Member news: Rate increase planned

Over the past decade, EnerStar has strategically maintained low costs, resulting in only limited rate increases. This approach follows the adage, “Watch the pennies, and the dollars will take care of themselves.”

Yet, we are facing difficulties avoiding a rate increase due to a significant rise in the costs of materials required to construct and maintain our electric infrastructure. The cost of basic materials has increased from 16% to 93%. Additionally, we are also facing the challenge of rising interest rates.

Previous articles in this magazine have discussed the rising cost of wholesale electricity. Many factors are responsible for this increase, but one of the major causes is the closure of baseload power plants in favor of renewable energy sources. We want to emphasize our belief in an all-options approach to power supply. Renewable energy is important to the power mix. Still, baseload power, typically generated from coal or natural gas, is critical to keeping costs down and meeting the demand for electricity.

Enerstar vs Investor Owned Utilities

By controlling costs, we have been able to hold off on a rate increase for as long as possible. However, the cooperative will increase rates effective April 1, 2024, to remain financially stable. The average residential account will see a 6% increase in their monthly bill. Other rate classes will see a comparable amount. Updated rate schedules are available on our website at If you have any questions about rates, please call us at 1-800-635-4145.

We understand that rate increases can be frustrating, and we share your sentiment. However, we want you to know we didn’t take this decision lightly. We had several working sessions over many months to approve this rate increase. We considered various financial tools, including our most recent Cost-of-Service Study, which an independent consultant prepared. Both the management staff and board members actively participated in the rate review. After completing the process, we all agreed that the rate increase was necessary for the cooperative’s long-term financial health. However, we were still able to keep the rate increase below the recommended rates suggested by the Cost-of-Service Study.

Cumulative Increases

Earlier, I emphasized the importance of maintaining financial stability. The word “remain” is crucial here because your co-op’s strong financial position enabled us to withstand the unexpected cost of around $400,000 caused by last year’s Derecho. In addition, we have reduced our long-term debt by $2 million since 2020. Over the past few years, we have consistently worked to improve our distribution system and fleet, resulting in noticeable service reliability improvements. Your locally controlled cooperative accomplished all this with minimal rate increases. However, we have reached a point where we must take action to remain financially stable.

With the closing of this article, I encourage you to look at the graph above. Despite this increase, EnerStar’s total rate increases for the last several years are worth noting. We are 25% below the average cumulative increase for the Midwest. Even better, we are 40% below the average cumulative increase for the nation.

While we all believe any increase is too much if it can be avoided, when forces beyond our control require increases (inflation, power costs, etc.), there may be comfort in knowing we are holding the line more than most in the region and nation.