Inland Has No Power Struggle Despite Volatile Market, Local Cooperative Is Doing Fine, Leader Says

All is calm at Inland Power & Light Co., new General Manager Kris Mikkelsen said this week.

While other Northwest utilities wrestle with the stresses created by deregulation and volatile electricity prices, the Spokane-based cooperative has locked in supplies from the Bonneville Power Administration that should protect members from any significant rate increases, she said.

“We’re insulated from Bonneville’s current financial problems,” said Mikkelsen, who was appointed general manager last month after six months as interim head.

Former manager Richard Heitman moved to Hawaii to help organize a new cooperative.

Mikkelsen has been with Inland since 1981, when she took over as accounting supervisor. She had been in private practice as a certified public accountant after graduating from Eastern Washington University.

The Central Valley High School graduate had also attended the University of Idaho.

Mikkelsen said she, Heitman and Operations Manager Dave Clinton have focused on cutting costs and stabilizing rates for several years.

“We just have a corporate philosophy that you don’t spend a lot of money,” she said.

Inland, she noted, has fewer employees now - 90 - than it did when she was hired, yet membership has climbed 50 percent to about 31,000.

The cost-cutting efforts have paid off. Mikkelsen said rates have been rolled back 17 percent in the past three years.

And she said she is confident Inland will be able to keep future increases low because of the power supply contract signed with Bonneville two years ago.

Power expenditures consume about half of Inland’s budget, Mikkelsen said.

Inland, which gets all its power from BPA, will pay whatever rate is in place Oct. 1, 2001, for the next five years. And the company is guaranteed Bonneville’s lowest rate for years 2006-2011, she said.

Utilities who did not sign so-called pre-subscription agreements may be subject to increases imposed by Bonneville as it contends with higher power costs of its own, she said.

The agency is expected to release a proposal for dealing with those expenses today.

Mikkelsen said higher electricity prices have scuttled one Inland initiative, at least for now.

The Inland Empire Paper Co. planned to build a connection to Inland Power’s grid.

That link would have allowed the paper company, an Avista Utilities customer, to shop for electricity on the wholesale market. But a squabble over right-of-way issues delayed construction, and shortly afterward power prices soared.

“Anybody who can get out of buying power on the open market is doing so,” Mikkelsen said.

Although the project has been shelved, she said the cooperative is preserving a right-of-way in case power economics change.

Mikkelsen said the right-of-way dispute suggested Inland had to take a more proactive role in community and regional affairs.

She said Inland and other public power providers must unite to make sure the benefits of the Bonneville system, which provides almost half the electricity consumed in the Northwest, are not siphoned off by California and other states seeking lower-cost energy.

Inland is also looking for ways to share services with other utilities in the area, Mikkelsen said.

For example, she said, the Inland and Avista systems overlap in several areas, creating needless duplication.

Mikkelsen noted that Inland has begun providing night dispatch services for Kootenai Electric Cooperative in Hayden, Idaho.

“I think there’s a lot more of that that can be done,” she said.

Mikkelsen said the 1995 merger of Lincoln Electric into Inland was the best move the Spokane utility ever made, although she added that cooperation need not entail complete consolidation.

She said the cooperative is also constantly evaluating other products it might provide to its members. Fuel cells and photovoltaics are possibilities, she said.

Services that dovetail with its role as a utility are the most likely to succeed, she said.

Mikkelsen, who has shown up for work on off days with her two Newfoundland dogs in tow, said Inland has been a good place to work.

“There’s a great sense of wanting to serve the membership,” she said.