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Council holds first reading of 5% electric-rate increase; staff cites infrastructure costs
Summary
City staff presented the first reading of Ordinance 6-27, a planned 5% electric-rate increase phased over three years; no final action was taken at the meeting.
The Flandreau City Council heard the first reading of Ordinance 6-27, proposing a roughly 5% increase in electric rates as part of a multi-year plan to bolster utility reserves and meet future capital costs.
City Administrator Cole summarized a 2023 electric-rate study by Missouri River that recommended a 5% increase over three years to maintain the electric utility’s financial health. Cole said recent wholesale-price increases from WAPA and Missouri River contributed to the need for a rate increase and that the typical residential customer would see an increase of about $7 per month under the proposed change.
Cole told the council the utility has made recent capital investments and has relatively new infrastructure but noted a major capital need ahead: a substation replacement estimated in the meeting discussion at roughly $4 million in the coming years. The ordinance would increase both the fixed base charge and the energy (per-kilowatt-hour) charge; this session was informational only and no vote was taken on final adoption.
Council members said they do not like raising rates but acknowledged rising wholesale costs and the long-term need to build reserves so the utility can finance major projects without excessive borrowing. The item will return for a subsequent reading and final action at a later meeting.
