Co-op announces rate hike for members

Flathead Electric Cooperative announced March 22 that a rate increase for its members will be implemented over time instead of all at once to cover a 9.6 percent rate increase proposed by the Bonneville Power Administration.

The Co-op’s board of trustees said they felt that “spreading expenses out will help smooth the transition into higher power costs, as many people struggle to pay their bills during this unstable time in our economy.”

Starting with the June 1 bill for May usage, Co-op members will see a 3.75 percent average annualized rate increase across all classes. Most residential members will experience an increase of less than $4.75 per month.

Co-op regulatory affairs director John Goroski said the increase for residential customers will be closer to 5 percent and slightly higher than for commercial customers because residential customers tend to have peak demands in winter, while commercial customers tend to have flatter demand.

The increase will affect the monthly basic charge that helps cover the Co-op’s minimum fixed costs and the charge for the amount of energy consumed. A residential member using 1,000 kilowatts per month will now pay $84.52 rather than $80.14 under the old rate.

Members can choose to average their bill payments over the year based on usage over the past 12 months by contacting the Co-op and asking about the “leveling billing” option. For more information, call 751-4483.

The Co-op gets nearly all its power from BPA and has a contract with the federal entity through 2028. BPA has said the Co-op’s share of the cheap federal power cannot increase, but Goroski said the Co-op has sufficient supply from the BPA to get it through 2015 before it may have to pursue other power options.

BPA raised the price of wholesale power by 7.5 percent in October 2011. Co-op management anticipate BPA will increase the price by 4.1 percent this year and 10-13 percent in 2014, based on fiscal years.

BPA says it needs to raise its wholesale power rate to compensate for projected reduced revenue from surplus power sales and to continue funding needed investments in BPA’s Columbia River power system. BPA also wants a 13 percent rate increase for transmission to help maintain system reliability. This would be the first transmission rate increase in eight years.

In related news, the Montana Public Service Commission approved by a 4-1 vote a temporary rate increase for natural gas supplied by NorthWestern Energy. The 5.4 percent rate increase will provide NorthWestern Energy about $13.2 million while PSC considers whether to grant the utility a permanent increase.