Tiered Rates May Not Affect OPALCO until 2014 – Energy Efficiency and Conservation Key to Lower Rates

OPALCO signed a 20-year contract with BPA that began in October 2010, and entered into a tiered rate billing methodology that guarantees OPALCO a set amount of power purchases at the Tier I rate (current relatively inexpensive rate structure supplying current fuel mix of mostly hydro) and includes a new Tier II rate structure for load growth beyond our measured “high water mark*” for load growth. Tier II power will be subject to market rates and available sources; no guarantee of our usual clean, green fuel mix.

Based on BPA load forecasts and OPALCO load management strategies, OPALCO does not expect to begin in incur Tier II charges until around 2014 – or later.  2014 is a moving target that could be pushed back with greater energy efficiency throughout the co-op (member by member) and additional renewable generation. This gives OPALCO members a couple of years to develop energy efficiency practices and improvements in their homes.  We just don’t have big industry (read really big loads) in San Juan County and so we have a lot of “power” at the co-op member level to limit our load growth through energy efficiency and conservation.

The new tiered rate methodology is a complex concept but the more understanding members have, the greater potential for members to be motivated to change energy behaviors (beginning with awareness) and take action toward energy efficiency. The best first action that anyone can take toward developing an awareness of their household’s usage and improving their household’s energy efficiency is to have a Home Snapshot Energy Assessment – it the best $25 investment a homeowner can make toward energy efficiency and lower energy bills.

Stay tuned to this blog and to local papers for more information on rates over the next couple of months.

*Contract High Water Mark: To determine the amount of power that OPALCO will get at the Tier 1 rate, BPA has created the concept of “Contract High Water Mark” (CHWM), which is basically a set number of megawatts (MW’s) that OPALCO will get based on its measured usage in 2010, historical data, and adjustments for anomalies and conservation savings. See www.bpa.org for more information.