Inland Power & Light Co., the Spokane-based electric cooperative, says it had net marginsequivalent to net incomeof just over $4.2 million in 2004, up 6 percent from the previous year. Its revenue, meanwhile, edged 2 percent higher to a record $38.4 million.


I think we had a real robust year in terms of construction activity and growth on the system, says CEO Kris Mikkelsen. Were going to have another good year this year, based on early indicators, she says.


Inland Power increased its net margins by $225,000 over 2003 and by $790,000 over 2002. It says it refunded $1.25 million in what are called capital credits to its member customers in 2004, which was up slightly from the previous year.


Capital credits are sums that an electric cooperative returns to its members in the form of checks, based on their energy usage and other factors, out of any revenue surplus above what it needs to cover operating expenses and capital expenditures. For more than a decade, Inland Power has refunded between about $1 million and $1.25 million in capital credits each year.


The cooperative sold 726 million kilowatt-hours of electricity last year, up 2 percent from 2003, and it reported revenue of 5.2 cents per kilowatt-hour, which was the same as the prior year.


Mikkelsen says Inland Power added 860 customers last year to boost its customer base to 33,600. The growth in its customer base was up sharply from the year before, but still below its peak annual growth of about 1,100 new members during the 1990s, she says.


In another indicator of Inland Powers financial health, Mikkelsen notes that the cooperative had equity of about $64.9 million at the end of last year, up more than $3 million from a year earlier, and long-term debt of about $20.7 million, down $473,000 from the end of 2003. That debt-to-equity ratio is really low for the industry, she says.


Mikkelsen says, though, that the cooperative probably will look at taking on more debt in the future to minimize an expected sizable Bonneville Power Administration rate increase in 2007 to the amount we think is prudent for the membership.


Inland Power has benefited from a long-term, fixed-price contract with the BPA, which markets power from the Northwests federal dams, but that contract expires in the fall of 2006. The cooperative expects to be hit with an initial wholesale price increase of 40 percent to 50 percent in its next five-year contract with BPA, under which prices wont be fixed, Mikkelsen says. That would equate to a retail price increase to its customers of around 20 percent, since the cost of buying power accounts for roughly half of the cooperatives total cost of doing business, she says.


Inland Powers new contract with BPA will become effective on Oct. 1, 2006, but Mikkelsen says the cooperative plans to keep its rates unchanged next year, regardless of how much its wholesale power costs rise on that date.


Also worrying Inland Power, as it looks ahead, is the Bush administrations controversial budget proposal calling for BPAs electricity rates to be raised to levels charged on the open market.


Mikkelsen contends that any sizable jump in rates triggered by that proposal would have a devastating effect on the cooperatives customers. Having studied the hurdles that the administrations proposal faces, she says, I honestly believe it has a pretty low probability of being successful.


She says Inland Power, which puts heavy emphasis on holding its rates down, continues to have among the lowest rates charged by cooperatives across the U.S., with an average customer monthly bill late last year of $76.20 for 1,500 kilowatt-hours.