Record-setting revenues this year prompted Flathead Electric Cooperative's board of trustees to approve $3 million in rebates to its electricity customers.

The rebates, averaging $28.76 for each residential member, will be applied as credits on November bills, according to a press release from Flathead Electric.

The size of individual rebates will be based on electricity use from January through September this year. Of the $3 million in rebates, about $1.8 million will go to residential customers.

It's the first time in more than a decade (and only the second time in the cooperative's history) that the utility has offered rebates.

Flathead Electric's operating margins improved when demand skyrocketed and costs stayed low.

Three main factors boosted demand.

Flathead Electric reached its highest peak load ever when customers dialed up thermostats during February's spell of bitter-cold weather. In July, a heat wave prompted an exceptionally heavy demand from air conditioners. And population continues to grow in the cooperative's service area.

On the other side of the equation, lower power costs are the result of an agreement Flathead Electric signed last year. The contract with Bonneville Power Administration provides power at a preferred rate until 2011.

The board also credits the cooperative's good financial position to efforts by staff and management to hold expenses down over the last few years. According to the press release, Flathead Electric consistently compares favorably with other U.S. electric utilities in expenses per consumer and costs per mile of distribution line.

The rebates are different from the capital credits that Flathead Electric members receive periodically. Those dividends are based on a customer's history of electricity use balanced against the cooperative's earnings.