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BEC offers hope for future

By Eleanor Guerrero

Carbon County News

On Friday, Feb. 20, Beartooth Electric Cooperative, Inc.’s (BEC) board gave members their first sign of substantial improvement after the tumultuous years of the Southern Montana Electric Generation and Transmission Cooperative, Inc. (Southern) bankruptcy, in its monthly update at Red Lodge Area Community Foundation. Interim General Manager Richard Peck spoke of efforts to return “the cooperative back to a level of operational normalcy,” with a relatively good 2014, including the possibility of a rate decrease. In 2014, BEC profits were higher than budgeted ($510,000) at $578,000. They are going into budget meetings now and the goal is to get the rates down. There are no promises, but Peck said, “The Beartooth Board is in the process of making a 5 percent rate reduction after mid-year possible.”

Board member Arleen Boyd agreed they are trying. “This is not where we want to be—highest rates in the nation.” She said it is both the board and incoming management, Lower Valley Energy’s (LVE) goal to work on getting rates down. Boyd said the good year was partially due to higher usage in a cold winter but also due to considerable work done to decrease costs. If members notice less outages, Peck said it is because, “during the past year, the staffs with contractors were able to replace over 500 older poles, update about five miles of underground wire and trim trees over 300 line miles of power lines with funds provided by your electric rates. The staff's work activities helped reduce outages during the year. Pole replacement and trimming of trees is still the number one operational priority for the 2015 BEC budget.” The board’s priority is to maintain ten distribution substations and 1,798 miles of power lines.

A three-year management agreement has been signed with LVE and BEC just approved a management transition plan. Distribution related costs account for 50% of annual electric bills and power supply costs account for the remaining 50%. LVE will work at reducing distribution costs. Around late 2016, the current power contract ends with Southern’s final payment or BEC’s earlier prepayment of their debt portion. Peck said, “Presently the cooperative is paying $70/Mwh to Southern to pay off the noteholders. Current power supply market costs are in the range of $43/Mwh. Going forward with a new power supply contract will be somewhere in the range of $50 plus/Mwh.” However, Peck said, “By reducing both distribution and power supply costs in the near term your Beartooth Board is looking forward to obtaining their goal of reducing your electric rates.”

The bankers and regulators must approve any BEC rate reduction. Besides traditional G&T power supply contracts, BEC is considering: acquisition by an investor-owned utility, loose partnership with another co-op, and staying independent in power supply contracts and business operations. BEC continues to review available power supply resources and forecast supply requirements in creating an Integrated Resource Plan before committing to longterm contracts. In March, town hall member meetings resume as follows (details available online and in member bills): March 30: Roberts; March 31: Fishtail; April 1: Clark, Wyo and April 2: Columbus. Members can find out more about the rate decrease and other concerns. “Plan to join us!” said Peck.