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Co-op says Higher Electric Rates Could Come with BPA Plan by Chris Peterson Hungry Horse News, February 16, 2006

Flathead Electric is warning it could see a significant rate hike if the Bush administration's budget passes intact.

Under the Bush plan, the Bonneville Power Administration would have to make additional payments on its debt to the U.S. Treasury if the agency's revenues from power sales exceed $500 million per year.

If that happens, it could amount to a 6% wholesale rate hike to the Co-op, said Stephanie Wallace, community affairs manager for FEC.

Wallace said she didn't know the exact impact on residential bills, but they would most certainly go up as well.

The Bush plan would impact the Co-op's rates in 2008 and 2009. The Bush plan has been universally opposed by Northwestern states. The BPA in the past has used additional revenue to keep rates down for its customers.

The BPA runs the majority of the dams in the Pacific Northwest, including the Hungry Horse Dam here.

FEC gets about half its power from BPA. The remaining half comes from an contract with Pacificorp. That contract runs out this year, Wallace said. The Co-op would like to get all its power from BPA, Wallace said.

BPA generally has lower rates than private utilities.

The BPA endorsed the president's plan. But then again, it's part of the executive branch of government.

"We are fully committed to what the administration decides," said spokesman Ed Mosey.

Mosey noted the plan isn't all bad. For example, the additional payments are made on the principal, not the interest, which would lower the BPA's overall debt.