Bismarck residents could see their monthly utility bills rise again starting January 1, 2027, as Capital Electric Cooperative moves forward with a proposed 8% revenue increase. For the average household, this shift translates to an additional $11 per month on a bill that currently sits between $135 and $140. According to a report by KFYR, this latest adjustment marks a continuation of a challenging trend for the local co-op, which has implemented rate hikes every year since 2023.
The Wholesale Power Pressure
At the center of this financial adjustment is the rising cost of wholesale electricity. Because the co-op does not generate its own power, it relies on Central Power Electric Cooperative, which sources roughly 90% of its energy from Basin Electric Power Cooperative and the remainder from the Western Area Power Administration. Business Manager Luke Steen noted that wholesale power accounts for approximately 70% of the co-op’s total expenditures, making it the primary driver of the proposed increase.
The economics of energy generation have shifted significantly in recent years. General Manager Paul Fitterer, who has served at the co-op for 22 years, pointed to the rising capital costs of building new power plants compared to the infrastructure built decades ago.
“Costs have gone up and power is less available,” Fitterer said. “And so as they have to create new power plants today, it’s much more expensive than it was 20, 30 years ago.”
Rising Material Costs Pressure Capital Electric Margins
Beyond the price of the electricity itself, the cooperative is contending with the escalating cost of maintaining the local grid. Since the onset of the COVID-19 pandemic, the prices for essential materials—ranging from conductors and poles to transformers—have seen exponential growth. This combination of expensive wholesale power and rising maintenance costs has put significant pressure on the co-op’s thin financial margins.
As a nonprofit entity, Capital Electric must maintain specific financial ratios to satisfy its lenders, a reality that leaves little room for absorbing these external price shocks. The board of directors, a nine-member group elected by the membership, is tasked with the difficult responsibility of setting rates that ensure the system’s viability while balancing the impact on their own neighbors.
Managing the On-Peak Demand
The co-op’s rate structure is designed to provide transparency regarding the volatility of wholesale costs. Roughly 60% of what Capital Electric pays its wholesaler is determined by a single 30-minute peak period each month. Because this peak usage creates a demand charge that heavily influences the final bill, the co-op is focusing its 2027 rate increases on the On-Peak Demand component.
To help members mitigate these increases, the cooperative offers several tools for managing usage. Members can enroll in load control programs or utilize the co-op’s forecast tool to receive alerts regarding peak usage times. The goal is to provide enough flexibility for households to shift their consumption habits, potentially lowering their overall costs.
Looking Toward 2028
While the immediate outlook involves higher rates, there is a cautious hope for stabilization. Both Steen and Fitterer have indicated that wholesalers are optimistic about costs plateauing and normalizing by 2028, once the current cycle of new generation and transmission construction concludes. In the meantime, the co-op is encouraging members who are struggling with the rising costs to contact their Energy Services team for a free home visit. By identifying specific inefficiencies, the co-op hopes to work with members to find alternative ways to save on their monthly expenses.
