Co-op announces retail rate increase

Flathead Electric Cooperative customers will see a small increase in their monthly electrical bills as the Co-op continues to incrementally adjust rates in response to higher wholesale power costs.

The Co-op’s board of trustees approved a 2.4 percent retail rate at their February meeting. Residential customers will see an average increase of $2.67 to their June 1 power bill, which includes power usage from May.

The Bonneville Power Administration imposed a 9.6 rate increase last year for power sold to the Co-op. BPA raised the rate by 7.5 percent in October 2011.

The Co-op’s board of trustees last year chose to gradually increase rates to customers, starting with a 3.75 percent increase. That meant a $4.75 per month average increase to residential customers’ June 1, 2013 power bills.

The Co-op’s largest operating expense is the cost of power, accounting for 52 percent of operating expenses. Power sales to members increased to $99.7 million in 2013, about 11 percent more than in 2012. The increase is attributed to higher power costs and more demand by Co-op members.

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 Co-op officials say they have sufficient supply from BPA to get through 2015 before having to pursue other power options.

BPA says it needs to raise its wholesale power rate to compensate for projected reduced revenue from surplus power sales, to continue funding needed investments in BPA’s Columbia River power system and for transmission costs.