Rate Adjustment for Small Commercial, Large Commercial and Large Power FAQ

 

Q1: Why are our electric rates under pressure this year?
A: We’re facing significant adjustments in wholesale power costs, which make up 69% of our total operating expenses. These adjustments are directly affecting our ability to keep rates stable for our members.

Q2: What is causing wholesale power prices to rise?
A: Both of our wholesale power suppliers (Great River Energy and Western Area Power Administration) have announced significant rate adjustments for 2025. These changes reflect the need for critical investments in grid infrastructure, increased maintenance costs, and compliance with state-mandated shifts to renewable energy sources.

Q3: How much is wholesale increasing?
A: Great River Energy has projected an 8.5% rate increase for 2025. This is expected to be a multi-year trend as they continue to invest in grid upgrades and infrastructure improvements.

Q4: What about the other wholesale power provider?
A: Our secondary provider, WAPA, has also announced rate adjustments, driven by higher costs associated with maintaining hydroelectric facilities and transmission systems. We're currently finalizing details and working on strategies to manage this impact.

Q5: Are these adjustments competitive compared to other utilities?
A: Yes, despite the adjustments, our wholesale power rates remain competitive compared to neighboring utilities and are still well below the regional average.

Q6: Why are these infrastructure investments necessary?
A: These investments are essential to building a more reliable, resilient, and sustainable energy grid. They help prevent outages, meet growing demand, and support the state’s transition to renewable energy, as mandated by state regulations.

Specific Impact on Commercial, Large Power, and Residential Accounts

Q7: How will this affect commercial and large power accounts?
A: Starting in July 2025, small commercial, large commercial, and large power accounts will see a rate adjustment due to the rising costs of wholesale power. The new rates will take effect in the August 2025 billing cycle.

Q8: Why is the rate increase only affecting commercial and large power accounts in 2025?
A8: Due to the nature of the rate adjustments, the focus is initially on commercial accounts because they typically consume more power, and their usage patterns are more closely tied to wholesale rate changes. Residential rate adjustments are planned for 2026.

Q9: What are the reasons behind the commercial and large power rate adjustments?
A9: These adjustments are necessary to cover rising wholesale power costs, which account for nearly 69% of our total operating expenses. Investments in strengthening the electric grid, increasing future capacity, and supporting renewable energy mandates are also major factors driving the increase.

Q10: Will residential members face rate adjustments in 2025?
A: No, the planned rate increase in 2025 will affect commercial and large power accounts only. However, residential rate adjustments are expected in 2026 due to ongoing cost pressures from wholesale power suppliers.

Q11: What about residential rate adjustments in 2026?
A: Residential rates will be adjusted in 2026 as we continue to manage rising wholesale power costs. More details will be shared closer to that time.

Q12: How will these investments improve the energy system?
A: These investments are designed to strengthen the grid’s resilience, protect against outages, and prepare for the challenges posed by climate change and growing energy demand. They are also key to meeting the state's renewable energy transition mandates.

Q13: How is the co-op working to minimize the impact on members?
A: While rate adjustments are never easy, we are committed to managing costs efficiently, making necessary investments in infrastructure, and ensuring that we meet the future energy needs of our members. We will continue to communicate openly and provide updates as we navigate these changes.

Looking Ahead

Q14: How will the co-op continue to manage costs moving forward?
A: We will remain focused on making prudent investments to maintain a resilient and sustainable energy system. Our goal is to balance cost efficiency with reliable service, while supporting the transition to renewable energy sources and complying with state regulations.

Q15: How is Itasca-Mantrap managing the rate changes?
A: We are working diligently to manage rising costs and minimize the impact of these adjustments. We remain committed to providing safe, reliable, and affordable electricity, and we will keep them informed about future changes. We greatly appreciate their understanding and support as we work to build a stronger energy system.

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