2025 Power Rate Update
The rising cost of power remains a hot topic nationwide, as it affects utility providers and the communities they serve. Electric cooperatives, like Missoula Electric Cooperative (MEC), are no different as we navigate wavering power supply, mounting energy costs, and the reality of retail rate increases. During recent district and annual meetings, I’ve made it a priority to discuss these challenges, ensuring members are informed and prepared for what lies ahead.
Every two years, MEC’s wholesale power provider, Bonneville Power Administration (BPA), conducts a rate case to determine wholesale rates for the coming two-year period. This includes a formal rate-setting process involving utility customers like MEC. BPA’s wholesale power contract encompasses tiered rates. Tier 1 rates, which comprise the bulk of our power supply, are tied to the operation of BPA’s low-cost generation sources like hydropower. Historically, the amount of Tier 1 power supplied by BPA met all of MEC’s power supply needs. However, as the Cooperative’s load has grown, the excess power needed is supplied through a product called Tier 2. Tier 2 rates are market-based and can fluctuate with the power price on the open market. Unfortunately, the price of Tier 2 power and the amount needed for our members nearly doubled in our current rate period, increasing our overall power cost by nearly 20%.
In response to this significant cost increase, the Cooperative implemented a 5% rate adjustment for all rate classes in January 2024. Since that time, TIER 2 market prices have remained high, and BPA has proposed a nearly 10% increase in our TIER 1 power cost, along with a 20% increase in transmission service costs starting later this year. As a result, we will implement an additional 5% rate increase beginning April 1, 2025. This adjustment will be reflected in April billing statements, which members can expect to receive in early May. A graphic of these rate adjustments can be found below.
You may recall that in June of 2022, we restructured our residential rates by separating the peak charge from the energy charge. This change allowed us to allocate costs more fairly by tying them directly to a member’s peak energy usage rather than total energy consumption. By distinguishing these charges, members gained more control over their power bills by shifting energy-intensive activities, like laundry, to off-peak hours. The upcoming rate adjustment will further reduce the energy charge while placing greater emphasis on the peak charge, reflecting the higher cost of electricity during peak demand periods.
As a member-owned cooperative, we recognize that even small rate increases directly impact household budgets. Maintaining affordability for our members is a top priority, and we’re committed to helping you save energy and money. Members can participate in our rebate program, request a complimentary onsite energy audit, or visit us online for energy-saving resources and peak demand tips and tricks.
If you have specific energy efficiency questions or would like to schedule an energy audit, please contact our Energy Services Manager, Dan Rogers, at DanR@meccoop.com.
Feel free to reach out with any questions, concerns, or feedback regarding the rate change or any other Cooperative matters. You can email me at MarkH@meccoop.com or call my office at 406-541-6340.
