer wait, significant losses from last year and facing a very expensive cable replacement over the next few years, the Board has had the backbone to make the unpopular but necessary decision of raising rates to start replenishing reserves to the level necessary to keep our non-profit Cooperative healthy and sustainable.
Concurrent billing changes to rebalance the ratio of Facilities charge to Energy charge meet the objective of fairly allocating the costs of the electric system.
OPALCO leads the nation in delivering low carbon low cost energy. OPALCO electricity continues to be among the cheapest in the nation. Check it out at https://is.gd/ypy5KN
My goal is to ensure OPALCO continues to reliably deliver the cleanest electricity, at lowest cost, when you need it, and, fairly allocates the costs of doing so.
With my understanding of our local environment and my technical skills and utility experience, I ask for your vote to continue on the Board of our valuable local non-profit resource, OPALCO.
Please vote by mail-in ballot or on-line at opalco.com.
Thank you
**If you are reading theOrcasonian for free, thank your fellow islanders. If you would like to support theOrcasonian CLICK HERE to set your modestly-priced, voluntary subscription. Otherwise, no worries; we’re happy to share with you.**
Thank you Chris for your explanation of the history and reasons for the need for a rate increase. Hopefully more of the members will now understand why it is necessary. I think many of the members either are somehow not aware or don’t think about the fact that OPALCO is a “member-owned” cooperative, and as such, the members are the ones who vote for the board members. Those of us who have been here over twenty-five years get a capital credits check annually based on usage twenty-five years ago. The more you pay the more you get back. In a roundabout way members could (and most probably won’t) look at higher rates as somewhat of a benefit in the long run.
And, a reminder to all OPALCO members – please be sure to vote. Your vote does count!