North Star Electric Cooperative’s board of directors approved an overall rate increase of 7.8% at the January 2025 board meeting.
This was necessary to address the impact of Minnkota Power Cooperative’s wholesale rate increase of 8.6% and the rising costs of electrical distribution equipment. For the last six months, North Star has taken an extensive look at all rate classes with outside consultants and our management team. We have not had a detailed rate review performed since 2008. Needless to say, many things have changed since then. Whether it’s the cost of a dozen eggs or a pound of hamburger, everything has been impacted, and your electric cooperative is not immune to these increases.
We do not take rate increases lightly. That’s why Minnkota and North Star Electric Cooperative work together to ensure rate adjustments are thoroughly vetted and assessed before action is taken by the member-governed boards.
Minnkota has worked alongside its membership to keep electric rates stable since 2017, even as prices on the materials to generate and transmit power began to skyrocket. Since 2020, the cost to build a mile of 69-kilovolt power line has risen 40%, and we’ve seen a 67% increase in the cost of transformers. And that’s just the start. Some material costs have risen more than 200%. For the sake of our members, we found efficiencies to ease that extra burden through the most volatile times. However, Minnkota has reached the point where a rate increase is the only way they can balance reliable service and financial responsibility.
North Star and Minnkota aren’t alone in facing supply chain and inflationary pressures. Many utilities in our region and across our nation are considering or implementing rate increases to recover the higher cost of materials, equipment and services.
North Star remains a competitive power supplier, and we are well positioned to continue providing safe, reliable and sustainable electricity.
As your general manager, I will always remember that we are driven by service, not profit. We only raise rates when necessary to be able to continue to provide
quality service to you, our member-owners. We will continue providing more details on the changes.
As always, our commitment to transparency continues. Feel free to contact your cooperative with any questions.
Stay safe, Kevin