Electricity rates likely to rise again

It now appears likely that the rates local consumers will be paying for electricity will increase by another four percent in 2007, and again in 2008.

"That's an approximation of what will likely happen over the next two years," Orcas Power and Light Cooperative General Manager Randy Cornelius said. "But it's not a done deal."

Rates for electric power have been increasing every year since 2003. The latest four percent rate hike took effect in March 2006.

The reason rates continue to rise is because OPALCO can no longer get a long-term deal at a discount rate from the Bonneville Power Administration, the federal agency that furnishes hydro-electric power to OPALCO. OPALCO had such a sweetheart deal from 2001 to 2006. It was provided "because OPALCO was willing to commit to buying power from Bonneville for five years, BPA Account Executive Stuart Clarke explained at OPALCO's annual meeting May 6. Those utilities in the Pacific Northwest that refused to enter into a long-term deal with the BPA saw their rates skyrocket.

The OPALCO board has known for several years that it would have to pay the going wholesale rate from Bonneville. Rather than hit its members with one huge rate hike, it has been phasing it in since 2003.

OPALCO is cautiously optimistic that the new rates will hold steady. One good sign is Bonneville's improving financial situation. The heavy rain and snow fall this winter provided the BPA with more water to sell to utilities in Arizona and California. Moreover, said Clarke, "The prices for surplus power were very good, and very high." They added $250 million more than had been expected to Bonneville's coffers.

But there continue to be reasons to fear that rates will go the other way. Another winter drought will drive up prices, as could lawsuits by environmental groups that, if successful, will require Bonneville to spend more money to protect fish in the Columbia River.

NEW BOARD MEMBER

Chris Thomerson and Roger Crosby are Orcas Island's representatives to the OPALCO board of directors. They were the top two vote-getters among the five who competed for the job. The tallies were as follows: Thomerson, 343; Crosby, 316; Bob Brunius, 283; Ed Peterson, 206; William Burlew, 139. OPALCO members who cast ballots voted for two of the five.

Thomerson has a degree in electrical engineering. His work experience includes training representatives of the BPA. Crosby, an incumbent, has been with the board for 18 years.

A total of 354 people attended the annual meeting, which took place May 6 on a Washington State Ferry. Last year just 250 people were at the meeting.

IN THE RED

General Manager Randy Cornelius reported that OPALCO's fiber optic network is $161,000 in the red. Its revenue comes from selling connections to the network to those wanting to use it. Cornelius expressed optimism that OPALCO will reach break-even within the next three years, and that the system will have paid for itself in seven to 10 years. The network will eventually loop through all the main islands, plus Blakely and Decatur. It already connects to Anacortes and Bellingham.

It was also reported that OPALCO has joined with the San Juan Island National Historical Park and the U.S. Forest Service to provide solar power to American Camp on San Juan Island. The joint effort has been nominated for an award from the U.S. Department of Energy for its efforts promoting renewable energy.

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