Low-end users of electricity in for a shock? | Guest Column

Multi-year utility rate increase

By Chom Greacen

Be warned.

Some of us, particularly small electricity users, might be in for an electrifying shock treatment. Electricity prices are going up to the point where some may no long be able to afford this supposedly basic necessity.

Despite OPALCO’s effort to educate its members about the recent electricity rate hike, not many may realize the full implication of the OPALCO’s January 2015 board decision.

The board approved a 12 percent rate increase across the board starting February 2015. The 12 percent increase is to be followed by four more increases at 6 percent each year in the next four years.

This means a combined 41percent increase by 2019, on top of past rate hikes. It is debatable whether a 41 percent increase in electricity rates by 2019 is justified.

Even if the proposed massive rise was warranted, there is still the issue of cost allocation and affordability. The rate impact does not fall on all members equally.Chom

In an attempt to recover more fixed costs by increasing the monthly charge (“facility charge”), small users are disproportionately affected by the newly approved rate structure. As shown in the graphic, small users may see as much as a 160 percent increase in electricity bills by 2019. In comparison, an average resident, with monthly consumption of around 1,000 kilowatt-hours, will see a 38 percent rise, while the increase for larger users will be even less.

Though some small users may be well-off owners of vacation homes, others are low-income households living on a tight budget or environmentally conscious individuals who try to live with a small footprint, or both.

The OPALCO board may have good intentions but their approved tariff structure has two undesirable consequences. 1: giving a disincentives for people to conserve energy—the more you use, the cheaper the total per unit cost of electricity is; and 2: electricity becoming unaffordable for low-income population in the county.

The volunteer-based program “Project PAL” provides some assistance but is hardly adequate. The $150 assistance per year from Project PAL pales in comparison to the increase of $589 in fixed charges alone in 2019.

And, Project PAL can assist only 279 households, about a quarter of eligible low-income households.

What is being questioned here is not the merit of Project PAL but rather the priorities and direction set by the OPALCO board of directors.

Is the board doing enough to ensure affordability for its members-owners? Is affordable electricity service not an important objective of OPALCO? Is OPALCO prioritizing provision of broadband over provision of affordable electricity for all?

These are a set of important questions for all of us members-owners to ask the OPALCO board of directors. This article deals with affordability and rates. Future articles will raise other issues, such as broadband and risks as the OPALCO election approaches.

This year, two director positions from the OPALCO Orcas district are open. Two candidates, Randy Cornelius (recently retired general manager of OPALCO) and Ed Sutton (chosen by the OPALCO search committee), are running against the two incumbents, Winnie Adams and Chris Thomerson.

— Editor’s note: An independent energy researcher, Chom Greacen is co-founder of a Thailand-based watchdog group focused on energy issues in southeast Asia. She lives on Lopez Island with her husband and two children.