OPALCO members to get a year-end bill credit

Submitted by Orcas Power and Light Cooperative

Colder temperatures in 2017 brought in greater revenue than projected and, as a result, all OPALCO co-op members who paid a bill for any part of 2017 will receive a credit on their last bill in December. The total amount to be credited back to the member-owners will be in the range of $750 – 950K (TBD after close of November business); residential members with average energy usage will see a credit of about $50.

Back in 2015 when warmer temperatures caused a reduction in co-op revenues, the Board put Policy 29: Rate Design into effect with an Energy Charge Adjustment (29.2.2.2.8). The Energy Charge Adjustment provides a variable mechanism to balance fluctuations in energy revenues, positive or negative. To balance the lost revenues in 2015, members paid a “Revenue Recovery Add-On” line item on their bills. In this case, members will see an “Energy Charge Adjustment” line item on their December 2017 bill with a credit amount.

OPALCO is a non-profit cooperative that operates at the cost of service. The budget process forecasts weather, energy purchases and expenses and then rates are set to meet those costs with a margin at year-end sufficient to pay out capital credits and meet equity requirements. The margin is returned to members as capital credits on a 25-year cycle. A surplus margin, such as occurred in 2017, doesn’t benefit the Co-op budget for the next year and creates a larger capital credit obligation on the backs of members in 25 years. The Board decided to put the dollars in members’ hands now instead of waiting 25 years.

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The 2017 margin was trending toward about $3 million as the third quarter came to a close. Estimating weather (temperatures) and year-end expense, the Board decided to adjust the margin to return a portion to the membership, increase capital credit distributions to include approximately 45 percent of next year’s obligation and create a Board Restricted Fund of approximately $500,000 to cover unforeseen emergencies or opportunities.

If you have questions or comments about this energy charge adjustment bill credit, please join us for a live streaming event on Facebook scheduled for 10 a.m. on Tuesday, Dec. 12. Staff will be discussing the bill credit and answering questions.