The following was submitted by Orcas Power and Light Cooperative.
At its November meeting, the OPALCO Board approved the 2014 budget for a total of $30,665,000, which includes a rate increase of 6 percent.
The increase is necessary to meet the 2014 budget’s operating expenses, including a 9 percent Bonneville Power Administration (BPA) rate increase, significant construction projects to replace aging underground cables and preparations to replace a redundant submarine cable in the San Juan to Lopez crossing that was laid in 1977.
The board’s recent directive to accelerate broadband expansion has a neutral effect on the budget and rates. The rate increase will be effective with the March billing.
As a nonprofit and member-owned cooperative, OPALCO delivers electricity at cost to 20 islands in the San Juans. The cost of service is determined through a variety of factors including an independent cost-of-service study conducted every four to five years to make sure each member rate class is paying its fair share. An update to the current study is scheduled in 2014. OPALCO’s cost to purchase power from BPA is adjusted every two years. In the recent BPA rate case (effective Oct. 1, 2013), rates went up by 9 percent, which affected OPALCO’s financial health and ability to get financing in case of major capital expenses (like the submarine cable replacement) or emergencies.
This increase is independent of the board’s Nov. 21 motion to “accelerate expansion of OPALCO’s … high-speed data infrastructure.”
The budget includes construction projects already slated for 2014 to build out the co-op’s communications infrastructure (also referred to as the backbone or middle mile). The board directive asks staff to accelerate that expansion and lift the moratorium on new fiber connections once system design, rates and policies are approved. Any new connections would be made at the cost of service with a neutral effect on budget and rates.
Power rates will continue to rise for the foreseeable future as the Federal Columbia River Power System reaches capacity and market-rate power purchases (Tier 2 rates) increase to meet the demand. Watch the Sounder for more information on how OPALCO is working with nonprofit organizations to increase energy and conservation efficiency and encourage local renewable generation.
“Working together, we can reduce our co-op energy load and mitigate the impact of regional rate increases,” say OPALCO representatives.
The approved budget will be posted online with the November meeting minutes. Board packets are posted online at www.opalco.com one-week prior to each board meeting. Co-op members are welcome to attend meetings.
For the latest information, go to www.opalco.com, sign up for an email newsletter (http://www.opalco.com/about/email-signup/) and follow them on Facebook (Orcas Power & Light Cooperative) and Twitter (@orcaspower).
