Electric customers could be affected

Flathead Electric also plans to look into geothermal project

Bonneville Power Administration will raise power rates by 7 percent on Oct. 1.

That decision has Flathead Electric Cooperative's board of directors contemplating how to deal with the increase.

"Our Bonneville bill is about half our expenses, which creates a 3 1/2 percent to 4 percent increase in revenue requirements," said Ken Sugden, general manager of Flathead Electric Cooperative. "The rate increase from Bonneville adds about $3 million a year."

In response, Flathead Electric Cooperative, which anticipates rate increases in 2011 after the power from BPA is capped, plans to begin exploratory drilling for a geothermal development project in Hot Springs as early as 2010.

Bonneville is capping the power it provides to Flathead Electric, so the co-op must seek energy elsewhere. From October 2011 to September 2012, Bonneville Power Administration will measure the valley's power load and then Bonneville will supply only to that measurement even as the load on the grid increases in the future.

Additionally, Flathead Electric is adjusting to a government mandate for power providers to start meeting part of their electricity demand from renewable sources - 5 percent this year, 10 percent by 2014 and 15 percent from 2015 on.

In July, Rep. Denny Rehberg announced that the co-op would receive $491,000 for the project, which was included in the Energy and Water Appropriations Subcommittee bill for fiscal year 2010.

"[Geothermal] produces a steady supply of energy, as opposed to variable sources like solar and wind, so there is not a problem integrating the output into the electric system," Sugden said. "The Hot Springs area in Lake County appears to be a good source of geothermal energy."

FEC hopes to collaborate with the Confederated Salish and Kootenai Tribal Council and Mission Valley Power since the site for heat extraction is on the Flathead Reservation and in Mission's service area.

In the meantime, the co-op's board of directors will assess the situation, as well as the upcoming power cap to decide whether to raise consumer rates - 3 to 4 percent - or to tap into the co-op's rate-stabilization account.

"I would guess that there may be a rate increase, but it wouldn't happen until spring," Sugden said. "We don't want to increase rates in January when people are getting big heating bills. We know the impact in dollars from the Bonneville rate increase, we just don't know how it's going to affect our rates yet."

The impact of a rate increase would hit those now struggling to pay their bills the most.

"We are hearing from people we haven't heard from before, long-term good-standing members," said Tod Young, director of financing and accounting at Flathead Electric.

Young said the credit department is receiving more calls about inability to pay electric bills, many from people who have been recently laid off or are in foreclosure. The co-op offers a number of programs to assist members in paying their bills, such as the federal Low Income Energy Assistance Program, which runs from Nov. 1 to April 30 each year, and Keep the Lights On, an internal assistance program.

"If they're currently experiencing difficulty paying bills, a rate increase would impact them harder," Young said.

Young recommended that customers take precautions to reduce electricity use, such as calling for a free energy audit, replacing incandescent light bulbs with compact fluorescent light bulbs and turning the temperature down on water heaters. The co-op also offers members the chance to switch their electric bills to levelized billing, which averages the bills so that each month's cost is about the same amount, instead of huge spikes in colder months.

"We're not the big bad wolf," he said. "We will do everything to assist members in keeping the electricity on."

For more information about financial assistance programs and energy-saving tips, visit www.flatheadelectric.com, and search the Member Services page.

Reporter K.J. Hascall may be reached at 758-4439 or by e-mail at kjhascall@dailyinterlake.com