Flathead Electric Cooperative members will likely see a 5 percent increase to their bills this year.

FEC general manager Ken Sugden announced the increase at the members' meeting on March 20.

Bonneville Power Administration raised its rates 7 percent in October last year, which the Co-op deferred until this spring.

"We were able to absorb that Bonneville rate increase and not pass it onto you in the winter," said Mark Johnson, assistant general manager.

Sugden also said that residential customers who use more than 3,500 kilowatt-hours per month of electricity will soon be charged incrementally more for such high usage. Sugden said he hopes the rate hike will encourage co-op members to reduce their electricity use.

"Energy efficiency is the cheapest resource," Sugden said. "Energy you don't use costs 1.5 to 2.5 cents per kilowatt-hour."

Electricity supplied by BPA — which comes from federal dams on the Snake and Columbia river systems — currently costs the co-op 3.5 cents per kilowatt-hour. In October 2011, BPA will cap the amount of power it provides to FEC, which means the co-op must find other energy sources to meet the demand of a burgeoning population. And though BPA will provide energy at a constant rate through 2028, FEC estimates that members will require two to three additional megawatts per year.

Members will additionally see an eventual increase of the residential flat facility charge — currently about $16 — which will jump to $19.

The cooperative's board of trustees has begun a search for energy sources. It has options, as Sugden explained. The cooperative already captures methane gas from the landfill that is converted into energy by a generator, as well as 12 homes tied to the grid through solar and wind power.

FEC plans to begin drilling for a geothermal source of energy as soon as possible. But these energy-efficient resources still come with a high price tag and the cooperative is seeking for energy that costs no more then seven to nine cents per kilowatt-hour.

"We have two goals: to provide competitive and reliable sources of power and to achieve the highest level of member satisfaction," said George Taylor, trustee for district seven. "Competitive and reliable sources, that's not an easy task. We have to go out and search for it. The last thing I or any members of the board want is a dissatisfied membership."

Another option the board is exploring is to join a group of utilities. This option has been met with some resistance from members, who worry that once the cooperative joins such an organization, it will lose autonomy. Sugden sought to assuage fears by explaining that if FEC wanted to leave PNGC, it could do so at any time.

Sugden noted that the Board of Trustees must decide to join Portland-based Pacific Northwest Generating Cooperative — known as PNGC Power — an electric generation-and-transmission cooperative of 16 other Northwest electric distribution cooperative utilities in a seven-state region by April 7.

Several members stood during the question and answer session to ask why FEC does not build its own source of power. One suggestion was a biomass plant on the Stoltze lumber land, another was to utilize solar or wind energy.

"We encourage solar panels, but unfortunately in our area it doesn't pay off as well as in others," Sugden explained. "The best wind is on the other side of the Rockies. The wind produces when the wind blows. We would have to supplement the wind with some other resource."

And as to building a source of energy here in the valley, Sugden replied that while the cooperative offers a green energy program in which members may contribute $5 each month toward renewable energy credits, only roughly 400 of thousands of members have taken advantage.

"It doesn't look like we can build resources on our own," Sugden said. "If we want a home resource, the best way is to associate with groups of utilities. These are very difficult decisions. The default is to have Bonneville go out on the market and buy our power."

In addition to these proceedings, three of the nine trustees are up for re-election. In districts four and seven, Doug Grob and George Taylor, respectively, are running uncontested. Hungry Horse resident Dee Brown challenges incumbent Chris Byrd in district one, which includes Columbia Falls and the Canyon.

"A couple of months ago I got phone calls from people concerned about the cooperative and their rates," said Dee Brown in a brief speech before members present. "I decided after so many phone calls I'd read the board meetings' minutes. I couldn't get the minutes. That's disappointing."

Brown said she aims to keep jobs in Flathead Valley and wants to explore further the biomass option.

Chris Byrd, longest serving member of the board, in his campaign speech said that he has been actively involved in power supply issues.

"I am proud of the accomplishments of Flathead Electric and I hope you are, too," Byrd said. "We have had major decisions to make to meet the power needs of our growing population. Do we move to acquire our power supply or do we lease it? I promise to continue to make decisions like these."

Ballots for the trustee election have been mailed to cooperative members. The ballots must be returned by April 9.

More than 400 people attended the meeting at the Christian Center in Kalispell on Saturday.