Mission Valley Power schedules rate hearing

Mission Valley Power, the nonprofit utility managed by the Confederated Salish and Kootenai Tribes, is hosting a public meeting on a proposed rate increase from 6-7:30 p.m. Oct. 24 at the Mission Valley Power conference room in Pablo.

The proposal would raise rates across all classes by an average of 18% Jan. 1; another 7% by March 1, 2025, and 5% by March 1, 2026, for an overall hike of 30%. Some rate classes will see a larger spike than others.

The first of the three proposed rate increases would take place Jan. 1 and increase basic residential and small general service charges from $17.50 to $22. Two additional fee hikes are proposed in those categories: consumers would pay $23.50 beginning March 1, 2025, and a basic charge of $27 starting March 1, 2026.

The basic charge for irrigation pumps also goes up over the same time period, from $5 a month now, to $10 beginning Jan. 1, to $15 in March 2025, and $20 a month in March 2026; energy and demand charges, based on kilowatt hours, will also increase.

Rates would also increase for general services and large general services, as well as for area lights and street lighting.

According to a press release from Mission Valley Power, the rate increases are needed to address steep increases in the cost of materials, fuel and general operating expenses, as well as the need to invest in infrastructure. It comes in the wake of a 10-year comprehensive review, completed in 2021, at a cost to ratepayers of $250,000. The review, according to MVP, serves as “a road map for future system improvements.”

The study also helped the utility qualify for $5 million in funding from the Bipartisan Infrastructure Law (BILS), which will help defray the costs of improvements at the Kerr Dam, West Shore and Finley Point substations.

In 2021, the estimated cost of replacing transformers and upgrading equipment at the Kerr Substation was $5.3 million, including $2.1 million for the transformer, which takes about two years to procure. Since then, according to MVP, inflation has driven the projected cost up by at least 15%.

The utility is also facing significant cost increases in other areas, including fuel, materials and equipment. For example, the cost of the 40-foot power poles used regularly by the utility has gone up 57% and three-inch PVC conduit costs 357% more than it did five years ago.

According to MVP’s press release, utilities across the Northwest have been afflicted by supply-chain issues that not only increase costs, but also cause significant delays in procuring materials.

A pie chart shows that 46% of MVP’s annual budget of more than $43 million is spent on wholesale power, purchased from the Bonneville Power Administration; 26% is allocated to wages and benefits for the unionized staff, whose salaries increased by 6% in July; 12% is spent on administration and operating expenses; and 16% pays for capital expenses.

The proposed 18% increase allows the utility to increase capital reserves as a buffer against inflation; improve the substations considered to be in poor or very poor condition; and increase investments in deferred maintenance.

Residences are the largest rate class served by the utility, and according to the press release, the $22 consumers would pay in 2024 is still less than the base fee charged by neighboring utilities in Flathead and Missoula counties.

Oral comments at next Tuesday’s public hearing should be limited to three minutes. Written comments may be submitted to Consumer Council Chair Brian Johnson BigSam, P.O. Box 97, Pablo, MT 59860, by Nov. 2.

The utility is also hosting its annual meetings this week in Hot Springs Oct. 17, Arlee Oct. 18, and at MVP headquarters in Pablo from 3-4:30 p.m. Oct. 19. These gatherings include drawings, refreshments and a meet-and-greet with the utility’s new general manager, Zachary Camel.