Article published Feb 7, 2008

New commissioner tries to shed light on city's electric bills

By KARL PUCKETT

Tribune Staff Writer

City Commissioner Mary Jolley has transferred her criticism of the city's involvement in selling electricity from the campaign trail to the commission chambers.

The Great Falls City Commission on Tuesday agreed to pay four routine monthly electric bills, totaling $759,400, which Electric City Power, the city's utility arm, owed Southern Montana Electric Generation & Transmission.

The bills weren't routine to Jolley, who took office in January.

She had them pulled from the consent agenda for a separate vote and brief discussion.

Jolley, who voted against the payments, said the ordinance creating Electric City Power requires it to be financially self-sustaining, and it hasn't been.

"People just ignore that ordinance, and I'm not inclined to do so," Jolley said in an interview Wednesday.

Commissioners Bill Bronson, who also is new to the commission, and Bill Beecher, along with Mayor Dona Stebbins, voted to approve the payments.

"Electric City Power will sustain itself over time," City Manager John Lawton said when Jolley raised the issue at the meeting.

During her campaign for office, Jolley asked questions about the financial viability of Electric City Power. She also raised concerns about the city partnering with SME to construct a coal-fired power plant proposed east of Great Falls.

Electric City Power buys electricity from SME and sells it to 13 private and public customers.

In the fiscal year that ended June 30, 2007, Electric City Power had $6.6 million in expenses and took in $6.4 million in revenue from its customers, said Coleen Balzarini, who heads the city's fiscal department.

Electric City Power has accumulated a deficit of $489,000 since forming in 2004.

The reason for the shortfall is that the city locked in its first customers at a price estimate of $36 per megawatt hour while the final contract price ended up being $41.70 per megawatt hour.

SME agreed to cover the difference in exchange for the city giving it credits for the raw water it needs to operate the proposed Highwood Generating Station, which Balzarini said eventually will wipe out the city's deficit.

The four bills were for power purchased in 2007 — $708,760 in December, $8,638 in June, $20,496 in February and $21,506 in January.

Electric City Power has a contract with SME to buy 22 megawatts hours during the day, when high loads occur, and 20 megawatt hours during the early morning and late evening.

The average cost is $48 per megawatt hour.

The bill for the bulk of the power usually comes at the beginning of the month and is typically about $700,000, Balzarini said.

The smaller bills reflect the city's purchase and sales on the "imbalances" market. When the city needs more power than it has under contract, it must buy it on the market, Balzarini said. When it needs less, the excess power is sold.

The bills are several months old because there's a lag time between consumption, initial bills and final bills to the city's power customers, Balzarini said.