It's Electrifying! - February 15, 2005

IT'S ELECTRIFYING!

At the December 16, 2004 board meeting, the OPALCO Board of Directors voted to approve a rate increase of 8% for retail electric rates and an increase of $1 a month to the basic charge for both residential and commercial accounts, effective March 1, 2005. OPALCO General Manager Randy Cornelius has written this article to explain the increase in more detail and illustrate how this increase will affect your electric bill.

Many of you probably know by now that the primary reason for this rate increase is that, in 2006, OPALCO is expecting a 30% increase in our wholesale power costs (which represent approximately 33% of our total operating budget). In addition, our transmission costs will increase by 10% in October 2005. These increases have a tremendous impact on current electric rates. Before approving this increase, the Board of Directors attended two work sessions; they reviewed revenue requirements and revenue projection models designed to address the wholesale power increase and our maintenance and capital improvement needs.

An 8% residential electric rate increase will move our energy rates from 6.02 cents/kWh to 6.50 cents/kWh, and our commercial members’ energy rates will move from 5.42 cents/kWh to 5.86 cents/kWh. An average member using 1,000 kWhs per month would pay the following under our new rate:

Basic Charge $23.00

1,000 kWh @ $0.065 $65.00

State Utility Tax @ 3.873% $3.41

Total Charges For This Service $91.41

Compared to $85.38, which is the cost (including taxes) for 1,000 kWhs under the 2004 rate, this is an increase of $6.03 per month.

Based on the above data, our average member pays $3.05 a day for the electrical energy they need to run their home. In comparison, a 16 ounce espresso costs $2.96, and three 20 ounce bottles of water will run you $3.00. A gallon of propane, which presently costs $1.99 per gallon at the pump, will produce 91,000 BTUs (British thermal units). It takes 26 kWhs of electricity (which would cost $1.69 at our new energy rates of 6.50 cents/kWh) to produce 91,000 BTUs, a savings of 30 cents. Even with our new rates, we feel electrical energy is the most cost effective alternative. For more energy saving ideas, please feel free to call Martha Warachowski, our Energy Management Coordinator, at 376-3571.

Everyone at OPALCO understands the pressures of increasing costs, and we are working hard to control operational costs and still keep our system strong and reliable.

OPALCO
Member Owned & Operated

Basic Charge	$23.00
1,000 kWh @ $0.065	$65.00
State Utility Tax @ 3.873%	$3.41
Total Charges For This Service	$91.41