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This change is being driven by the large electric consumers who see a potential for lower rates in a competitive market place. There seems to be a consensus that full competition in the electric industry will average electric rates across the country. Of course, that means electric rates in the Northwest will move up to average while other parts of the country will move down to average. The board spent a lot of time trying to assess the impact that a competitive electric industry will have on you, our members. We believe that OPALCO is presently positioned better than most utilities to compete in the future. While our rates are higher than our nearby neighbor utilities, their rates continue to climb faster than ours do. The real problem that I see is the competition for "cheap". Who can provide power the cheapest? If you are looking for cheap, there are going to be ways to do it for less than we can. If all of our linemen lived on the mainland and rode the ferry to work and our outages didn't get repaired until after everybody on the mainland had power, our power would be a little bit cheaper. If all of our system engineering was done on the mainland, our power would be cheaper. If we didn't have our member services people here to handle your problems and we were just a voice at the end of an 800 phone number, our power would be cheaper. I think we need to be competitive in price, but I believe that you, who are ultimately going to make the decision, are willing to pay a little bit more for power from an organization that is locally owned and controlled and has people who live here in San Juan County to meet your needs. I donut know how much more you are willing to pay for this local control and service, but I don't think that you are willing to pay very much of a premium. I think the majority of you are willing to pay a few cents more on an average monthly power bill to have OPALCO here to serve you. Our job is to make sure that it is not more than just a few cents a month and that the products and services we offer compare favorably with those of our competitors. We are a long way away from taking all that we gained at our meeting at Camp Orkila and putting it into action. Over the next several months, the board of directors and the staff at OPALCO are going to set out a road map that will help us prepare for the competitive future. We want to be your utility of choice, and the meeting was a major step to make this happen. Doug Bechtel
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