News Releases
FEC Mitigates Risk of Destructive Activity

What is being done to secure the power grid against terrorism at Flathead Electric Cooperative?

That was a question posed by a member at the FEC Annual Meeting in March, and it’s a timely one because the issue has come to the forefront with a recent report in the Wall Street Journal. The report projects that the U.S. could suffer a coast-to coast blackout if saboteurs knocked out just nine—four in the East, three in the West and two in Texas—of the country’s 55,000 electric-transmission substations on a scorching summer day. The article went on to say the forecast is based on a FERC (Federal Energy Regulatory Commission) analysis indicating the loss of those key substations could plunge the country into darkness for weeks, if not months.

Some federal officials say those conclusions overstate the grid’s vulnerability, and Flathead Electric’s Director of Engineering, Jason Williams, says he is skeptical as well. “Let’s look at what happened in California, for example. Snipers shot holes into the cooling systems sustaining 17 giant transformers that supply all of Silicon Valley. Although the transformers were destroyed, Pacific Gas & Electric (the utility that operates those transformers) was able to avoid a large scale outage by rerouting power from another source.”

Williams says smaller utilities, like Flathead Electric, are less likely to be the target of terrorist activities, because while an attack on our system would impact members in this service territory, it would have no effect on the national grid. “Unlike the massive utilities that intertie with each other for generation and transmission, we are isolated within our own infrastructure.”

Some of the most difficult decisions facing utilities today concern security measures and weighing the costs versus the benefits. Flathead Electric could fortify its substations like Fort Knox-increasing rates drastically-but if the transmission system that delivers our power supply were compromised, it would all have been an effort in futility.

That said, however, the Co-op has a strong culture of safety and security and continuously evaluates system protection. “We are both proactive and reactive to mitigating risks regarding changing technologies, regulations and all of the various industry dynamics” says Williams. “We enforce all required codes, we have contingency plans in place and two-way communications. We regularly inspect and monitor our substations and equipment and we have surveillance of Co-op property. Our data is backed up daily at a separate undisclosed location; we have alternate meeting sites and otherwise do everything we think makes sense financially and practically for Flathead Electric.”

Williams says we are more susceptible to outages from weather events than we are from terrorist activity, but either way power would be restored in a conventional manner. “There’s no guarantee on how quickly we could reenergize, depending on the magnitude of the situation, but we have redundancy built into the system. So we would identify the problem area, redirect power and activate one line at a time, just as it would be done on a national level. If need be, we would request aid from a neighboring utility and borrow a transformer or other supplies if ours were damaged. There’s strength in numbers and while we Montanans are typically very independent and resourceful, we also extend our cooperative principles to our neighbors, be they in our local communities, throughout the region, or to our fellow Americans across the country. The adage is true that “united we stand.”

Co-op Breaks Energy-Use Record

Flathead Electric broke an energy-consumption record, when temperatures dipped well below zero and winter storms broke out last month.

From midnight Thursday, December 5, to midnight Friday, December 6, members used 6,783 megawatt-hours of power! The previous record was 6,774 for a 24-hour period back on December 16, 2008.

“We peaked on that Friday between seven and eight in the morning at 315 megawatts, where as our average for this time of year is around 280.” That’s according to John Goroski, Director of Regulatory Affairs at the Co-op.Goroski went on to say that obviously higher usage means higher bills. “Members are sometimes taken aback by their heating bills in the winter months, not realizing just how much energy they consume, particularly during cold spells. That’s another reason we consistently promote our energy efficiency programs.”

The “Perfect Storm” Results in Record Number of Calls to the Co-op

Member Service Representatives handled more than 800 calls in one day, as the result of a winter snow storm, compounded by other coinciding factors.

“It was like the perfect storm”, says Teresa Miller, FEC’s Supervisor of Member Services, of that second day in December. “Our call volume always goes up at the beginning of the month because that is also the start of our billing cycle, but we also had the first snow storm of the season. Add to that the fact that we had been closed for a couple days for Thanksgiving and the call center got exceptionally busy.”

Then there was the credit and debit card scare. A surge in bank-account fraud in the Co-op’s service territory left members worried about their various accounts and many called the Co-op with notification that they had cancelled their credit and/or debit cards. Miller says despite the fact that people had various issues to concern them that day, things went smoothly. “Everyone was patient and friendly and we were able to take care of their needs in a timely manner. We knew we processed a lot of calls that day, then learned that at 803, we set an all-time record!”

Johnson Named General Manager

When Mark Johnson was growing up in Great Falls, he never envisioned a future in the electric industry. But Johnson, who went to the University of Oregon to become a CPA (he also earned an MBA from the University of Montana), says he feels very fortunate that his career turned out the way it did. “After working at an accounting firm for several years, I was hired as Flathead Electric’s Finance Director in 1999. I didn’t know exactly what the industry would entail, but I knew right away that this was a great place to be. I’m proud to be a part of the Cooperative and appreciate the support I’ve received from the Board of Trustees and staff.” Johnson assumes the position of General Manager as of November 1, after serving eight-years as Assistant General Manager. Retiring GM, Ken Sugden, says this was a natural progression for Johnson and is content to pass the baton. “Mark knows the ins and outs of the electric utility business and is keenly aware of the challenges ahead. He’s very involved in all aspects of the industry and serves on several state and national boards to keep informed on power supply, technology, and regulatory issues impacting Flathead Electric.” And those regulatory issues are what Johnson views as the greatest challenge now and into the future. “We operate in an ever increasing regulatory environment and I don’t expect that to change. In fact, we can anticipate further governmental mandates down the road. The other significant challenge for us is to serve a continually growing load base with a cap on our allotment of federal hydropower. New and alternative energy resources are generally more expensive.” One thing that is not a challenge Johnson says, however, is the talented Flathead Electric workforce. “Ken did a great job of putting the right people in the right positions here and it’s an extraordinary team. I also made important connections region wide through Ken’s mentorship. He was instrumental in my professional growth and really paved the way for a smooth transition.” Besides participating in industry relations, Johnson is also very involved with the local community. He is on the Board of Directors for the Kalispell Chamber of Commerce, serves as Treasurer on the Board of Directors for the Flathead Food Bank and is recognized as a frequent official for local high school football games. “Our group covers high school games from Eureka to Bigfork.” In his rare free time, Johnson likes boating, golfing and being with his family. Although Johnson never imagined he would ultimately serve an electric cooperative at the start of his career, now he says he can’t imagine not being involved in this industry. “I enjoy being part of a people-based organization. I also appreciate having to be nimble, because this industry is complex and constantly evolving—rarely a dull moment. I may not have started out in this business, but I sure appreciate all the fortuitous bounces that led me here to Flathead Electric.”

Co-op acquiring energy from the Stoltze bio-mass plant as of October 1st

Implementation of a Power Purchase Agreement (PPA) between Flathead Electric Co-op and F.H. Stoltze Land & Lumber Company began October 1st. The official term of the agreement, signed in February of 2012, is for twenty years.

Entering into the long-term agreement assisted Stoltze in securing the necessary finances to replace an antiquated boiler and construct a biomass-fueled electric generation facility at their plant near Columbia Falls. Flathead Electric will purchase an annual average of up to 2.5 megawatts of power at a wholesale rate, and will also receive Renewable Energy Credits in the transaction.

Chuck Roady, Vice President of Stoltze, says the company is very pleased to partner with Flathead Electric: “Not only is this agreement great for the community, but it will provide a renewable energy source and also help manage the forests.”

FEC General Manager, Ken Sugden, says he too, believes the arrangement will be mutually beneficial, adding that both parties had been negotiating in good faith for years. “Stoltze will be able to maintain and strengthen local job opportunities and Flathead Electric will be able to efficiently distribute electricity in our service territory. Although a small component, this purchase agreement also adds to the Co-op’s renewable energy portfolio, without financially overburdening our members.”

Investment in energy efficiency will keep cost of energy lower
for all of FEC members for years to come

Flathead Electric Co-op has presented Plum Creek Timber Company with a check for $386,635 in a transaction made possible through an energy efficiency incentive program sponsored by the Bonneville Power Administration. The program encourages industrial customers to install energy-saving technology by providing significant rebates toward the cost of the new systems.

A year in the making, Plum Creek recently completed a compressed air upgrade at the Columbia Falls Sawmill that will save an estimated 1,765,185 kilowatt-hours per year. Cost of the project was $522,337 and included the installation of a new 300 Horsepower variable frequency drive air compressor, advanced digital controls, a 1,500 gallon receiver and an assortment of peripheral equipment.

Plum Creek was one of the first in the Northwest to participate in the FEC/BPA Energy Smart Industrial program, and has completed 11 custom projects to date (for an estimated annual energy savings of 13,931,212 kilowatt hours) and has received incentives totaling $2,181,267.59. Plum Creek management has incorporated energy efficiency into operations and maintenance decisions and participated at all their Montana business sites, including the Evergreen Complex, Columbia Falls Medium Density Fiber Board, Sawmill and Plywood. Future projects are planned as well.

“Plum Creek is committed to reducing the impact of our operations”, said Tom Ray, Vice President of Montana Operations. “By working with the BPA and FEC rebate program, we were able to reduce our energy consumption and cover a greater part of the costs of the new system.” Don Newton, Flathead Electric Key Account Representative, said the Plum Creek project is the largest stand-alone projects FEC has undertaken with an industrial customer.“Our goal is to encourage other members to invest in technologies that will help them achieve energy efficiencies and reduce costs”, he said. “We consider this project to be a great example of what can be accomplished.”

At the current level of operation, it’s estimated that this latest upgrade at the Sawmill will reduce Plum Creek’s annual energy costs by more than $54,000.

The Cooperative Difference

Your Cooperative’s board of directors and employees would like to thank Flathead Electric member/owners for rewarding the Co-op with a score of 81 out of 100 in the recent American Customer Service Index (ACSI) survey. Your feedback compares Flathead Electric Cooperative favorably to the Cooperative Difference Survey National Benchmark group - also scoring 81. Flathead Electric outperformed on several levels relating to aggregate scores for investor-owned utilities, municipal electric companies and the energy utility sector, which all scored in the mid to high 70s.

Developed by the American Society for Quality, by the University of Michigan School of Business and CFI group that measures customer satisfaction in 200 leading corporations, the ACSI is the only independent national standard of customer satisfaction available in the United States. Flathead Electric uses this survey to weigh against other utilities and make sure we are aligning our goals to continue doing what we do well and to improve in areas where we may be falling short.

401 members participated in the survey and had the opportunity to offer additional comments to several of the questions. The Co-op scored relatively strong in areas such as helping members manage their costs, keeping members informed when working in their area and communicating to them about rising costs. Demographic information offered valuable insights to the technology attributes of our membership, finding that the majority of members own either a desktop or laptop computer; 34% own a “smart phone” like a Droid or iPhone, and 46% of membership participates in online social networking sites. We were pleased to find out that 79% have taken steps to reduce home electricity usage, and more than 80% of members have at least one energy saving compact fluorescent bulb in their home- with over 50% having six or more. 70% of members read at least some of this newsletter. Thank you!

While this is a customer satisfaction survey, Flathead Electric Cooperative’s member/owners are much more than just customers. Ken Sugden, FEC General Manager states: “This is an important distinction with Cooperatives, and one of the most significant findings in this survey was that 57% of our membership views themselves only as a customer, particularly younger members of the Co-op. We definitely need to better communicate to everyone the fact that member/owners have a voice in how this Co-op operates and emphasize that this is a not-for-profit business looking out for everyone’s best interests to keep rates stable and electricity reliable. “

That is the Cooperative Difference

CleanHydro Highlights Hydropower and River Values

Flathead Electric Cooperative’s primary power supply is hydropower purchased from the Bonneville Power Administration. We are extremely fortunate to have this low cost, clean resource. It is important for all of us to understand what dynamics exist that could put this essential resource in jeopardy, however, and we will do our best to keep you informed.

A public education effort, called CleanHydro, is being coordinated by Northwest RiverPartners , an alliance of utilities, ports, businesses and farming organizations, that advocate for a balanced approach to managing the federal hydropower system on the Columbia and Snake Rivers. Other regional and national organizations with a stake in hydropower and river commerce are also supporting the effort to educate the public about these resources and their benefits.

Terry Flores, Executive Director of RiverPartners, noted that the organization’s public opinion surveys show a lack of understanding and appreciation for the tremendous value that the Columbia and Snake River system brings to the Northwest, both economically and environmentally. “For those of us who grew up in the Northwest, it was always a given that hydropower was the premier renewable energy source; and the energy production benefits of our dams were also well known.”

Today, Flores says, there is a whole new audience that needs to be educated: “Many people have moved into the Northwest from other places, and younger generations know very little about hydropower and the river system’s contributions. They didn’t grow up with them. Hydropower doesn’t have the kind of ingrained recognition it once did. So in a sense, we’re reintroducing – and reminding – the public of the tremendous value these resources bring to our lives.”

And with a changing energy industry, hydropower has been overlooked in recent years. “We’ve seen huge growth in other renewable sources of energy, particularly wind. These have been so prominent in the popular media that it’s given rise to a perception that they are the only renewables out there,” Flores said. “We just want to make sure that hydropower is considered in the same context.”

Besides accountingfor 90 percent of the region’s renewable energy, the system of dams and locks on the Columbia and Snake Rivers create a river highway allowing billions of dollars of goods to be transported by barge, creating thousands of jobs and boosting the economy. The hydropower system allows crops grown by local farmers to feed the Northwest and the world. “We have a great story to tell,” Flores noted. “It simply hasn’t been getting out – now it will.”

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FEC Gas-To-Energy Facility among Top in Nation

“Flathead Electric’s gas-to-energy facility has the highest uptime capacity in our fleet and one of the highest in the nation.” That’s according to Carl Cortez, Project Director for SCS Energy.

SCS Energy, which specializes in landfill projects on an international scale, installed the system in 2009 and continues to operate the facility at the Flathead County Landfill. Citing a successful business partnership, the FEC Board of Trustees has voted unanimously to renew their contract.

“Initially, this project operated at roughly 96% of capacity and that figure has grown to 99% so far in 2012.” That’s remarkable, Cortez says, especially in light of the extreme weather conditions here in northwest Montana.

The gas-to-energy facility has also surpassed power production expectations:
“We’ve gone from producing enough power to energize 900 homes in the Flathead Valley up to approximately 1,600 homes, which is ahead of where we anticipated performance to be at this juncture.”

Funded through Clean Renewable Energy Bonds (CREBS), awarded to Flathead Electric in the amount of $3.5 million, the system (the first of its kind in Montana) utilizes a vacuum system to draw the methane gas from the waste within the landfill. Once the gas is captured, it is filtered to remove liquid and particulates, then burned in a 20-cylinder engine. The burning methane drives a 1.6 megawatt electric generator, connected directly to Flathead Electric’s distribution system.

The process has additional value, in that it allows the Solid Waste District to be in compliance with environmental mandates, by preventing methane (a greenhouse gas more potent than carbon dioxide) from escaping into the atmosphere or leaking into groundwater under the landfill. Another significant bonus is that since methane gas results from decaying garbage, there will continue to be an ample supply of fuel, as the landfill expands into the future.

Embrace Your Blinks

Okay, so asking members to actually “embrace their blinks” may be a stretch (resetting clocks is a hassle after all), but it is important to at least understand why your lights sometimes dim or blink, especially during inclement weather. The power lines that serve your home have a variety of protective devices designed to keep your power on during storms. There are several reasons your lights might blink during a storm, but the most common cause is tree movement. Despite our best efforts to keep trees near our lines trimmed on a regular basis, strong winds can cause those trees to make contact with wires. When that happens, your lights may dim, or you might lose power for a few seconds as the system operates to identify and clear the problem. Without the protective equipment, members could experience a prolonged outage instead. If you have an ongoing reason for concern however, don’t hesitate to contact your Cooperative.

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Updated: Thursday, June 12, 2014