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Okanogan County Electric:
The Co-op That Dared to Change

Door prizes and pie used to be what attracted members of the Okanogan County Electric Cooperative (OCEC) to its annual meeting. Interest in OCEC activities was tepid at best and OCEC often struggled to get the required five percent of approximately 3,500 member-owners of OCEC to vote in annual board of directors elections.

But at the April 2010 meeting about 400 people, motivated by a simmering controversy, waited up to an hour to cast their ballot.

Craig Boesel, whose seat was up for re-election, was not wholly surprised by the unusual turnout. Boesel served 22 years on the board, the last six as its president. He has, he reckons, a history of over 100 cumulative years serving the community from school board member to president of one of the local water irrigation districts.

"I was taught and my clan was taught, that it is your responsibility,” said Boesel. "If you are going to be part of the community, you give back to that community. And part of that was serving on boards and doing things when people ask you.”  

Boesel’s Methow roots are deep. His forefathers were among the first white settlers to migrate into the area in the late 1800s and geographical features now carry the family name. Boesel left the valley to earn a double degree in education and physical therapy then returned to work as a smokejumper. After 16 years he traded one brand of physical labor for another and became a full-time rancher. His weathered hands reflect a life of outdoor labor.

Those credentials, however, did not withstand the wrath of some OCEC members angered and bewildered by a rate restructuring that occurred under his watch. In an overwhelming vote of no confidence, Boesel along with the two other incumbents were ousted and replaced with candidates fielded by a grass-roots organization, Members for a Democratic Co-op (MDC), that formed shortly after the new rates went into effect.

"As a board member you’re there to do what you believe is best for OCEC and the company. That is what you’re there for. If I had wanted to make my electric rates cheaper, I certainly wouldn’t have voted that rate structure in there,” said Boesel in defense of a decision that quickly polarized public opinion on how OCEC should be doing its business.

Under the old rate structure, in effect since 2001, each residential customer paid a base charge of $29 per month along with a tiered kilowatt-hour use charge: 4.8 cents per kilowatt-hour for the first 1400, 5.8 cents for anything above that.

The new rate structure (approved unanimously by the nine long-time local board members and endorsed by OCEC’s manager at that time, Ray Ellis) raised the base rate to $40 per month and decreased the kilowatt-hour rate to 3.8 cents. Additionally, and most controversially, OCEC introduced a third component, a so-called demand use fee made possible by new meter technology that allows OCEC to measure how much energy a household is drawing at any given moment. The demand use fee is $2.79 per kilowatt for the highest use 15-minute period in each billing cycle.  Initially, the new rate structure required its customers to pay for a five-kilowatt minimum or $13.95 per month, regardless of a household’s demand.

"It’s terribly arbitrary,” pointed out newly-elected board member Ron Perrow about the kilowatt hour demand fee portion of the rate structure. "What is so arbitrary about it is that this 15 minute period will occur at any time, at any 15-minute increment over the billing period.”  

Perrow gave an example of a household that is penalized with a high demand charge simply because several appliances in the house ran simultaneously. "If, however, you would have put the bread in the oven in one 15-minute period, taken a shower in the next 15 minute period, turned on the dryer in the following 15-minute period etc.” explains Perrow, "you would never have had that high level of a demand charge.”

When the first bills under the new rate structure arrived in the mail, many OCEC members were stunned to see that their monthly debt to OCEC had in some cases doubled or even tripled. The sticker shock combined with widespread confusion over the function of the new kilowatt demand fee allowed Members for a Democratic Co-op to galvanize support for its platform.

One Valley, Two Utilities

In the 1930s, a time when most populous American cities enjoyed the innovations made possible by the likes of Ben Franklin and Thomas Edison, many inhabitants of the remote Methow Valley had limited access to the luxuries of electricity. The investor-owned utilities that more or less controlled access to the grid saw no financial advantage in electrifying sparsely populated areas.  

According to local historian and long-time resident Carl Miller, the town of Winthrop managed to generate a small amount of power for its residents by tapping into the flow of an irrigation ditch to turn a small generator.

"When old man White would get through milking his cows at night or in the morning,” relates Miller, half winking,  "he turned them out of the barn. They’d go over to the ditch, drink a big swig of water and all the lights in Winthrop would dim.”  

A more reliable system for Winthrop became feasible when President Franklin Roosevelt signed the Rural Electrification Act into law in 1936. His pen stroke paved the way for public utility districts and private, member-owned, not-for-profit electric cooperatives such as OCEC to secure government-backed loans to build infrastructure for rural areas neglected by profit-driven electric companies.  

In 1939 the newly-formed OCEC obtained a $69,000 loan through the Rural Electrification Act and began servicing its first member-owners.  Around the same time, the Okanogan Public Utility District (PUD) entered the Methow Valley. Originally formed to provide electrical service to the folks living in the neighboring and more populous Okanogan Valley, the PUD extended its reach into the Methow by acquiring a generation station from Washington Water Power, a privately run company that had profitably sold electricity since 1928 to a concentrated, easily accessible segment of the Methow’s population, centered around the town of Twisp.

Seventy years later, the Okanogan PUD and OCEC each service about half of the 7,500 electric meters spinning in the Methow Valley and share a common transmission line into the area. PUD provides power for the lower part of the valley, covering the most populous town of Twisp, while OCEC tends to the needs of the upper Methow valley, including the Twisp and upper Methow river valleys and their numerous drainages.

Historically, the PUD has been able to provide its customers with much lower rates, leaving many OCEC members--especially those who live immediately along the line of demarcation--to wonder why their PUD-supplied neighbors pay significantly less.

According to the Okanogan PUD the discrepancy stems from a couple of factors. Compared to OCEC the Okanogan PUD has more customers per mile of transmission line. That translates into higher revenue per dollar spent on line upkeep. The PUD also generates some of its own electricity through leases on private dams, further reducing costs.

MDC members are interested in the possibility of a marriage between the two utilities as a means to rein in cost for OCEC members.

It’s likely, though, that this effort will be thwarted by the same circumstances that produced two electric companies in one small valley in the beginning. Essentially, it just is not financially worth it for the PUD to take on a partnership with OCEC, a utility that is ultimately more costly to run.

"The electric co-op has never turned down an offer from the PUD to be bought out,” said Craig Boesel when explaining why OCEC hasn’t merged with the Okanogan Public Utility District.

Nonetheless, comparison shopping has stretched beyond the Okanogan PUD to other co-ops and PUDs inside and outside of Washington State and that has further fueled the battle cry of MDC. They believe firmly that OCEC is out of line with its price structuring and needs to readjust accordingly to look more like all the other co-ops.

Co-Op Finances, 101

Budgeting for any electric utility is a complicated juggling act.  The cost of power fluctuates daily, subject to both subtle and momentous events on a regional, national and even global level. Weather, for example, has a huge impact on the fickle laws of supply and demand of electricity. In the Pacific Northwest, where hydro-power reigns, not only does a huge snow year plant smiles on the faces of skiers and irrigators alike, it maximizes the generating capabilities of the many dams that dot its waterways.

OCEC is a not-for-profit, member-owned private utility company with a unique business model. Its governing rules, reinforced by the expectations of its creditors, require it to end each fiscal year with an acceptable balance between debt and equity. OCEC sets a ballpark figure for the margin required to meet this debt/equity ratio. OCEC also pays its members a small percentage of surplus funds each year in the form of capital credits. All the surplus money technically belongs to its members, but OCEC retains some as working capital or equity to reduce money borrowing.

OCEC buys the majority of its energy from the Bonneville Power Administration (BPA). BPA is the government agency tasked to market the power produced by the 31 dams and one nuclear power plant strung out along the Columbia River, collectively known as the Federal Columbia River System. BPA is obligated to sell this power at cost, or wholesale, to the 138 public utilities and co-ops located in Montana, Idaho, Oregon and Washington, which are its preferred customers under federal law. BPA sets rates according to a projected revenue stream it needs to administer and operate its generation and distribution infrastructure. This includes the annual money it owes the United States Treasury in debt and interest.  BPA is one of very few government agencies that stay afloat without taxpayer assistance.

In the past, BPA has been able to offset its pricing by selling any excess energy it produces on the open market, helping to drive down the wholesale cost to the PUDs and co-ops. More recently, increased demand for energy from the preferred customers has begun to outgrow the generating capacity of the Federal Columbia River System. In response, BPA set 2010 as a quasi-baseline year. The amount of power each of its preferred utilities and co-ops used during that year has determined what percentage of its output each will receive in the future at wholesale price, also known as the Tier 1 price. Above that baseline amount, referred to as the high water mark or Tier 2, the preferred utility must either secure the power for itself on the open market or allow BPA to secure it, almost always at a much higher cost.

To improve its bargaining capabilities, flexibility and knowledge base in a complex industry, OCEC aligned itself in 2001 with a consortium of 15 other co-ops, collectively referred to as the Pacific Northwest Generating Cooperative. Based in Portland, Oregon, this group has a hired staff of experts in the field of energy on both the national and regional level. OCEC pays a fee for membership, but past OCEC manager Ray Ellis emphasized that this expense has paid for itself numerous times through the savings made possible by the Pacific Northwest Generating Cooperative’s expertise, clout and leveraging capabilities.

Although the price OCEC paid for energy from BPA had continuously risen since 2001, the old board had been hesitant to pass the cost off onto the membership. "We decided that we didn’t want to raise the rates before we had to,” explained Craig Boesel. "We had prided ourselves in trying to keep cutting back and making it leaner.”  

Labor costs covered by line extensions to new customers partially absorbed the price increases from BPA and the ten-year contract OCEC entered into with Bonneville through the Pacific Northwest Generating Cooperative, beginning in 2001, allowed OCEC to create income from a form of speculation. Through this contract OCEC would buy a portion of its power as a block, another portion as a so-called slice. In simplistic terms, a block is a fixed amount of power that OCEC knows it will require 24 hours per day for every day of the year. A slice is a percentage of extra power that BPA generates, something that normally happens in good water years. BPA sells both block and slice products based on a fluctuating price, set by the constant evaluation of its own revenue needs.  The advantage to OCEC is its ability to turn around and sell, on the open market, any slice power it has leftover after meeting its own needs.

Similar to how BPA attempts to keep its wholesale prices for preferred customers down by selling excess power on the open market at competitive rates when it can, the Pacific Northwest Generating Cooperative can reduce the cost of power for its co-op members by selling off excess slice.  The gamble is, however, that a bad water year or a depressed market can eliminate the possibility of slice as an income-generating tool.

2009 was a bad water year and an even worse year for the market. The downturn of the national economy reverberated in the Methow Valley. Line construction was down. What little slice OCEC had available to sell on the open market, no one was buying. Industry (the nation’s biggest power consumers) was using less power and BPA struggled to maintain its required revenue stream. It had to resort to a provision in its contracts with preferred customers called the Cost Recovery Adjustment Clause. Because of this clause, OCEC received retroactive price increases from BPA for previous months of electricity that OCEC had already paid for. 

Facing a budget shortfall around $180,000, the OCEC board, according to Ellis, opted to raise rates rather than turn to their creditors to cover wholesale power costs. "You don’t borrow money to buy groceries,” explained Ellis of the board's rationale.

Preparation for the inevitability of a rate increase had already begun. The OCEC board had previously contracted for the Pacific Northwest Generating Cooperative to perform a cost of service analysis to help design a new rate structure that would fairly divvy up the costs among the membership. After reviewing the analysis and consulting guidelines put forth by the National Rural Electric Co-Op Association the board followed recommendations presented to it.

"We believed the new rate structure was going to be the rate structure of the future,” Boesel stresses. "The numbers would move around until they were what they should have been, potentially. We came up with something that gave us the revenue we needed to make budget and what we thought was the fairest to all our member-customers in that they were paying what they were costing the electric co-op.”

A big part of accomplishing this goal lay in the introduction of a demand charge for kilowatts.

Kilowatts versus Kilowatt-hours

The standard practice of investor-owned utilities, public utility districts and electric co-ops in the United States is to charge residential customers a certain amount for each kilowatt-hour consumed.  

One kilowatt-hour equals 1000 watt-hours. A 100 watt light bulb on for 10 hours uses one kilowatt as does a 1000-watt heater running for one hour. A kilowatt-hour is a measure of how much electricity you use. Generally, the more you use, the more you pay.

A kilowatt (1000 watts), on the other hand, is a measure of how much electricity you use at any particular moment – your electrical demand. When you turn on a 100 watt lightbulb, you are demanding 100 watts regardless of how long the light stays on. Turn on the lightbulb and the 1000 watt heater and your demand is 1100 watts. Your electric provider must have the infrastructure in place - big enough wires, transformers, switches, etc. - to handle that demand. That's called load capacity.

The larger the load capacity, the higher the cost.

"The entire system,” explained Ellis, "the generation, transmission and distribution system is actually built to handle kilowatts, not kilowatt-hours. And so we build all these systems to handle kilowatts but try to recover costs with the kilowatt-hours."

Conservation efforts also revolve largely around reducing kilowatt-hour use. It’s a slippery slope for a business such as OCEC. Paradoxically, the more its members conserve, the less revenue it takes in. One way for OCEC to encourage conservation while maintaining its revenue is to decouple rates - separate the fixed costs of operation from the energy costs (what it pays BPA for electricity). Since almost its inception OCEC has done that, at least in part, by charging a flat, monthly fee as part of its rate structure.

Adding a demand charge to its rate structure allowed OCEC to increase revenue for covering its fixed costs and the money it spends building its system to theoretical capacity. The demand charge advances the idea, according to Ellis, that true conservation is not only about how much energy you use, but also how you use that energy.

The OCEC rate "actually encourages people to reduce their kilowatts (demand) and increase their kilowatt-hours (use) so that you get closer to a 100% load factor,” explained Ellis, admitting that this concept might make some people’s hair rise. "When you do that, you’re actually using your energy very efficiently. You’re using it 24 hours a day, but at much smaller levels. The rate that (OCEC) has tries to promote that, at least that conversation.”   

Not everyone believes that efficiency is as important or even has any relationship to the principles of conservation.  Ellis acknowledged the difficulty in asking people to rewire their thinking. "The truth of the matter is that we think energy conservation only stems around shutting your lights off. And that’s only half of the equation. The other half of the equation is trying to find a way to trim down the amount of peak capacity that we’re constantly having to build into the transmission, generation and distribution systems around the country. Unless our members know that capacity is as big an issue as kilowatt hours, they’re never going to change their habits.” Big commercial users have typically assumed a large portion of the expense of building and maintaining the necessary capacity of utility companies. The tools, equipment and machinery used by industry; the large scale heating, cooling and lighting of retail and office spaces place a much larger demand on an electrical system than the typical residential customer. Consequently, most electric companies have charged their commercial users, those who actually place the most demand on the system, a kilowatt demand fee – a fee they waive for their residential customers. Using industry to pay for the capacity of the system has worked well in areas where there is, in fact, industry.

The Methow Valley, however, has no broad base of industry. OCEC has ten accounts on its books, four belonging to the school system, which it categorizes as large commercial. They all barely meet the requirement.

Due to the lack of industry and the unique make-up of its membership, the old co-op board felt that adding a kilowatt demand charge to its rate structure, in addition to the flat rate fee, was an appropriate way to equitably divide the fixed costs among all its users. 

Demographic Difference

In the 1970s, attempting to boost the local economy which had begun to sag heavily with the decline of mining and logging, Winthrop reinvented itself.  A few locals came up with a plan to rally for tourist dollars by transforming the town into a Western-themed attraction, complete with board walks, false store fronts and boutiques with hand painted signs. The makeover began around the same time that the scenic, seasonal North Cascades Highway opened in 1972, connecting the populous west side of the state with the tranquil Methow Valley.

The Methow Valley quickly assumed a new role as a gateway to the natural beauty and recreational opportunities surrounding it, becoming a popular tourist destination for outdoor enthusiasts. The per-capita number of restaurants and coffee shops raced upwards. Music and the arts flourished. Outsiders brought in money to build retirement and second homes, creating demand for local jobs in construction and the service industry. It is a familiar story that has been repeated in many remote, bucolic Western communities. The consequences of the demographic shift go beyond steeply rising real estate prices and a citizenry now as likely to be clad in Lycra as Carhartt.

More than 40% of OCEC members are seasonal or second home owners, and the figure is expected to grow. Phrasing the heart of the problem, Ray Ellis explained: "We can’t collect enough revenue out of the kilowatt-hours to pay for the impact that they have on our system.”

Erecting new power poles and stringing lines over long distances is an expensive endeavor. A small part of that cost is recovered in fees charged directly to the new customers. Adding the additional capacity to the system - the infrastructure, operation and maintenance costs - is largely OCEC’s burden.

Ellis estimated that OCEC requires just over one million dollars a year to pay for the extra system capacity needed to meet the demand that would be placed on it if every one of their members turned on all their electrical appliances at once. That's in addition to the other fixed costs OCEC assumes for operation and maintenance. Referred to as the Christmas or New Year’s Day load -- times when the largest kilowatt demand from OCEC members generally occurs -- OCEC is obligated to have a system that can handle this theoretical load. Theory turned to cold reality this past winter when power outages occurred several times on one of OCEC’s feeder lines due to demand outpacing capacity.

When paying for that capacity under the old rate structure, the year-round residents shouldered an unfair proportion of the burden, said Ellis.

Whether or not it’s the seldom-occupied dwellings that have forced OCEC to build additional capacity into its system the past 15 years, every household serviced by OCEC has demand potential. That potential is particularly high in an area where natural gas is not an option for running major appliances.

People have understandably outfitted their homes to run off of what has traditionally been the least expensive resource at hand, electricity.  Electric furnaces, baseboards, water heaters and stoves along with the buffet of modern day technological gadgets not only add up to more and more demand on the system, but differing demand, depending on how and when a household uses its appliances.

The kilowatt demand fee, said Ellis, is intended to charge people proportionally to the amount of demand they place on the system. It is a means for covering a portion of the fixed costs of the system, and not the actual energy costs of buying electricity from BPA.

This is a point that has not been easily understood or accepted by OCEC’s customers.

Part of the frustration many OCEC members, represented by MDC, have expressed over the demand charge stems from the fact that it is based on their personal peak demand, whenever that 15 minute period occurs in a month. It is not linked to when OCEC experiences its peak demand system-wide, the time when OCEC then pays BPA higher energy prices.

Paul Taylor, one of the three MDC champions in last year’s elections, emphasizes: "OCEC has predictable peaks of when it experiences its peak load as a system. To me it makes no sense to ding people, to charge them for the maximum power they are using if that maximum power does not occur during our peak load time.”

The intent of OCEC was not to cover the cost of electricity, but to cover the costs of the needed infrastructure for the demand of that electricity, whenever it is used, according to Ellis.

Paul Taylor and other supporters of MDC don’t seem to be buy the argument. They insist that a better way to handle the demand placed on the system would be, for example, to charge customers based on a time-of-use model. Here the kilowatt-hour rate a customer is charged varies, depending on the hour of the day. During times of traditional peak usage, normally between 7 and 9 a.m. and again between 5 and 7 p.m., members would be charged a higher kilowatt-hour for any electrical use.   

MDC’s aggravation with the kilowatt demand charge extends to a customer’s inability to control it. Managing how much kilowatt demand you have in your highest 15-minute period in the month is not as easy as managing how many kilowatt-hours you use. It can prove to be especially burdensome for working families who are limited to certain hours of the day during which they need to simultaneously perform specific energy-intensive tasks. Families who can not afford to adequately insulate their homes and rely on electric heating or cooling are equally subjected to the likelihood of a higher than average demand charge.

Like the automated metering instruments that allow OCEC to monitor its members’ kilowatt demand at any given moment, there is technology available--known generically as an energy sentry--that can help homeowners control their kilowatt demand. Wired to the major appliances in a home, an energy sentry allows the homeowner to set their kilowatt demand at a defined level.  It decides when and how long, for example, water is heated or the furnace runs, alternating so that no two energy-intensive appliances demand kilowatts at the same time.

Not only does Paul Taylor believe the demand charge to be unnecessary bordering ridiculous for residential customers, he asserts that if OCEC is indeed intent on controlling demand, there are better, cheaper products on the market that would satisfy this goal. Furthermore, he said, once people are able to bring down their kilowatt demand, they will in essence be robbing OCEC of some revenue which would then have to still be collected elsewhere.

OCEC was testing a couple energy sentry units (brand name-Brayden) and had planned to test 20 more, ultimately hoping to take advantage of Department of Energy grant money for defraying the coast of installing the units in all members’ homes and businesses. A consulting firm hired to evaluate the effectiveness of the Brayden units determined that they would be minimally useful on several levels for OCEC. The new OCEC board voted down the plan.

The Philosophical Divide

MDC’s opposition to a kilowatt demand charge is only part of the disconnect between it and the original OCEC board members. The disagreement is, in part, over how OCEC should be charging its members.

The standard rate structure for co-ops across the country is some variation of balancing the kilowatt-hour charge with a monthly base charge. Generally, the lower the kilowatt-hour rate the higher the monthly base rate and vice versa.

The old OCEC board chose the first scenario for its customers. At 3.8 cents, OCEC has one of the lowest kilowatt-hour rates in the nation. This rate does, in fact, reflect fairly accurately the amount that OCEC pays for the electricity it acquires from BPA and is not artificially suppressed. At the same time, the board instituted a monthly base rate that is higher than average for co-ops in the state of Washington. This combination, along with the addition of a kilowatt demand charge, was consciously chosen to ensure that every member of OCEC pays equally to have power delivered to their door, regardless of how much is then used.

MDC members however, believe that OCEC has taken its approach to an extreme, ignoring the standard conventions of how rates are normally structured at other co-ops.

"What MDC is advocating,” according to Paul Taylor, "is an approach that’s balanced. Some of the operating costs of OCEC are recovered through the kilowatt-hour rate, in other words based on how much people use power. And part of it is based on the base rate which is spread equally across the members. That’s the model that’s used at virtually every other co-op and utility in the country.”

Engineering the rate structure in this fashion would essentially shift some of the burden of paying for the operating costs of OCEC onto those that use more electricity. MDC also emphasizes the need for a higher kilowatt-hour rate in order to encourage conservation among its members.

Those who don’t use a lot of electricity, such as the seasonal or second home owner, are probably going to prefer the rate structure that MDC advocates. The battle lines are murky, though. It’s not just the "west-siders” trekking over the mountains for a weekend getaway who are upset at the current rate structuring. MDC treasurer, Marlene Firth, claims that the approximately 40 core members of their organization are all year-round residents. They share the sentiment that OCEC acted inappropriately when it instituted what it deems a radical change to the rate structure without consulting the membership.

The Tenets of a Co-Op

As its name suggests the impetus behind MDC arose partially from the group’s perception that the old OCEC board was operating in a less than democratic manner, thrusting its will upon the members of OCEC without their consent.

"If you’re going to make a major decision that’s going to be a big change from what you’ve done in the past, you need to actively involve the membership. You need to consult with them,” says Paul Taylor, referring to one of the seven tenets, also known as the Rochdale principles, under which co-ops operate:  democratic member control.  

The old board members’ interpretation of this idea has been heavily criticized. A few disgruntled voices have publicly vilified these men, painting them as a posse of good ol‘ boys. If the men occupying the seats of the pre-MDC board can be accused of an old-school mentality, believes ousted former board president Craig Boesel, it might be their belief that as the elected representation of folks in a small valley where they grew up, raised their own families and made their livelihoods, a valley where at one time everyone knew their neighbors and helped each other out, people would trust them to make sound, legitimate decisions about running OCEC.  

"I really have faith in those directors that were there, says Craig Boesel of his co-workers during his tenure. "They were trying to be honest and fair and do a good job and there was no reason for them to do anything less.”

MDC, however, rejects the notion that the actions and decisions of OCEC should happen solely carte blanche, behind boardroom doors. The group is interested in redefining the role of co-op members, pushing for a more participatory system that extends beyond a yearly vote. They got a coup for their agenda last September when co-op members received a questionnaire in the mail.  Designed to solicit opinions of the membership regarding their philosophical viewpoints on the various aspects of rate structuring, 67% of the respondents indicated that they would like to see the kilowatt demand charge eliminated. The neutrality of the survey is dubious, however. Authored by two of the new MDC members, the wording used clearly reflected a bias. Not surprisingly, the old board members rejected the results, contending that only one-third of the surveys sent out were actually returned which couldn’t be considered an adequate representation of the membership.

Stumbling Into the Future

The awkward dance between the different beliefs continues, mirrored frequently by opinions in the editorial pages of the local paper and in on-line postings where the input supporting either side has ranged from thoughtful, considerate dialogue to rants, raves and personal attacks.

In its campaign last April to get three new board members elected, MDC ran advertisements under the slogan "Vote for Change.” The theme suggests how some view the dynamics between long-time board members and new MDC-backed board members. It’s a rendition of the age-old tale of old guard versus new guard. But this might be a case of the old guard taking a progressive, unprecedented path while the some of the new guard, championed by MDC, is hanging on to the status quo, promoting the idea that what everyone else is doing is what OCEC should be doing.   

"Everywhere I go, every general manager I talk to, every CFO and industry expert, tells me that what we have as a rate structure is the right thing,” said Ray Ellis, defending the addition of a kilowatt demand charge. "But nobody wants to take that step. The industry is just scared to death to try and change people’s mindset on what energy is.”

MDC fielded three more candidates to run against the incumbents, hoping to tip the majority on the board to favor their agenda. But members elected only one of their candidates leaving MDC in the minority.

Now the board is tackling the pressing task of hiring a new co-op manager. After 25 years working for OCEC, Ray Ellis, who rose up through the ranks from lineman to take its helm for five years, has moved to a job with another co-op in Montana. His departure is due largely to stress and frustration over the discord and polarization that currently characterizes the boardroom at OCEC.

A September 19 phone call to the OCEC office asking if a new manager had been hired drew this response from the front desk attendant, who went into interim manager Doug Adams’ office to ask what to say:  "They’re not willing to disclose that information at this time.”

No one expects that electricity is going to get any cheaper. In fact, it could get astronomically more expensive for co-ops that rely on the Bonneville Power Administration for power. During the budgeting process for fiscal year 2006, the Bush administration proposed forcing BPA into increasing its pricing to match free market levels as a means to raise revenue. Although opposition led by Pacific Northwest legislators ultimately squashed this effort, current efforts to reign in the budget deficit, could renew the idea of turning BPA into a moneymaking entity. This would have drastic consequences for OCEC and other co-ops that rely on BPA. Furthermore, the cost of upgrades to BPA’s infrastructure, as well as efforts to protect endangered fish species and develop non-hydro, renewable energy have made price increases a consistent trend.  

Not all visionaries are celebrated heroes in their time. History may recognize or discredit the efforts of Ray Ellis, Craig Boesel and their peers to financially secure OCEC in what they deemed to be the most equitable way possible.  Reflecting on his departure from the board and the nature of the democratic process, Boesel remarks:

"I would say, in all fairness, the majority of the community who voted spoke as to who they wanted as directors, and that’s who they should have. They believe this will lead them to a co-op they are happy with."

Whether happiness will equate with long-term robustness and viability remains to be seen. Although the controversy at OCEC has been painfully divisive for the community, it has ultimately fostered an acute awareness and interest among its members about the issues surrounding electricity use, capacity and conservation. The Methow Valley is becoming home to some of the most savvy energy consumers in the nation.

posted 09/20/2011

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