|
|
Doug Bechtel
|
|
From time to time your OPALCO directors attend training courses to keep them abreast of the electric utility industry as a whole and what is happening to cooperatives specifically. Recently, one of our directors attended one of these meetings and in his written report to the board, he pointed out areas that we need to be very familiar with. One of the questions he raised in his report was, "Did we know how much our neighboring utilities charge for power?" The truth is, I had not done any checking since shortly after I came to work for OPALCO in 1988. At that time, Puget Power was charging $49 for 1,000 kWh (OPALCO's average residential usage) and we were charging $74, for a difference of $25.
We recently called Puget to compare rates since that time and came up with some interesting statistics. It is interesting because it makes me feel a lot better about the amount that we are charging for electricity.
In 1990 1,000 kWh from Puget was $54.34; from OPALCO $75.48. We were paying $21.14 more. By 1992 Puget's rates had increased to $60.34, while we were still at $75.48 and the gap had narrowed to $15.14. In 1993 OPALCO had a rate increase that increased 1,000 kWh to $76.86. Puget had increased to $65.01 and the gap had narrowed still further to $11.85. In 1995 our rates were $76.86 and Puget's rates were $67.31, for a difference of $9.55. (Puget charges slightly less for power during the summer months.)
We have done a pretty good job of holding our rates down. Of course, both Puget and OPALCO are looking at a rate increase at the end of 1995. We expect that our rates will go up about 2%. We don't know yet what Puget's rate increase will be.
If you use more than 1,000 kWh a month, our rates are actually less than Puget's. If you use less than 1,000, the difference between Puget and OPALCO becomes larger. Puget currently charges a $5 a month residential base charge, while OPALCO charges $20. On the other hand, OPALCO charges 5.4¢ a kWh (up to 3,000) where Puget charges 5.7¢ up to 600 kWh and then 7¢ per kWh over 600 kWh.
The reason that our base charge is so much more is the large investment in submarine cables and other permanent facilities compared to the number of customers and kWh that we sell. Of course, Puget has a large industrial and commercial base and far more customers per dollar of investment. On the other hand, as a non-profit cooperative we are able to buy power from BPA where Puget is forced to purchase more expensive energy. Thus, their energy charge is higher than ours.
Looking at the difference in electric rates, I think we have done a pretty good job of keeping our rates down and letting the rest of the world catch up.
On a related issue, a couple of months ago the members of Inland Power and Light in the Spokane area, and Lincoln Electric Cooperative, southeast of Spokane, agreed to merge their cooperatives. This merger is expected to be complete by the end of September. The reason I mention this is that Lincoln was the only utility in the northwest that has higher residential rates than we do. I sure don't like the honor of having the highest rates in the northwest. I'm going to do my best to lose this distinction.
Doug Bechtel
|