Lincoln Electric Cooperative will raise its rates by nearly 11 percent later this spring to offset substantial increases in wholesale power rates.

The co-op’s board of trustees recently approved the rates, noting the increase has been driven solely by a 22 percent wholesale power increase from the Bonneville Power Administration that went into effect last October.

The vast majority of cooperative members — residential power users — will see their monthly basic charge increase $5, from $25 to $30; and their energy charge increase from 6.04 cents per kilowatt-hour to 6.55 cents per kWh, according to Lincoln Electric Manager Ray Ellis. Average residential members who use 1,350 kWhs per month will see their monthly bill increase $11.88.

The new rates are effective after the April 20 meter readings and will appear on bills received around June 1.

Other rate classes will see different average rate increases, with small commercial, large commercial and irrigation accounts going up 9.8 percent, and industrial accounts up 9.7 percent. Impacts will vary, depending on each member’s usage.

City street light and area light monthly fees will increase 9.8 percent. The cooperative’s 10 percent discount for low-income seniors and low-income disabled members will remain in effect for their primary service.

Overall, the rate increases will provide the cooperative with a 10.74 percent increase in annual revenues.

“The overwhelming driver of the increase is power supply costs,” Ellis said.

BPA’s increase translates into an additional $901,000 forecasted expense for Lincoln Electric for 2012.“

“Our January power bill from BPA shows the reality of the new rates,” he said. “Although [the co-op] purchased nearly 1.3 million less kilowatt-hours due to mild winter weather, our power bill still shot up over $59,000 higher. Cost increases of this magnitude simply cannot be absorbed by the co-op.”

Lincoln Electric is managing other controllable expenses to reduce rate impacts, Ellis noted. The 2012 operating budget is 4 percent lower than last year and includes a 7.5 percent reduction in wages and benefits due to a reduction in work force.

“We’re running a lean ship right now with two less employees than we had in 2011,” he said.

After spending millions of dollars the last several years upgrading the distribution system and replacing old cable, Lincoln Electric anticipates future work plans should put less strain on the co-op’s revenue requirements.

Under BPA’s new wholesale contract, the power marketing agency will revisit wholesale rates every two years, and already has let utilities know it is forecasting an additional 12 percent rate increase for the 2014-15 rate period, Ellis said.

Lincoln Electric’s 63rd annual meeting is Saturday, March 24 in the Lincoln County High School auditorium in Eureka, with registration at 8 a.m. and the business meeting following at 9 a.m.

The co-op serves more than 4,000 members over 1,125 square miles in northeast Lincoln County and northwest Flathead County, including the communities of Bissell, Olney, Stryker, Trego, Fortine, Eureka, Rexford and the West Kootenai.

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