A June 1 rate increase for Flathead Electric Cooperative members will bump up most area residential electricity bills by about $3.55 a month.

The 3.5 percent residential rate increase comes on the heels of a 7.5 percent increase in wholesale power rates from Bonneville Power Administration that took effect in October 2010.

Flathead Electric’s board of trustees opted to wait until this summer to raise rates instead of imposing an increase at the beginning of the winter heating season, Flathead Electric General Manager Ken Sugden said.

Because BPA is expected to raise wholesale rates again in October 2011 by 10 to 11 percent, cooperative members likely will see rate increases of 3.5 percent each June for the next few years, then 3 percent annual increases after that for several years.

“The farther out the forecast, the fuzzier it gets,” Sugden said. “We’re trying to level out the increases.”

The residential single-phase basic charge — which accounts for about 84 percent of all co-op services — will jump from $18.91 to $20.78 when the rate increase takes effect in June.

The cost per kilowatt-hour also will increase slightly. Those rates are tiered, with those using 600 or fewer kilowatt-hours per month paying the least.

A Flathead Electric residential member using 1,000 kwh per month will pay a total monthly bill of $76.75 under the new rate schedule.

That compares to $92.60 a month for customers of Missoula Electric Cooperative and $85.40 with Lincoln Electric for the same monthly usage.

The most expensive regional power is at Beartooth Electric based in Red Lodge, where members pay $140.31 a month per 1,000 kwh.

Flathead Electric commercial members also will see a minimal increase in basic service charges.

The new rate schedule was outlined at Flathead Electric’s annual meeting on Saturday, an event that drew a crowd of about 1,000 people.

The co-op board decided last November to continue getting power from BPA through 2014 and has to decide by Sept. 30 this year whether the co-op will have BPA provide incremental power for the five years beyond its three-year commitment, Sugden said.

Last year the board considered a proposal to join the Portland-based Pacific Northwest Generative Cooperative and also discussed North Dakota-based Basin Electric Power Cooperative as an option for finding new sources of low-cost power. Both of those options now are “off the table,” Sugden said.

“There are groups of utilities looking at banding together,” he said. “The board now needs to decide if there is another source” for low-cost power.

Co-op trustees have been exploring several options to meet members’ power needs after BPA in October 2011 caps the amount of low-cost power it provides to Flathead Electric.

At the present time, all power used by the co-op comes from BPA, except for a small amount from its landfill gas project, Sugden said.

The BPA cap could be around 169 megawatts, while the landfill gas project generates about half a megawatt, he said. Flathead Electric’s projected growth rate is about two to three additional megawatts annually.

Options for additional power could include purchasing power on the open market or supporting local power projects such as the city of Whitefish’s hydroelectric project, or reducing the load further with additional conservation measures.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.