Powering Forward: How Rising Wholesale Costs Impact Our Rates

By: Steve Johnson, President and CEO

As I continue to settle into the Park Rapids area and my role as President and CEO at Itasca-Mantrap Electric Cooperative, one of my primary focuses is evaluating the rates and rate classes we are utilizing. As with most cooperatives, we cover a large geographic area with a diverse membership base, and the way our members use electricity varies greatly. Despite the hard work of our board of directors and staff in stabilizing our rate adjustments, we are facing increased pressure this year due to rapidly rising wholesale power costs.

Both Itasca-Mantrap’s wholesale power suppliers, Great River Energy (GRE) and the Western Area Power Administration (WAPA), have announced significant rate increases for 2025. A large percentage of our annual budget is dedicated to purchasing power for our members, so these changes from our suppliers have a direct and substantial impact on the stability of our rates as we move forward.

GRE, our primary wholesale power provider, has projected an 8.5 percent rate increase for Itasca-Mantrap in 2025. We anticipate additional increases from GRE over the next three years, as they continue to invest in critical infrastructure to strengthen the electric grid and expand future capacity within our service area. These investments are essential to ensuring a reliable and sustainable energy future, but they also come with additional costs to our cooperative.

WAPA has also announced rate adjustments for 2025. While we are still working through some details with WAPA, we have been notified of a shortfall in our energy allocation, which is contributing to increased costs. As a federal power provider, 

WAPA’s rates are influenced by the cost of maintaining its hydroelectric facilities and transmission systems. These changes are part of WAPA’s ongoing commitment to providing reliable, affordable electricity to rural communities while ensuring the sustainability of its infrastructure.

Although rate increases are always a challenge, it is important to note that both GRE and WAPA’s rates remain competitive compared to neighboring utilities and are well below the regional average for wholesale electricity.  Looking ahead, the investments made by GRE and WAPA are crucial for building a more resilient and sustainable energy system. While rate increases are never easy, they are necessary to maintain and improve the reliability of the electric grid and support the transition to renewable energy sources, as mandated by state regulations.

So, what does this mean for Itasca-Mantrap members? These rate adjustments from GRE and WAPA will directly affect our future rates as wholesale power costs represent nearly 67 percent of our total operating expenses annually. We are currently assessing the impact of these changes and working diligently to minimize the effects on our members.
  
At Itasca-Mantrap, we remain committed to providing you with safe, reliable, and affordable electricity. Our priority is managing costs efficiently while ensuring that we have the infrastructure and resources to meet your energy needs now and in the future.  We appreciate your understanding and patience as we navigate these changes. Itasca-Mantrap’s mission remains steadfast: to “Serve Our Members” with excellent service.