New Opalco Surcharge
Posted June 1, 2015 at 5:40 am by Tim Dustrude
New Opalco Surcharge To Correct Revenue Shortfall;
Rate Structure Discussion Ongoing
OPALCO leadership pledged to continue to work toward a better rate structure while, in the interim, a surcharge will appear on bills beginning in July to address the revenue shortfall.
More than 20 members representing four islands attended OPALCO’s special board meeting on Thursday, May 28th in Eastsound. As is customary at OPALCO Board meetings, each member was invited to speak to the Board and most did. The topics touched on by member comments were primarily rate fairness, transparency, communication with members and appreciation for the Board’s foresight and progress with broadband.
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General Manager Foster Hildreth led the presentation on the factors influencing the current $600,000 revenue shortfall and provided background on rate structure and design. Key concepts addressed were the relationship of weather to rates and the actual impacts on member bills.
In a nutshell, a member bill equals rates multiplied by weather. Warmer weather equals a smaller bill; colder weather equals a larger bill. The revenue shortfall is due to lower than projected sales of kilowatt hours because of record warm temperatures this year. The presentation is available at www.opalco.com (PDF).
A number of potential solutions to the revenue shortfall were presented and discussed (use Find Documents to see the May 2015 Board Materials online). The Board will move forward with a surcharge beginning with the July billing period to correct the revenue shortfall. The total revenue amount needed each billing period to balance accounts will be calculated, and the surcharge applied to each member bill based on pro-rated kilowatt hour usage.
“The Board has a fiscal responsibility to keep the Co-op in the black,” said Board President Jim Lett. “The surcharge will meet that need as we further evaluate and research longer-term rate solutions to address the changing landscape.”
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