MVP basic rate increase proposal wraps up public phase, it's now decision time

By B.L. Azure

PABLO — Mission Valley Power presently provides the lowest electric utility rates in Montana. In its more than 20 years of existence MVP has always been at or near the top of the heap when it comes to the lowest electric utility rates provided to consumers in Montana.

Now MVP is proposing an increase to the basic rate it charges customers as well as a change to the area light/un-metered street light cost. They also want to charge for the cost of installing yard lights and poles.

If the rate increase proposal passes the muster of the MVP Utility Board then the Bureau of Indian Affairs, MVP electric consumers will see an increase in portions of their monthly statement. What they may not see but should know is that their electric bills will still be the lowest in Montana, said MVP General Manager Ralph Goode.

The MVP Consumer Council has been conducting public meetings throughout Flathead Reservation this spring and summer to gauge public sentiment. Last Tuesday the Consumer Council hosted its final meeting on the issue.

Nearly a dozen MVP consumers showed up at the meeting to listen to the reasons for the proposed increases and to voice their concerns about it.

"We want your feedback and will answer your questions," Goode told the folks gathered.

MVP was facing a $900,000 deficit for the FY from October 1, 2010 to September 30, 2011 and that was one of the main reasons for the proposed increases to the various basic rate line items, Goode said.

The closing of the Plum Creek lumber mill in Pablo contributed to the shortfall as did the 50 percent decline in new account installations. The latter decline figure was juxtaposed against the mid-2000 new account averages. It also costs more to conduct business than it did five to 10 years ago.

"When we put the budget together in the winter we identified the ($900,000) shortfall," Goode said, adding that through budget cuts, better technology and attrition MVP was able to trim the deficit to $300,000.

One of the proposed ways to recover some costs is to charge for the cost of installing yard light poles.

"We were not recovering the cost of putting up the lights on the wooden poles," Goode said. "It makes sense that we charge. With any new installation of yard lights we will be asking to recover the $450 cost of installation."

MVP then looked at its various basic rate charges that affect its 14,286 metered customers as well as 2,836 general services without demand and the 671 general services with demand consumers.

The proposed rate changes also affect commercial consumers like Flathead Reservation grocery stores, etc, and metered streetlights.

Most people at the meeting seemed to be hesitant to embrace the idea of a basic rate increase in light of the present economy. Some said retirees couldn't take a hit to the wallet no matter how reasonable. One homeowner said he felt he shouldn't have to pay the basic rate twice because he owns two homes on the same piece of property; they are on separate meters. Another man questioned the oversight of MVP operations.

MVP Consumer Board Chair Lissa Peel said the five-person Utility Board makes the recommendations for rate hikes. The Consumer Board appointed by the Bureau of Indian Affairs then takes the recommendations to the public for feedback.

The public meeting feedback with Consumer Board recommendations is then taken to the Utility Board via oral and verbal reports and they make the decision on - in this case - the proposed basic rate, et al increases.

The Utility Board decision is then reviewed by the BIA who then makes the final decision on whether or not to accept the decision of the Utility Board.

On the horizon is an increase it the rate the Bonneville Power Administration charges MVP for electricity. BPA supplies approximately 80 percent of the MVP electrical needs. Kerr Dam and a pair of small hydro-utility dams provide the rest with Kerr supplying the lion's share.

"Our contract with BPA ends on October 1, 2011," Goode said. "We are anticipating an increase after that."

The present BPA contract has saved consumers at least $18 million in rates over the 20 years it has been in effect.

"I am not convinced this increase is necessary," said one man at the end of the meeting.

"Given your situation with the closing of Plum Creek this proposed increase seems reasonable," said another.

"Even with the rate increase we will still have the lowest rates in Montana," Goode said.

There are 26 electric utility companies in Montana and MVP presently charges $67.36 per 1,200-kilowatt hours with the basic rate charges included. The next lowest is the Vigilante Coop which charges $79.60. Eight charge less than $100 per the monthly 1,200-kilowatt hours and the rest charge more. The Beartooth Coop charges the most at $165.98 per 1,200 kwh.

The BIA electric utility is operated by the Confederated Salish and Kootenai Tribes via a self-governance compact under the auspices of the federal Indian Education and Self-determination Act.

For more information, contact MVP at 675-7900 or 883-7900.