Capital Electric proposes 8% rate increase for 2027 - KFYR

As the new year approaches, your electricity bills may rise once more, and a regional utility cooperative is explaining the reasons behind the adjustment. Capital Electric Cooperative is proposing an 8% revenue increase effective Jan. 1, 2027, as reported by KFYR. Officials say the median residential bill currently sits between $135 and $140 a month, meaning members would pay roughly $11 more per month under the new proposal.

“We started (increases) in ’23 and we’ve had a rate increase every year since 2023,” Business Manager Luke Steen said.

Wholesale Power Driving the Hike

According to Steen and General Manager Paul Fitterer, the upward adjustment stems primarily from wholesale electricity expenses, which represent the costs Capital Electric incurs for power prior to residential distribution. The wholesale portion makes up about 70% of the co-op’s overall expenditure, establishing it as the largest financial driver behind the adjustment.

Capital Electric buys power through Central Power Electric Cooperative, sourcing about 90% from Basin Electric Power Cooperative and 10% from the Western Area Power Administration off the Garrison Dam. Fitterer noted that building new power plants today costs far more than it did when the current generation fleet was built decades ago. Costs have risen while power availability has tightened, making new generation significantly more expensive.

“I don’t think I’ve seen this strong of year over year over year increase,” Fitterer said, drawing on his 22 years with Capital Electric. Steen added that the co-op’s own delivery costs are climbing too, noting that the cost of conductors, utility poles, and transformers has risen exponentially since COVID.

The Power of a Single Half-Hour

A major piece of that wholesale bill comes down to timing. It is not just about how much power members use overall, but precisely when they use it. About 60% of what Capital Electric pays to its wholesaler hinges on a single half-hour peak every month.

That monthly system peak—the moment when everyone on the grid uses power at the same time—sets a demand charge that dominates the bill. To address this, the co-op utilizes a four-part rate designed to show members exactly where costs originate. The On-Peak Demand component is slated to see the biggest increase in 2027.

“We’re really trying to just be as transparent as possible about where our costs come from,” Steen said. “If you can help us prevent that cost, we want that full benefit to come through to you.”

Members can adapt by shifting their energy use off-peak, enrolling in load control programs, or monitoring peak alerts through the co-op’s forecast tool.

Nonprofit Structure and What Comes Next

Operating as a nonprofit cooperative, Capital Electric has its rates set by a nine-member board elected by its own members. Both Steen and Fitterer emphasized that the cooperative runs on thin margins and must meet strict lender financial ratios.

Capital Electric proposes 8% rate increase for 2027 - KFYR

“We run very thin margins,” Fitterer said. “We attempt to minimize the impacts of every year rates to be as low as possible for our members.” He added that board members feel these adjustments personally because they pay the exact same rates and live alongside the neighbors experiencing the hikes.

Looking further ahead, wholesale partners are hopeful that costs could plateau and normalize by 2028 once the current build cycle for new generation and transmission projects wraps up. In the meantime, co-op leadership encourages members feeling the financial sting to reach out for a free home visit from the Energy Services team.

“If you’re a member and you felt the sting of these rate increases, please don’t hesitate to reach out,” Steen said.