Growth continues for Yellowstone Valley Electric Cooperative but at about half the rate of what it used to be. Most of that growth is happening in the area between Billings and Laurel, reported Terry Holzer, Manager, at the 73rd Annual Meeting of the cooperative in Billings last week.

With plans to retire after 32 years as manager, Holzer said that this annual meeting will probably be his last.

The $68 million will enterprise that is YVEC grew about $2 million in 2010, compared to about a half million decline in the recession-ridden 2009. The company added 327 meters and replaced 371 poles. They now have 16,992 connections throughout the system which serves a six-county area.

As the cooperative has had to move to more expensive power with the ending of its Bonneville Power Administration contract, they raised rates in January, 4.5 percent. The more expensive power from PPL has raised power costs $750,000 annually.


Rates may have to be adjusted again later this year, said Daniel Swartz, President of the Board of Trustees, depending on the outcome of its litigation with Southern Montana, a generating and transmission company of which YVEC is a member along with other cooperatives.

YVEC filed suit against Southern Electric in 2008. The trial date was changed from April to November 2011, following the failure at an attempt at mediation last year.

The purpose of the case is three fold, according to Holzer:

--to end YVEC's membership in the generation and transmission company,

--to terminate their current power supply contract and recoup the low cost power supply with Western Power Administration that was transferred to Southern Electric.

--to recover investment in Southern Montana over the past seven years.

"If we are successful," said Holzer, "we hope to lower our risk related to power supply. We want to mitigate our future cost exposure by being with a larger generation and transmission company that has more members."

Power costs dwarf all other costs," said Holzer. Sixty-two percent of their costs is the cost of power – it used to be 48 percent.

The company spent $16 million on power in 2010 compared to $13.5 million in 2009. But even at that YVEC remains a very efficient provider for its customers, said Holzer. YVEC's costs per customer is $329, compared to the average cost of peer companies of $464.

"Our management has worked hard this past year in holding electric rates at current levels," said Swartz.

Part of that effort has been to bring on-line power that is being generated by MDU from their methane gas recovery project at the Billings landfill. YVEC completed the Hillcrest Substation in Blue Creek to facilitate the load, which has "the potential to become the largest load on YVEC."

The company has also dropped overtime hours by 50 percent which means that they are providing more reliable service to members, said Holzer.


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