BillingsGazette

 

Published on Friday, January 30, 2009

Guest Opinion: Co-op members shocked by power bill increase need answers

By ARLEEN BOYD

Beartooth Electric Cooperative members were stunned when December's bills brought a 20.5 percent rate increase, a base rate increase of 16.9 percent and an enormous unanticipated surcharge. For a family consuming the "average" 750 kilowatt-hours per month, December's bill would show a 43 percent increase, rising to $131.28 from a November charge of $91.72.

 

This, after Beartooth's President John Prinkki announced an upcoming rate increase of 16.5 percent per kilowatt-hour and a 6 percent base rate rise at the co-op's annual meeting in September 2008.

 

Notice sent with the bill attributed the surcharge to Beartooth's obligation to provide capital for the Highwood Generating Station and that "at some point after long-term financing is secured for HGS" the surcharge will disappear.

 

Astonishingly, Highwood was not even on the agenda for the annual meeting.

 

The federal Rural Utility Service denied Southern Montana Electric's loan request for the Highwood Generating Station in February 2008, citing potential environmental costs, rising construction costs and the lack of customers for much of the proposed plant's output. Is the project a good investment? Can SME move a $900 million project forward? Potential lenders will discover that:

 

• SME decided to build a large coal-fired power plant at a time of widespread predictions of carbon regulation.

 

• Ignoring industry-standard environmental and business concerns used by the RUS to deny the Highwood loan, SME projected private-sector financing.

 

• The projected cost of the generating station has risen from about $450 million to $900 million.

 

• In April 2008 SME removed its largest member, the Yellowstone Valley Co-op from "any benefit or liability" resulting from Highwood. The remaining four co-ops created Southern Montana Electric Generation and Transmission Cooperative, to take the Highwood project forward.

 

• SMEG&T apparently has no assets and no management team, and its Web site still reports that the RUS will finance Highwood, although that loan request was rejected nearly a year ago.

 

• The Beartooth co-op president (and vice chairman of the board of directors of SME) deems his co-op "financially sound - we just don't have any operating cash."

 

Members need to be involved. Beartooth says it plans to meet with members to discuss Highwood and our bills. Before the meetings we need up-to-date financial statements for the Highwood project and the co-op (the financial report presented at the September annual meeting covered 2007). The board should:

 

• Provide the terms, amount and duration of the $3 million to $4 million loan that caused the surcharge.

 

• Provide a business plan for Highwood.

 

• Explain why the city of Great Falls, the largest identified user of power from Highwood, has no financial responsibility for the project.

 

• Detail what financial institutions have been approached for financing and how they have responded.

 

• Explain why the board has not informed us that we are defendants in the YVC lawsuit and explain our potential liability.

 

• Provide alternative plans should HGS not be built.

 

The Department of Energy says efficiency and conservation can reduce energy use by 30 percent. Beartooth can help us conserve and save money by offering energy audits, incentives for installing efficient appliances, smart meters, and incentives instead of deterrents to net metering.

 

At our annual meetings, motions from the floor have not been allowed and important questions have been brushed aside. We need an open process that informs and involves members and calls on all the expertise we can get. It may be time to take another look at Highwood based on changing demand for electricity, new environmental information and a restructured financial world.

 

Arleen Boyd of Fishtail is a member of Beartooth Electric Cooperative. More than 20 other members in Columbus, Nye and Fishtail signed onto her column.