Sunday, October 12, 2008

Day of Reckoning

Ok, it's not that day of reckoning, but it is the long dreaded day of arrival of the electric bill. I think I've mentioned our much higher electric rates in an earlier entry, but to refresh your memory, here are the facts.

RECO is the island's electric provider. They've been in serious trouble for years due to aging equipment, inadequate generators for the growing needs, difficulty getting diesel fuel mainly because of inability to pay for any more fuel to run the generators. The island has been suffering with frequent power outages for as long as we've been coming here (3 years), and some of these outages have been quite lengthy. Some are planned, to spread the load more fairly, some are not. The problem became so great that the only solution was to sell the company to someone with the resources to upgrade the entire system, buy adequate fuel, and get everything running as it should. It finally sold to a very wealthy American businessman, Kelsey Warren.

Interesting side story about that sale: there were two bidders for the company, the Warrens and a Dominican Republic group which included some of the same people who were running the company. The sale had to be approved by a vote of all RECO customers, so a meeting was called, the options presented and a vote taken. The customers, who all want serious change, voted for the Warrens. The powers that be didn't like that result and refused to accept the results. Another vote was called for and the customers again overwhelmingly voted for the Warrens. This time the results were accepted.

The Warrens have been very open and forthcoming about the changes that must be made and the costs that will result. The rates had not been raised for a long, long time, and with the rising cost of fuel, that could not continue. The company has been losing a million dollars a month for quite some time. The rates were projected to rise by 50-70% and were being phased in over a couple of months. The new rate schedule was posted on RECO's website. Necessary, unpleasant, but not surprising given all the advance publicity.

Everyone has just received their bill. The bills are delivered in our area on the 9th day of the month and are either stuck in your door or your gate since no one has mailboxes. The bill must be paid in full within 6 days or they shut off your meter. They used to fine you first, then if you still didn't pay, shut off the meter. No quibbling. The bill must be paid in cash, in person, at one of several locations or at RECO by credit card (although it looks like that may soon change with the new option of paying online! woo hoo!). The outcry over the newly received bills is tremendous. I've been reading on some of the forums about the horrendous bills some have received, and honestly, they are ridiculously high for some customers, both residential and commercial. I've also read that the Spaniards (mainlanders who have moved here for better pay) are planning a demonstration tomorrow at RECO so avoid the road to French Harbor tomorrow. There has been speculation that an accidental doubling of rates occured on some bills.

Our bill is higher than last month, but was not doubled. We were expecting our new rate to be 41- 43 cents per kwh (that's 8 times what we pay per kwh in St. Louis!). You can see why we don't air-condition our entire house, or even the one room very much, and we certainly don't use the dryer. Our bill was just under $200, so our rate is lower than we expected. One reason could be the decline in oil prices over the past month. Part of the rate is based on the fuel surcharge for diesel fuel, which is an oil product, and as such is subject to fluctuations.

There is so much development and contruction going on here that RECO is projecting that their load will double in the coming year. They're trying to prepare by adding larger generators. In the meantime, the new generators mean fewer power outages for us. With all the uproar over the rate increase, I'll write more about this in a later blog.


  1. whew! I was worried when I first started reading your post!!

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