Rising costs of hydro energy lead to increased electric rates for customers

Flathead Electric customers will see a rate increase by June 1, 2013. - Katrin Frye file photo

Flathead Electric customers will see a rate increase by June 1, 2013. – Katrin Frye file photo

The rising cost of energy leads to a rate increase for electricity customers in the Flathead. The increase has been a spring trend over the past couple of years.

Flathead Electric Co-op (FEC) is upping their rates an average of 3.75% across the board.

Assistant General Manager Mark Johnson said the rising costs of energy is prompting the rate increase. He says the average customer uses about 1,000 KW hours a month, with the rate increase they’ll be paying about $4.38 more on their monthly bill.

Bonneville Power Administration (BPA)  supplies the vast majority of FEC’s energy, and Johnson said the October 2011 rate increase from BPA was 7.5% and next October FEC anticipates seeing a nearly 10% increase on power rates, and 13% on transmission rates.

Johnson said they’ve been trying to stagger the effect of the BPA increases by incrementally raising rates between 3 and 4%. Johnson said he doesn’t see the trend changing anytime in the near future.

“There’s just too many pressures on rates at this point to allow Bonneville to either keep rates steady or actually decrease rates, I just don’t see that in the cards,” Johnson said those pressures include an aging infrastructure of dams, rising fish and wildlife costs, and a depressed energy market.

Johnson said the system struggles with what he called capacity constraints. With combined wind and hydro there’s plenty of energy out there, but supply will rise and fall and he said they can’t store it to save for a dry, windless day.

“If there was a viable storage situation we would be able to solve a lot of these issues because we could be generating when the rivers are flowing and when wind is blowing and holding that in reserve until we actually need it,” Johnson said. “Unfortunately, there’s just no large, industrial sized storage at this point, but hopefully we’re working towards that because that would help solve a lot of issues currently in the hydro-system.”

Johnson said each year the Co-op rolls out its rate increase after the mid-March annual meeting.

The increase goes into effect June first.



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