Traverse City Light & Power proposes 5% base rate increase as part of 2026–27 budget

Traverse City Light & Power on May 11 presented a proposed 2026–27 budget that includes a 5% base rate increase and targeted investments in staffing, infrastructure and fiber expansion. Carla Myers Beeman, chief financial officer for TCLP, told the city commission the increase is aimed at improving near-term financial stability amid regional market volatility and higher wholesale power costs.

"We are proposing a 5% base rate increase, to address utility financial needs," Myers Beeman said, and described conservative budgeting for purchase-power amid recent market spikes that saw wholesale prices jump during a January storm. She said the utility budgets purchase power conservatively because weather and market events have driven volatility.

Why it matters: TCLP officials said the proposed increase will not fully close a small projected deficit but will improve near-term affordability while enabling planned investments in reliability, cybersecurity, preventative maintenance and fiber service expansion. The utility is budgeting six new positions to support strategic initiatives and plans a multi-year rate strategy informed by a cost-of-service study scheduled for 2027–28.

Key details and context: TCLP staff explained the role of the power service cost recovery (PCR) rate — a pass-through that adjusts with wholesale costs — and said the utility uses a 12‑month rolling average to smooth customer impacts. Myers Beeman gave the PCR rates used in the presentation as an example (budgeted average PCR of about 0.017 in 2025–26, with a conservative projection to 0.02 next year) and said the overall average household rate would remain below the 2024 Michigan municipal average after the proposed increase.

The utility also reported its generation mix, saying about 31% of its portfolio is solar and roughly 10% is wind, and highlighted coming projects including the Hart Solar facility (expected online in September 2026) and planned conversions at Bell River plants to gas peaker units. Myers Beeman said TCLP’s renewable investments have helped insulate the utility from some market volatility.

Commissioners asked how the proposed increase would affect customers on fixed incomes. Myers Beeman and Brandy Ekren, TCLP’s executive director, pointed to a planned "customer cares" program intended to provide supplemental aid and to outreach and affordability analyses the TCLP board will consider when it formally reviews rate adjustments.

What happens next: TCLP staff emphasized the presented numbers are planning-level and that the TCLP board has not yet taken final action on the rate adjustment. The commission set a public hearing on the overall city budget for May 18; any formal TCLP rate decision will follow the utility’s and board processes.

Quote: "We are budgeting purchase power conservatively due to continued volatility in the regional energy market," Myers Beeman said, noting the utility’s goal to balance reliability and affordability while advancing clean-energy and fiber initiatives.

Provenance: Topic introduced SEG 886; detailed presentation and rate discussion SEG 915–1376.

Ending: TCLP’s proposed rate and budget will move to board consideration and the commission’s forthcoming budget hearing schedule; staff said they will return with formal rate materials when the Board takes up the item.