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About The independent. (Vernonia, Or.) 1986-current | View Entire Issue (July 18, 2012)
The INDEPENDENT, July 18, 2012 Page 13 Power of the People By W. Marc Farmer, General Manager, West Oregon Electric Cooperative Response to Open Letter I appreciated the editorial let- ter in the last issue and the op- portunity it provides me to re- spond to some excellent ques- tions and comments by Mr. Phillips. It is always helpful when people take the positive approach to be part of the solution, rather than part of the problem. I will endeavor to cover all the aspects of his letter in this article. Further expansion of some points will be in additional articles due to space con- straints, but I will start here point by point. 1) We ARE a “cooperative” and continue to function as one. The member-elected Board of Directors pro- vides direction for the management staff through its strategic planning process, policies, by-laws, service rules and regulations, seven cooperative principles, and budget process. My staff and my responsibilities are to manage the operations of the cooperative with- in these parameters. We report monthly to the Board at our meetings, which are open to our members to at- tend. We do not operate in any form like a private business enterprise. In fact the Board and Manage- ment Staff just completed a day-and-a- half strategic planning session the end of June. 2) As to the profit-based aspect, we are a not-for- profit, member owned and operated public utility that assigns its margins, if any, back to the membership in the form of capital credits. These credits are accrued and remain assigned to each member. Because we keep our costs and margins at such a minimal level, when we do have margins we have invested them back into our electric system. This actually helps to keep our rates down. If we paid the capital credits back to the members annually, instead of reinvesting them back into the system, our rates would need to be higher to cover our system costs. West Oregon Elec- tric does not have any volatile investments. 3) We do work with BPA through an organization called Pacific Northwest Generating Cooperative (PNGC). We, along with 14 other utilities are working on several fronts. We already collectively own a facil- ity called Coffin Butte, which uses methane gas from a landfill in the Corvallis area to produce power. We participated in the initial R&D for a wave energy proj- ect which will launch its first buoy later this year for testing. Other PNGC projects include a solar project in Eugene, and we meet monthly to discuss other alter- natives including geothermal, wind, and bio-mass. BPA, which is our wholesale power supplier, provides us with power from hydro and nuclear in Tier 1, and has wind, solar, geothermal, natural gas, and bio- mass options available in their Tier 2 portfolio. The challenge of renewable energy is the cost. Hydro over the dam runs about $30 to $35 per megawatt hour. Wind and solar run to three times that amount de- pending on the level of subsidies from the govern- ment. If you think rates are high now, see what hap- pens when the power costs are doubled or tripled for renewable energy. The fact that the sun shines and the wind blows part of the time for free is fine, but the cost to produce power from them is not free, it is very costly, and do not currently have the technology to store large amounts of it for the times the sun isn’t shining and the wind isn’t blowing. 4) I like the possibility of additional hydro. The first key here is to get hydro on both the state and federal levels to be declared “renewable energy.” Our current Governor is opposed to dams and reluctant therefore to support this move. We will press on. The federal op- position to more hydro is evident in the over-priced cost to acquire a FERC permit license to build any hy- dro. I’d like to see us put power generation on Hagg Lake dam and Fishhawk Lake dam which are already in existence, and to build hydro power dams on Rock Creek, and the Nehalem River. Dams on Rock Creek and the Nehalem could then also help address the flooding issue at the same time that they are produc- ing power. The other problem with pursuing this comes down once again to costs. Our rates would have to increase dramatically to take on the expense of power generation and transmission. 5) We have actually done an analysis of placing so- lar panels on our HQ roof. The cost to do so would be $233,566.80. This breaks down to a cost of $59.19 per member to purchase and install the system. We have not felt that this is an expense our members are prepared to make at this time. Once we complete the system upgrades (substation projects, line under- grounding, tree trimming for example) that keep the lights on, then we can revisit this project. Good sug- gestion and one we have on our radar screen. 6) We have already had discussions with a couple of banks on offering low interest loans for energy effi- ciency measures and have partnered with Wauna Federal Credit Union to offer Energy Efficient Home Improvement Loans. We are participating with Sena- tor Merkley to support his bill to make federal funds available for additional low interest loans for conser- vation and energy efficiency measures in our mem- bers’ homes and will communicate when this be- comes available. We have been offering rebate pro- grams for years in partnership with BPA and PNGC for energy efficiency. We do not offer rebates for alternate energy at this time. Our members are already financ- ing them through their taxes, which support tax breaks and incentives for alternate energy. To do so again through o u r rates would be dou- ble dip- ping at a time t h e y c a n least af- ford it. It is also difficult to justify all of t h e mem- b e r s subsi- dizing a benefit for a few that u l t i - mately ends up increas- ing their propor- tionate share of maintaining and operating the system. 7) We used to hire our own tree crews and com- pared the cost with contracting the work out and found significant savings in hiring contractors. Not only did we save money, but also time to manage the vehicles, personnel, equipment, and insurance. We have had local people hired onto the contract crews so we have been able to accomplish providing jobs for local peo- ple as well as saving substantial money at the same time. 8) We already cut trees on our right of ways to the extent allowed by law. We are allowed a 40 foot right of way (20 feet on each side). We are allowed to take “danger” trees outside the right of way if they pose a potential danger to the line. Unfortunately we do not have right of ways the size of BPA (300 foot) or we could easily eliminate most of our outage problems. Even though we do have a right of way on our lines, the trees belong to the property owners and we have to obtain permission from them to trim or cut trees on their property. We have found from experience that permissions don’t come easy until a tree takes out their power, then they are more willing to let us do the trimming or cutting we need to avoid future outages. We work with private property owners and timber companies as much as possible now. That all being said, we are not, nor intend to be in the logging busi- ness, nor is it safe or practical to allow those who are not qualified journeyman linemen to work around en- ergized lines. What would be helpful would be enough funds to both increase the number of tree crews we have and/or to be able to afford undergrounding more lines, especially in heavily timbered areas. As for the chips, we currently give them to members for free. There is a chip request form available in the WOEC front office and we have a standing order for 25 peo- ple already on file. We try to deliver chips to the mem- bers whenever we are in their part of our service area. 9) We send one person once per year to go to Washington, D.C., in a coordinated group effort with Please see page 18