After over two years of maintaining stable electric rates by absorbing increases in the cost of wholesale power, the NLI Board of Directors took action to increase rates by an average of 3.2%, effective with the billings for January, 2004 usage. The rate increase is necessary to cover increased operating costs including fuel, insurance, taxes, and to cover a portion of a metering error committed by the Bonneville Power Administration (BPA) that resulted in under billing for a substantial amount of power NLI used over the past few years. NLI is obligated to pay BPA over $1 million for this power that has been delivered, but not billed.

For residential, seasonal, and small commercial customers, the monthly basic charge will increase by $1.00 per month (from $24 to $25). In addition, the energy charge will increase by an average of $0.0017 per kilowatt-hour. Although the exact percentage increase depends on electric usage, the monthly bill for a residential customer using 1000 kilowatt-hours will see a total increase of 3.2% or $2.57 per month.

The monthly basic charge pays for a portion of the Cooperative’s fixed expenses necessary to maintain the distribution system regardless of the amount of power used. A recent analysis of NLI’s cost of service shows that the basic charge should be about $30.00 per month to cover 100% of fixed costs. NLI’s fixed distribution costs per customer are higher than those of investor-owned utilities because in our rural service territory there are far fewer members per mile of line than in the more densely populated areas served by investor-owned utilities.

Over the past two years, NLI has maintained stable rates by absorbing increased wholesale power costs and deferring maintenance and system improvement projects. Deferring essential maintenance cannot be sustained over a long period of time because system reliability will be reduced. The Board and Management are deeply concerned about the impacts of rising expenses and uncertain wholesale power costs on our members. We will continue to manage our resources in the best interest of our members.