Alan Watson, Incumbent, has served on the OCEC board since 2015, and is currently Treasurer and Chair of the Finance Committee.
Alan believes that it is his 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. Alan believes we need knowledge and good judgement 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.
Alan grew up in Seattle and enjoyed family camping trips in the Methow, including camping at Washington Pass before the highway was built. He has worked as a field biologist, a high school science teacher, a ski coach, and a certified public accountant. He has a bachelor’s degree from Harvard and an MBA from the University of Utah. In 2011 he retired from his accounting career and moved to the Methow Valley full time. Other boards that he has served on include Methow Trails, the Methow Valley Nordic Ski Education Foundation, and the Pacific Northwest Ski Association. Alan and his wife Karen feel unbelievably lucky and grateful to be living here in such a magnificent physical setting and to be part of such a wonderful community.
As a director, what agendas/missions/goals will you promote with your Board work as to where the OCEC should focus their efforts?
My top priority, and I think it should be every other board member’s as well, is to ensure that OCEC continues to provide reliable electricity and good service at reasonable rates. To this end we must proactively anticipate the challenges we face, but be careful when we consider new initiatives that might cause unnecessary expenses or that might risk our members’ equity. I know of several other electric co-ops in which unfortunate decisions by board and management led to significantly increased rates for members.
Another priority is to ensure that costs are spread between the members fairly. We are sometimes asked to support one group or another, and we need to remember that OCEC’s assets are not ours (the board’s) to give, but rather belong to all the members. We especially need to be sure that we do not incur costs that benefit our better-off members at the expense of all members, including the less well-off.
This spring OCEC will hire a new General Manager, and we will need to establish a good working relationship with him or her. The board is responsible for monitoring and mentoring the GM, but the board also needs to respect his or her areas of responsibility and to avoid the temptation to micro-manage. We want to actively foster a spirit of partnership, with open and honest communication, a good interchange of ideas, and the best decision making possible.
Beside the three general priorities mentioned above, the board deals with a series of specific issues, most of which are primarily the responsibility of the General Manager but which the board needs to be somewhat involved with to assure that our responses are consistent with our strategy. Ray’s additional questions below deal with some of these.
The OCEC power supply contract with BPA will come up for renewal in 2028… What are your thoughts for where/how OCEC should get its power in the future? Mixed power sources or clean sources only?
Our current 20-year power supply contract with BPA will expire at the end of September, 2028. Well before then we will need to decide where we will get our electricity after that date. We do not yet know what options BPA will offer for the next round of contracts. We might continue with BPA more or less as we are now, buy electricity from PNGC without a BPA contract, align ourselves more closely with the Okanogan Public Utility District, or perhaps pursue some other alternative that we are not yet aware of. (PNGC is Pacific Northwest Generating Cooperative, a co-op of co-ops set up to give its members more market clout; OCEC is currently one of the PNGC member co-ops).
Beside the BPA contract renewal issue, the shift away from fossil-fuel generation and toward more renewables, driven both by public demand and by legislation, could lead to more volatile and possibly higher prices along with an increasing likelihood of periods without enough generation. Historically BPA electricity has been cheap, reliable, and mostly carbon free. Careful exploration of our alternatives will be critical to ensure that our future supplies will share those three attributes.
I believe that until the grid has much more storage capacity (batteries, pumped storage, possibly hydrogen) than it does now, we will need to have other generation that we can call on when we need it to avoid blackouts during times of no sun or wind. The most economical alternative that meets those needs is natural gas. I respect the views of those of us who want to phase gas out sooner, but I don’t believe our society will tolerate frequent shortage events like we have recently seen in California and Texas. We are installing renewables and building storage, but it will probably be some years before we can afford to do without gas as a backup.
Should OCEC investigate a rate plan to lower peaks demands? For example, demand based or time of use rate structures?
The difference in OCEC’s cost of electricity between day and night does not vary enough to make time-of-day pricing much of a priority for us. However we can foresee a situation in which demand peaks, most likely cold winter mornings with lots of visitors in the valley, begin to stress our system. We are interested in pricing incentives that reduce demand during those peaks.
The OCEC currently does not have an electric car policy/plan, but has a committee and will be considering one. What are your thoughts on this? Should OCEC have a special rate class for electric car charging stations? Should OCEC subsidize the cost or provide public charging stations?
If electric vehicles are about to become much more popular, as most analysts are forecasting, the valley will need charging options. Full- and part-time residents who buy electric vehicles will mostly want to charge them at their houses. They can install Level 1 (120 Volt, most of a day for a full charge) or Level 2 (240 Volt, four hours or so for a full charge) chargers themselves, although they might need an electrician to ensure an adequate 240 V outlet and sufficient amperage. Motels and other businesses might also want to make Level 2 chargers available for their guests.
OCEC would benefit if we can encourage installation of “smart” Level 2 chargers, which can be programmed and controlled by wi-fi. This could allow us to shift charging times to later in the evening or night and avoid big spikes in demand.
Some EV owners will want access to Level 3 rapid chargers, also known as Direct Current Rapid Chargers. These require special transformers and are much more expensive to build than Level 2 chargers. OCEC should not plan to build Level 3 chargers, but we should be supportive of any other entity that does want to do so. We want to encourage anything that meets our members’ needs (including the needs of visitors to the valley), but we also need to consider financial risks carefully and to be careful not to subsidize one group of members at the expense of the rest.
OCEC should not subsidize the installation of chargers if doing so would unfairly benefit EV owners at the expense of non-owners. We should try to get grants that could be used to offset charger costs, and we could invest in charging if we expect revenue from charging to cover the costs.
Should OCEC investigate combining with the Okanogan PUD to consolidate resources and provide cheaper power to its members?
We do periodically meet with the PUD to discuss ways in which both entities might benefit from cooperation, from small ways up to and including the possibility of a full merger. In the past we have not decided to pursue combination, but as conditions change so might the attractiveness of a combination. Each organization has strengths and weaknesses, but there would probably be cost savings from economies of scale. A full merger is unlikely and if we decided to do it would take some time, and would ultimately be subject to a vote of approval by OCEC members.
Should OCEC become involved in the development of broadband internet for its service area? And how?
The OCEC board of directors has looked at ways we could promote the extension of broadband to parts of the valley that do not have adequate service, like the upper Twisp River and Lost River, either on our own or in partnership with Methownet. The biggest reason that we have underserved places in our service area is that the infrastructure costs per potential customer are too high to be recovered by service fees, and so would require either subsidy by electric customers or significant grant money. We do want to encourage broadband extension. New technology like Starlink might be a more economical solution.
The OCEC has a propane subsidiary. How do you feel about this given the movement in the state and some in the valley to reduce carbon?
Many of our members depend on propane for heat and cooking and we need to continue to serve them. Requiring propane users to switch to all electric would be enormously expensive, including not only the cost of new appliances but also in many cases the need to re-wire the house. If state policy manages to phase out propane use over several decades, then perhaps at some time the propane company would no longer be financially viable. Until then we should continue to serve the customers who depend on us.
Alan also answered a couple of added questions submitted on the Methownet BB…
1) Breaching the four lower Snake River dams: OCEC is a very small player in the political process, with no direct say in the fate of the Snake River dams. That said, I do not support breaching the Snake River dams now. With the changes in generation resources in our region in the next few years, and especially if EV charging adds significant new load, we will be increasingly vulnerable to electricity shortages that could lead to blackouts like what California and Texas have recently experienced. If we knew that dam removal would avoid salmon extinctions, we might judge that an acceptable risk. But it is not clear how much difference the dams make. I’m sure they don’t help fish survival, but one recent study found similar declines in returning salmon in dammed and undammed rivers, suggesting that maybe ocean conditions are the main culprit for low return rates.
2) Nukes for the future: Like the Snake River dams, this is not an issue that OCEC has any significant say in, but I find it very interesting. If it weren’t for expense and radiation issues, nuclear power would be the ideal way to generate electricity, with abundant fuel, no carbon emissions, and a small footprint. I can remember when nuclear generation was promoted as electricity that would be “too cheap to meter”, but in the succeeding half century nuclear generation has turned out to be quite expensive. I am not sure if that’s because of something fundamental about nuclear generation, or whether we just never learned how to build nuclear plants efficiently. Nuclear power plant waste has been a political issue, but I don’t know if that is a necessary reality or the result of widespread public misunderstanding. France has for several decades generated 75% of its electricity from nuclear power, with few known problems. There are several small modular nuclear systems under development that look promising. The modules would be factory made, allowing economies of scale in standardized production, and the design is such that any loss of power causes the reaction to slow down or stop. When their lifetime is up, the modules would be returned to the factory for efficient waste removal. Our power supply will be more robust if it is more diverse, so if the expense and radioactive waste issues can be overcome nuclear could be an important part of our future.