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Co-op's power costs keep rising

by Richard Hanners Hungry Horse News
| March 18, 2015 7:35 AM

The cost of power keeps going up, the Flathead Electric Cooperative reports in their 2014 Annual Review. The Co-op spent $59.2 million on power purchases last year, a 10 percent increase over the previous year.

The cost of operations and maintenance increased about 5 percent to $9.2 million, the interest expense on $172 million in long-term debt stayed about even at $8.7 million, and net margins fell about 34 percent to $5 million.

The report pointed to an all-time historic cold spell last year for the surge in power consumption by Co-op members.

The board of trustees voted to refund a portion of excess margins derived from these increased power sales back to members.

Power costs could continue to increase. The Bonneville Power Administration, which supplies nearly all the Co-op’s power with a contract through 2028, raised rates by 7.5 percent in 2011 and by 9.6 percent in 2013.

Last December, the BPA announced a proposal to increase the average wholesale power rate by 6.7 percent and the transmission rate by 5.6 percent effective in fiscal year 2016-2017.

In response to BPA’s 2013 rate increase, the Co-op’s board of trustees voted to gradually increase rates to members, with a 3.75 percent increase in June 2013 and a 2.4 percent increase in June 2014.

System reliability improvement projects completed by the Co-op last year included a new Badrock Substation on Highway 206 capable of serving about 4,000 members. The substation also can back up substations in Columbia Falls, LaSalle and Hungry Horse.

The Co-op reports that it saved about $500,000 through energy efficiency programs last year, about 30 percent more than expected. This included an energy incentive program at Kalispell Regional Medical Center.

A total of 172 different commercial lighting retrofit projects were completed last year, with members receiving a total of $526,000 in rebates that in most cases covered much of the cost for members, the Co-op reported.

The Co-op will hold its 78th annual membership meeting at the Canvas Church (formerly the Christian Center), 255 Summit Ridge Drive, in Kalispell, on Saturday, March 21, with registration, coffee and pastries starting at 8:30 a.m., local fiddlers at 9:30 a.m. and the annual meeting from 10 a.m. to noon.

Members will learn about the Co-op’s financial stability and candidates for election to the board of trustees. Three of the nine trustees are up for re-election — Alan Ruby, for north of U.S. 2; Jay Downen, for Whitefish, Big Mountain and Olney; and Emery Smith, for Lower Valley.