NIPCO Board Approves Modest Wholesale Rate Increase

NIPCO has a long history of providing its member cooperatives with reliable power, stable rates, and programs and policies that support western Iowa communities. Through transparent leadership, NIPCO advocates for reliable service and strong partnerships with its power suppliers and member distribution cooperatives, always keeping the end consumer in mind. 

For the second consecutive year, NIPCO is facing rate pressure from its primary power supplier. 

Basin Electric has approved a 7.6 percent increase to its average wholesale rate, effective January 1, 2027. Purchased power accounts for more than 79 percent of NIPCO’s budgeted cost of service, making Basin Electric’s rate increase a significant factor in NIPCO’s budget planning. With the increase, payments to Basin Electric are expected to represent 70 percent of NIPCO’s total cost of service in 2027. NIPCO’s secondary power supplier, Western Area Power Administration (WAPA), has maintained steady rates and anticipates no increase in its long-range forecast. 

Basin Electric attributes the increase to four primary drivers. Growth in traditional load that requires investment in new generation and transmission projects. Reliability investments, including upgrades to Basin Electric’s existing generation facilities and efforts to shorten planned outage times. The Southwest Power Pool (SPP), Basin Electric’s regional transmission organization, has also increased planning reserve margin requirements, requiring more generating capacity to be held in reserve as demand grows across the regional grid. Commodity price variability affects both Basin Electric’s fuel costs and sales revenue at its subsidiaries, Dakota Coal Company and Dakota Gasification Company. It is important to note that the increase from Basin Electric is not driven by new large loads, namely data centers and cryptocurrency mining facilities, as the costs of serving these loads are addressed through Basin Electric’s Large Load Commercial Program. 

With this news from Basin Electric, NIPCO has worked hard to absorb much of this increase through identification of operational efficiencies, a revenue deferral from 2025 operations that helped reduce rate impacts, and an improved system-wide load factor due to new loads and improved operational strategies to NIPCO’s load management system. At its October meeting, NIPCO staff reviewed the factors affecting the 2027 wholesale rate and its plan for mitigating this increase from our largest supplier of purchased power. During the meeting, the Board approved a 0.28 m/kWh (mills per kilowatt-hour) increase to the Class A Composite Rate, resulting in a 0.4 percent increase for 2027 compared to 2026. NIPCO’s long-range forecast projects an average annual increase of 1.7 percent over the next ten years. 

NIPCO is committed to keeping rates manageable and recognizes how increases affect member cooperatives and the western Iowa communities they serve. Rate planning is a year-round effort, with monthly conversations across the NIPCO family focused on identifying efficiencies and limiting rate pressures and sudden increases. It is only through ongoing collaboration with its member cooperatives that NIPCO manages to keep rates reasonable and stable. Members’ interests guide every decision, helping ensure any increase passed along is justified. NIPCO is dedicated to continuing its transparent rate discussions and serving as a trusted resource for years to come.