Rate Adjustment Q & A
Q. Why is my rate increasing?
A. On November 20, 2025, the Cooperative's Board of Directors approved an adjustment to electric service rates and charges, effective January 1, 2026. This adjustment is expected to increase annual revenues by approximately 6.9% with the monthly impact varying for each member-owner based on individual electric usage and rate class.
As previously communicated, this change is driven primarily by rising wholesale power supply costs-which have increased by 10.5%- as well as adjustments resulting from our recent cost of service study to ensure all rate classes are paying their fair share. Nearly 71% of the Cooperative's total expenses are directly tied to wholesale power.
Q. What is the monthly access fee, and why is it increasing?
A. The monthly access fee helps cover the fixed costs of delivering electric service to your home or business- from the meter back to the substation- regardless of how much electricity is used.
Our recent cost of service study showed that the current access fees in several rate classes were not fully covering their share of fixed cost. Increasing the access fee helps close that gap and reduces revenue swings caused by factors the cooperative cannot control, like weather.
While the updated fee still does not fully recover all fixed costs, it moves us toward greater long-term financial stability. It also allows the Cooperative to place more emphasis on encouraging efficient energy use through incentives and energy-saving programs for our member-owners.
Q. What are the fixed costs associated with providing service?
A. Fixed costs are the expenses required to deliver safe, reliable electricity to you 24 hours a day, seven days a week, 365 days a year, regardless of how much energy is used. These include:
-
Poles, wires, transformers, and other equipment that make up the distribution system
-
Trucks, bucket trucks, and other heavy equipment
-
Interest and depreciation, along with overhead and the materials needed to complete daily work- from vehicle fuel to tools
Fixed costs account for roughly 11% of the Cooperative's total expenses. A large portion of these costs have traditionally been recovered through the first block of the kilowatt-hour charge. This means the revenue needed to cover fixed costs depend heavily on kilowatt-hour sales- which rise and fall with weather, economic conditions, energy efficiency efforts, and personal usage habits.​
Q. Is everyone's bill increasing by the same percentage?
A. No. Rates are broken out by rate class to ensure all member-owners are treated fairly and pay as closely as possible to the actual cost of providing their service. This prevents one group of members from subsidizing another. As a result, the percentage changes vary by rate class.
The overall increase is driven primarily by a 10.5% rise in wholesale power supply costs, which make up about 71% of the Cooperative's total expenses.
In addition, the rate structure for Large Power accounts is being updated. We are transitioning from billing based on installed kVA to billing based on actual kW usage. This change reduces administrative burden and helps ensure the Cooperative does not lose fixed-cost recovery for accounts with a high kVA-to-kW ratio, resulting in a more accurate and equitable approach to billing.
Q. When will this new rate take effect?
A. The increase will apply to your usage beginning on January 1, 2026.
Q. Is becoming more energy efficient and using fewer kilowatt-hours still a good thing?
A. Absolutely. Improving energy efficiency in our homes and businesses is good for the environment, supports a more reliable electric grid, and is the right long-term approach for managing energy costs. Our incentive programs help make efficiency upgrades- such as improved appliances and heating/cooling systems- more affordable, which reduces overall energy use and can lower the number of kilowatt-hours billed each month.
We also have a robust load management program that helps members save money by temporarily shifting electric use away from peak-demand periods, such as by interrupting water heaters. And for added control convenience, we offer SmartHub, a free online tool that lets you monitor and track your energy use in real time.
Q. Does Iowa Lakes Electric Cooperative offer any programs to make paying my bill easier?
A. Absolutely. We offer a number of options to help you better manage your electric bill. Our budget-billing program is a helpful way for you to effectively plan and balance your energy spending. Using this service, you can avoid the peaks and valleys caused by seasonal fluctuations in energy use. You can also have your energy payments automatically withdrawn each month from the account you designate. Using our auto pay service, you save money and time!
Q. I'm on a fixed income. Where can I seek payment assistance?
A. There are many local agencies that provide assistance throughout the year for those in need. For more information, please call 800-225-4532.