Two incumbent board members up for re-election
By Marcy Stamper
There will be a special focus on wildfire at the Okanogan County Electric Co-operative (OCEC) annual meeting on Monday (April 19) at 7 p.m., which will be held virtually on Zoom.
Two incumbent board members are running unopposed for their seats.
At the top of the OCEC board’s agenda is hiring a new general manager to replace David Gottula, who is retiring this summer.
The co-op has other issues on its plate, including:
• residential growth in its service area.
• impacts of climate change on energy usage and sources of power.
• expiration of OCEC’s contract with the Bonneville Power Administration in 2028.
• wildfire.
The annual meeting will feature four speakers on “The Power of Wildfire Preparedness, OCEC’s Wildfire Mitigation Efforts.” Speakers are Susan Prichard, a Winthrop-based forest ecologist with the University of Washington who specializes in the effects of wildfire; Michael Liu, Okanogan forest lead for Conservation Northwest and former Methow Valley District Ranger; Sam Israel, a contract forester and the public lands coordinator for the Methow Valley Citizens Council; and Gottula.
The panel will provide details about OCEC’s Firewise fire-mitigation program.
The link and phone number to join the meeting will be at www.ocec.coop. For more information, call 996-2228.
Board candidates
OCEC board incumbents Alan Watson and Michael Murray responded to questions from the Methow Valley News about current issues for OCEC. Terms are for three years.
Answers had to be condensed for space. Complete responses are available online at www.methowvalleynews.com.
Alan Watson
Please provide a brief biography, including professional background and a brief personal profile. What part of your experience is most relevant to your position on the OCEC board, and what strengths do you bring to the board?
I grew up in Seattle and enjoyed family camping trips in the Methow, including camping at Washington Pass before the highway was built. I have worked as a field biologist, a high school science teacher, a ski coach, and a certified public accountant.
I have a bachelor’s degree from Harvard and an MBA from the University of Utah. In 2011, I retired from my accounting career and moved to the Methow Valley full time.
Other boards I’ve served on include Methow Trails, the Methow Valley Nordic Ski Education Foundation, and the Pacific Northwest Ski Association.
My wife, Karen, and I feel unbelievably lucky and grateful to be living here in such a magnificent physical setting and to be part of such a wonderful community.
I would identify two strengths that my background has given me. First, working in public accounting gives me some skills to evaluate OCEC’s financial situation, including both current results and future planning, as well as experience in many of the ways businesses tend to drift into suboptimal practices. Second, during my six years on the board I have learned a lot about how OCEC, the Bonneville Power Administration (BPA), and the broader electricity industry operate.
I believe that my fundamental responsibility as a board member is to help ensure that the co-op continues to provide us with reliable electricity and good service at reasonable rates. We need to make sure that our operations and finances are healthy and sustainable, that costs are kept under control, and that we do not adopt policies that favor one group of members over another.
The electricity business is changing, with a shift away from fossil-fuel generation to cleaner but possibly less reliable energy sources, and movement toward greater electrification, including a likely shift to electric vehicles. I believe we need knowledge and good judgment to anticipate and navigate the strategic choices that are coming to us. We need to be careful about risking our members’ equity on new projects, but at the same time we need to be imaginative and proactive adapting to the future.
How long have you served on the OCEC board?
I was initially appointed to the OCEC board in the fall of 2015 to replace a board member who took a new job out of town. I am currently treasurer and chair of the finance committee.
What are the three major issues for OCEC?
- Controlling costs and making sure that OCEC makes the right choices so that we can continue to provide reliable energy and good service at reasonable rates. We need to avoid taking on unproductive or misguided projects, but also need to proactively engage in projects that will be necessary to best serve our members as the valley and the electricity business continue to change.
- Deciding on our power supply after September 30, 2028, when our contract with BPA expires. We don’t know yet what sort of contracts BPA will offer then, and we need to consider whether we would be better off with other sources of energy, either in addition to or instead of BPA.
- Dealing with the massive changes the electricity industry is going through. These include a shift in generation from dirty but reliable sources to clean but intermittent ones, the consequent need for much more storage, the likely increase in demand as electric vehicle use increases, the increasing risk of periodic shortages leading to blackouts, and new legal requirements like the Washington Clean Energy Transformation Act (CETA).
What projects or initiatives would you like to continue or accomplish in your next term? What will be necessary to achieve them?
With David Gottula’s retirement we will have a new general manager starting July 1, 2021. Establishing a good working relationship between the board and the new general manager is critical. This will require open and honest communication as well as realistic understanding of our situation, challenges and options.
Although our BPA contract will not expire for seven and a half years, we will need to make commitments well before that or risk losing our options. We have begun exploring alternative strategies, and we will need to continue those efforts energetically. Much of the burden will be on the general manager, but board support and involvement in that process will be essential.
We need to be sure our distribution system stays healthy and adequate. Depending on growth in demand, our Mazama line might be the first to need a significant upgrade. We have been replacing transformers in order to increase the line voltage, but we need to continue to monitor the growth in use in case we need to bring the project to completion quickly.
We have several ongoing projects that we hope to bring to completion soon, including policies for electric vehicle charging and fire-safety power shutoffs. These require continued discussion and evaluation of costs and benefits.
I am very interested in demand management, including time-of-day pricing to encourage less electricity use when demand on the system is at a peak, and more use during overall low-use hours. Unfortunately the price signals we get from BPA are not very helpful for us to know in real time when the system peaks are, so we are not doing much in this area yet. But I want to be ready when we do get better signals from our electricity sources.
What steps, if any, should OCEC take to better prepare the Methow Valley for a changing climate?
We should focus on providing our members with what they want and need, including additional resources for charging electric vehicles as they become more popular, and on compliance with relevant climate-related legislation like Washington Clean Energy Transformation Act. To the extent that a changing climate results in increased risks of wildfire or of reduced hydropower generation, we need to anticipate and prepare for those possibilities, most of which we are already doing, at least to some extent.
Should OCEC consider a different rate structure to encourage energy conservation? If so, what would you propose?
I am interested in a time-of-use rate structure, not so much to conserve energy as to dampen and spread out peak usage. If OCEC’s peak use coincides with regional peak use, that additionally stresses the generation system and BPA charges us a premium for the electricity we buy from them.
How do you keep energy costs fair for people who face a larger financial impact from electricity costs because they don’t have well-insulated homes?
OCEC works with several community organizations, including Okanogan County Community Action, The Cove, and Room One, whose focus is on helping those in need. They in turn can tap into government programs like LIHEAP (Low Income Home Energy Assistance Program).
Should OCEC have a role in promoting electric vehicles (EVs) by investing in charging stations or other infrastructure?
I do not favor OCEC subsidizing EV owners because that ends up being a transfer of wealth from all members to our better-off members. I do favor spending that has a positive return to OCEC. For example we could provide a discount on Level 2 chargers (240 volt) if they allowed OCEC to control or at least nudge charging times away from peak usage and thus lower OCEC’s cost of electricity from BPA. We currently have an EV policy task force looking at what the optimum policy would be. If OCEC were to invest in Level 3 (direct current, fast charge) stations, I worry that we would discourage others from doing the same because they would have to buy electricity from OCEC and thus be at a possible competitive disadvantage.
What’s the status of solar power at OCEC? Is there an opportunity to increase the power derived from solar?
OCEC has an array of solar panels behind the office on Chewuch Road. In addition, there is at least once community solar project in the valley, and a number of individual solar panels. Combined, they produce less than 1% of OCEC’s electricity sales.
OCEC supports net metering, at least to the extent required by state law, in which OCEC buys electricity generated by solar panels and sent into the grid at the retail price of electricity. The goal of the program is to encourage members to install solar panels, but one negative effect, at least if net metering participation were to grow significantly, is that a net-metering member who sends as much electricity into the grid when the sun is out as he or she takes from the grid when the sun is not shining uses the distribution system without paying anything toward maintaining it.
In the bigger picture, it is not clear whether we would use our resources more effectively to generate solar energy locally than to generate it under better climate conditions and transmit it into our area.
Is OCEC’s network adequate for current build-out and for the increased pace of growth in the Methow Valley? Can the network handle high demand on holiday weekends?
So far, our network has been sufficient to maintain voltage and frequency during our highest peak hours, which tend to be cold holiday mornings. Long-time members will remember the controversy a decade ago about the expense necessary to rebuild the Mazama line, which had the least spare capacity. Instead of a rebuild, we are currently modifying the Mazama line to increase its voltage and capacity. How much demand grows will determine when and if a full rebuild will be necessary, but we should be good for quite a few years at least.
Wildfire mitigation will be a focus of the annual meeting. What should OCEC do to be prepared for wildfire and to protect its network and the community from the risk of wildfire?
OCEC has a regular program to manage vegetation along its lines. There are tall trees outside our easements, which means that they pose a risk to our lines, but we cannot remove or trim them without specific landowner permission. The policy to be presented at the annual meeting will describe when and how OCEC will proactively shut off electricity when fire conditions (high wind, low humidity) become severe enough. An important part of the policy will be successful communication to the community in advance of likely shutoffs.
What are your thoughts about OCEC’s propane subsidiary, from both an economic and energy standpoint?
OCEC established its propane subsidiary after an affirmative vote by the members. Many members rely on propane for heating and cooking, and retrofitting those buildings to be all electric would in many cases be very expensive. We owe it to those members to continue to supply propane as long as it is legal and economic to do so. If public policy requires phasing propane out, it should be done over a period of years so as to avoid a sudden large financial challenge to members.
What considerations should be taken into account when the BPA contract comes up for renewal in 2028?
One consideration is how much electricity is likely to cost. We are a BPA preference customer, which means that we get a certain amount of electricity each year at favorable rates. However, BPA can change those rates every other year over the 20-year life of the current contract, which leaves us somewhat exposed. For various reasons, those rates have not been as favorable over the past few years, and there are reasons to fear that BPA’s cost structure will make those rates less competitive in the future.
It is also likely that our BPA allocation will shrink, while our demand will continue to grow. We can buy the electricity we need that is in excess of our preference amount at market rates, but we might also be able to make a long-term commitment to a block of power from another source at lower rates.
We are a member of PNGC (Pacific Northwest Generating Cooperative, a co-op of co-ops), and there is a possibility that PNGC will build or buy generation that we could use independently of BPA.
Michael Murray
Please provide a brief biography, including professional background and a brief personal profile. What part of your experience is most relevant to your position on the OCEC board, and what strengths do you bring to the board?
I’ve been an “electricity nerd” since college and worked in and around the industry for 18 years, primarily in energy efficiency. I currently run Mission:data Coalition (www.missiondata.io), a nonprofit I co-founded that supports state and national policies enabling electricity consumers to better access their energy usage data for conservation purposes.
Prior to founding Mission:data, I co-founded Lucid, an energy-management software company where I served as CEO for 10 years. Lucid created the “Building Dashboard” – a real-time web-based dashboard display of energy consumption in commercial buildings. The Building Dashboard helped universities, school districts and others save 10% to 15% on their energy costs.
One of the most helpful aspects of my experience is my exposure to investor-owned utilities in other parts of the country (I work in 10-plus states each year for my day job); I bring many of their lessons learned to OCEC.
How long have you served on the OCEC board?
Since 2019. My wife and I moved to the valley full-time in 2018.
What are the three major issues for OCEC?
The top issues from my standpoint are wildfire preparedness, our long-term power supply (particularly after the expiration of our Bonneville Power Administration (BPA) contract in 2028), and keeping rates affordable by managing our expenses wisely.
What projects or initiatives would you like to continue or accomplish in your next term? What will be necessary to achieve them?
We began an electric vehicle (EV) committee to investigate and make recommendations to the board about how best to prepare for an increase in EVs, and the opportunities and challenges that could face our members. Although it’s currently in an investigation phase, I would like to see this through to implementation. I also supported helping finance our members’ energy-efficiency retrofits via on-bill repayment with low-interest loans. This program has been very popular in other states and I would like to see OCEC formalize its offering.
What steps, if any, should OCEC take to better prepare the Methow Valley for a changing climate?
So many things! First, preparing for wildfires to lower our risks and proactively assist members with alternatives when the power may, by necessity, be shut off. Second, plan for reduced hydropower resources as climate change (i.e., less snowpack) lowers power output. Third, help members switch to lower-carbon home heating with heat pumps, in order to minimize carbon emissions.
Should OCEC consider a different rate structure to encourage energy conservation? If so, what would you propose?
Many states have experimented with different electricity rate structures to encourage conservation. However, it is extremely difficult to do so fairly, because the energy that is a necessity to one member may be totally optional and discretionary to another. To avoid punitive outcomes, particularly for low-income members, it’s much better to (1) offer a “peak-time rebate,” which incentivizes members to reduce demand on a few days per year when demand is at its highest, helping save money for everyone; and (2) provide resources for members to pursue efficiency upgrades.
How do you keep energy costs fair for people who face a larger financial impact from electricity costs because they don’t have well-insulated homes?
I think the best way to minimize energy costs for those without well-insulated homes is to target efficiency programs to those who need it most.
Should OCEC have a role in promoting electric vehicles (EVs) by investing in charging stations or other infrastructure?
Yes. EV registrations in the valley are increasing at over 40% per year, and if we don’t adequately prepare for EVs, we could be negatively affected by “dumb” chargers that increase our peak demand and therefore total cost to the co-op. However, by intelligently increasing power sales through EVs, we can spread our fixed costs across more energy, thereby putting downward pressure on rates. EVs are the best opportunity to increase demand in a way that is flexible. While I would not advocate for spending lots of our members’ money on one or two DC fast chargers in the valley, I definitely think it makes sense to make smart investments in at-home charging (called “Level 2”) so that OCEC has visibility into the future. Lots of other utilities in California, Oregon and Washington are doing the same.
What’s the status of solar power at OCEC? Is there an opportunity to increase the power derived from solar?
At the moment, OCEC is doing the minimum required by state law. I think we could be doing more. As the peak demand in summer increases due to air-conditioning loads, solar becomes more valuable. However, one of the big obstacles to solar in the valley is not under OCEC’s control: Hardware and installation costs in the valley are almost twice as high as those in California and Oregon, due to our remote location.
Is OCEC’s network adequate for current build-out and for the increased pace of growth in the Methow Valley? Can the network handle high demand on holiday weekends?
Generally speaking, yes, it can. However, to minimize long-term peak demand costs, we should consider peak-time rebates, which incentivize members to conserve energy on peak days. Right now, these peak days generally occur over holiday weekends in the winter.
Wildfire mitigation will be a focus of the annual meeting. What should OCEC do to be prepared for wildfire and to protect its network and the community from the risk of wildfire?
In addition to pole treatments, undergrounding and aggressive tree trimming, we need a strong communication approach to identify at-risk individuals – particularly seniors with medical equipment – for the inevitable power shut-offs that will become more and more necessary each fire season. We also need to bring in more electricians to the valley in order to increase the installation of backup generators and self-supply options.
What are your thoughts about OCEC’s propane subsidiary, from both an economic and energy standpoint?
The propane company is run primarily as a community service, not as a profit generator. Economically, it’s a separate business and doesn’t affect electricity rates. From an energy perspective, propane will be increasingly vulnerable to carbon taxation over time, and so I think it’s prudent to begin the conversation about the gradual electrification of heating and home cooking. It is worth noting that heat pumps and induction cooktops have come a long way in the past few years.
What considerations should be taken into account when the BPA contract comes up for renewal in 2028?
While Bonneville is great in many respects, it has become gradually less price-competitive over time. The trajectory of Bonneville’s prices is upward, while the cost of wholesale power is flat and the cost of renewables (solar/wind) is dropping. Thus, when the time comes for OCEC to make a 20- or 30-year purchasing decision, it would be wise to work toward reducing (though likely not eliminating) our dependence upon Bonneville.
