HELENA -- If you think your electric bill has been defying gravity lately, you're right: NorthWestern Energy, which serves 320,000 customers in Montana, still has the highest rates of any major utility in the region.

As of Friday, rates for NorthWestern's residential customers stood at 9.59 cents per kilowatt hour (kWh) -- a full penny higher than the second-highest rate and 60 percent more than the lowest-cost utilities in our neighboring states.

That's a monthly bill of $81.58 for a household consuming 800 kWh, including the flat monthly "service charge" of $4.86.

NorthWestern's rates in Montana have been the highest in the region for much of the last year.

But those rates have climbed ever-higher in the past few months as the utility phased in the cost of a new, more expensive contract to buy power from PPL Montana that takes effect July 1.

"We intentionally set it up to be very gradual, so that we could transition into a more stable cost structure for customers," NorthWestern spokeswoman Claudia Rapkoch said late last week.

In fact, the day the new contract takes effect, NorthWestern expects to reduce its rates slightly to 9.39 cents per kWh, because the gradual increases over the past few months ended up collecting more money than the utility needed to cover the costs, she said.

Rapkoch said the main reason for NorthWestern's high rates is pretty simple: It's the only major utility in the region that doesn't own any power plants, which often provide electricity at costs below the market price.

In the wake of utility deregulation, NorthWestern's predecessor, Montana Power Co., sold its power plants to PPL Montana in 1999.

That decision means NorthWestern must buy from the market all of the power needed to serve its electric customers -- and that regional market has been trending upward for most of the past several years.

"We're the only utility in the region that is completely subjected to market rates," Rapkoch said.

She also said NorthWestern isn't making any money off the rising prices, because it just passes that cost on to the consumer. NorthWestern makes its money on the delivery costs, the rates for which haven't increased since 2000.

"That is one of the hardest things to communicate to customers: Even though their bills have increased due to (electricity) supply costs, that money doesn't end up in NorthWestern's pocket," Rapkoch said.

However, NorthWestern does plan to ask for a rate increase later this year on its delivery charges, potentially increasing total rates further.

Most utility managers in the region expect the upward trend of electricity prices to continue, as demand for power is on the rise and supply isn't necessarily keeping pace. They also note the push for more "clean" or "renewable" energy, which sometimes can be more costly.

The Lee Newspapers State Bureau surveyed electric rates for residential customers at a dozen major utilities in Montana, Idaho, South Dakota, Wyoming, Washington, Oregon and Utah.

Here's a quick look at what it found:

n At 9.59 cents per kWh, NorthWestern has the highest rate of any utility. The second-highest is Portland General Electric, at 8.53 cents per kWh. NorthWestern rates had been down to about 8 cents per kWh a year ago, but have climbed fairly steadily since then.

n The lowest rates in the region are at Seattle City Light, a municipal utility, and Avista Utilities of Spokane, Wash., a private utility serving eastern Washington and north Idaho. Both are charging customers about 5.9 cents per kWh. That rate is for Avista's Washington customers only.

n For most private utilities in the region, rates in the past 18 months have increased anywhere from a few percentage points to as much as 25 percent. However, the larger increases are because of last week's cancelation of a Bonneville Power Administration credit primarily benefiting utilities in Oregon, Washington and Idaho. That change led to immediate increases as high as 13 percent.

BPA canceled the credit in response to a court decision, which the utilities say they will appeal.

n For large co-ops and publicly owned utilities, however, rates have remained the same or decreased in the past year. These utilities often buy most of their power from BPA, which produces low-cost hydroelectric power.

Among them is Flathead Electric Co-op in northwestern Montana. The co-op, which serves 46,000 customers in Kalispell, Columbia Falls, Whitefish, Libby and surrounding areas, reduced its rates earlier this year from 5.9 cents to 5.8 cents per kWh and hopes to reduce them more in the future, spokeswoman Stephanie Wallace said.

When Montana passed its utility deregulation law in 1997, Montana Power Co.'s residential rates were about 6 cents per kWh, which was somewhere in the middle of the pack for the region. NorthWestern bought MPC's utility operations in 2002.

Since a rate freeze for NorthWestern's Montana customers ended in 2002 and the company had to buy its power on the open market, those rates have since climbed nearly 60 percent, making them the highest in the region.

At the same time, Montana's utility deregulation law exempted the state's other major electric utility: Montana-Dakota Utilities, which has about 24,000 customers in eastern Montana.

In 1997, MDU rates in Montana were about 7 cents per kWh. Now, 10 years later, they are unchanged DASH although MDU officials said they'll be asking for a rate increase this month. It will be their first electric rate-increase request in Montana in 20 years.

This year, the Montana Legislature passed a law allowing NorthWestern to build or own its own regulated power plants again and dedicate that power to its Montana customers.

The company was the driving force behind the measure, saying ownership of power plants could partly undo deregulation by giving customers a regulated, reliable source of electricity at a stable cost.

Rapkoch said NorthWestern has just begun to evaluate what type of plant or plants it may choose to build.

"We think, going forward, it will get us back in line with some of those other utilities (in the region), but it's not going to happen overnight," she said. "It's going to be a long time before we see that sort of stability catch up to our customers."