Flathead Electric plans modest rate increase

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A swan in a snow squall. While BPA funds a host of fish and wildlife projects in Montana, they also come at a cost to ratepayers. About one-third of the wholesale rates are fish and wildlife mitigation expenses.

Flathead Electric Co-op Monday announced that average members would see about a $1 per month increase in their electric bills starting in June.

The increase is modest compared to the 5.4 percent increase the co-op has seen on wholesale power rates from the Bonneville Power Administration. BPA provides about 95 percent of the co-op’s power supply, said John Goroski, director of regulatory affairs for the co-op.

The remaining power locally comes from the biomass generator at F.H. Stoltze Land and Lumber mill and some is produced from gas from the Flathead County Landfill. The co-op also provides power to neighborhoods near Cooke City. That power — about 4 percent of its portfolio, comes from Basin Electric.

Wholesale power rates are still fairly low compared to other regions of the country — about 3.9 to 4 cents a kilowatt hour. They make up about 55 percent of the co-op’s total costs. The other 45 percent is maintaining the system, staff and infrastructure.

The co-op is also the largest taxpayer in Flathead County. Last year it paid more than $5.5 million in Flathead County property taxes. Total, the co-op paid $6.0335 million in property taxes.

The co-op has used a variety of methods to keep rates down, from utilizing more efficiencies to deferring revenues in anticipation of BPA rate increases.

The overall rate increase is primarily due to lower than expected demand for power, a declining forecast of surplus power sales revenues due to lower market prices and, escalating costs of programs driven by legal requirements — including fish and wildlife requirements, BPA spokesman David Wilson said in an email to the Hungry Horse News.

According to figures provided by the Northwest Power and Conservation Council, which tracks the expenses annually dating back to 1980, fish and wildlife spending dropped in 2017, from $346 million in fiscal year 2016 to $339 million in 2017. However, BPA also figures in costs of power lost that it has to spill over dams and debt service. But even with those costs figured in, BPA spent $494 million in 2016 and $461 million in 2017 on fish and wildlife.

John Harrison, spokesman for the council said the BPA will have costs this year from a court-ordered spill for fish on lower Columbia River Basin dams.

One published estimate was that the spill would cost $40 million, Harrison noted, but BPA has since backed away from that figure. Wilson said the BPA is still assessing what the spills, which will run over multiple lower dams in the system, will cost.

Water spills designed to help salmon and steelhead stocks in the Columbia River Basin might help fish, but they also result in lost power, Goroski notes.

There’s been decades-long talk of removing some dams on the Snake River that impede upstream migration of fish. If that were to happen, it would impact rates here, Goroski said.

Harrison concurred, noting there isn’t just the loss of power — an estimated 1,500 megawatts, but there’s the cost of tearing the dams down and the cost of the outstanding debt on the dams.

A recent study by the Northwest Energy Coalition suggests the dams could be removed and replaced with other forms of clean energy like wind and solar at a minimal cost to consumers. The study claims that salmon stocks since the dams were built are down by 90 percent.

But dams also provide clean, carbon-free energy that is relatively inexpensive, Goroski noted.

Another inexpensive form of power is solar — and California is producing a surplus of it, Harrison noted, at cheaper rates than even hydro. BPA wholesale power runs about $39 a megawatt hour, while solar is about $20 a megawatt hour. In the future, BPA could find itself seeing steep competition from California renewables as 20-year contracts for power supplies to utilities like the co-op expire in 10 years, Harrison said.

BPA admits that a surplus of power forces it raise its rates in order to meet its own fixed costs. Fish and Wildlife mitigation, for example, is about one-third of the cost of rates it charges.

Over the years the BPA has funded a multitude of projects locally, including helping fund key conservation easements and fish projects.

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