Rochester Area Utility Customers Told To Brace for Rate Hike

Oronoco, MN (KROC-AM News)- Members of a Rochester-area utility cooperative are being told to brace for higher bills. 

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Rising fuel costs and inflation are being blamed for the rate hike and increased costs for customers to power and heat their southeast Minnesota homes. Dairyland Power, which sells electricity to 24 cooperatives and 15 municipal utility providers in Minnesota, Wisconsin, Iowa and Illinois is budgeted to increase their rates by 7% this year.

As a result of the Dairyland Power increase, People’s Energy Cooperative plans a 7% rate increase in 2023 to maintain its financial security, according to a letter sent to members from CEO Michael Henke. The cooperative can only control about a quarter of their operating costs and says the remaining 75% of costs are at the mercy of the market, according to the letter. 

Henke says the cost wire used in the co-op’s electricity distribution system increased by an average of 20%, the price of transformers has gone up by an average of 30% and the cost of diesel fuel that powers the co-op’s fleet of trucks has nearly doubled since 2020. The letter says the rate increase is required to allow the non-profit energy cooperative to maintain its financial security and reliable services to its members. 

Henke says the cooperative is working with a rate consultant to determine a rate that ensures the financial health of the cooperative while minimizing the financial impact to its members. Henke says members will have more details about the rate hike and when it will go into effect in the cooperative’s February newsletter. 

People’s Energy Cooperative serves 20,000 members in Olmsted, Dodge, Fillmore, Mower, Wabasha and Winona Counties.