At the recent November meeting of the Board of Directors, the board unanimously approved the proposed 2026 budget and the required aggregated rate increase of 6.8%, which will go into effect on January 1, 2026.
The change to residential electric service rates will be in the form of a $1 increase to the service availability charge and just over a 1-cent increase in the kWh charge. The average residential electric bill of 752 kWh will increase by approximately $8.95 per month.
Because of the rising costs resulting from inflation, the 7-year gap from 2016-2023 of no rate increases at MPE, and continuing cost pressures on equipment, materials, labor, and transmission, a rate increase was anticipated, which is also a nationwide trend. MPE’s wholesale power costs are set by a long-term contract that includes pre-determined rates through 2045. This helps to insulate our members from any price swings in the power market.
At MPE, the mission is to provide cost-based energy, while also providing a high level of reliability and safety. Because MPE is a not-for profit electric cooperative, the only way to recover the cost of purchasing and distributing power is to pass on those costs through power bills.
Power Systems Engineering was again consulted to provide their expert analysis on MPE’s 2026 rate structure using the Cost of Service and Rate Study they performed in 2024. While designing the updated rates for MPE’s classes of member-customers, the motivation was to make the rates objective, fair, and equitable. To see the public notice of the tariff revisions and updates for each rate class, visit www.MPEI.com/Rates.
To help stabilize wholesale power costs, MPE spent the previous several years exploring alternate power supply options. In January 2023, MPE provided Tri-State Generation and Transmission the required 2-year notice to terminate its wholesale power contract, effective Feb. 1, 2025. MPE secured a rate stable power purchase agreement with Guzman Energy to follow its exit from Tri-State. Although power supply costs represent a majority of MPE’s budget, operational and capital costs – all the people and resources it takes to keep our grid reliable and safe – are critical budgetary considerations as well.
Tri-State announced in September it would be increasing its wholesale electric rate to its members by 7.5% for 2026. MPE's current power supply contract with Guzman Energy includes a predictable power cost over the 20-year life of the agreement.
Key takeaways from the 2026 budget include:
- While MPE departments identified several areas of need for new full-time employees, only one remained in the budget presented to the board – a Contractor Supervisor.
- Federal funds of $7,768,929 million are allocated for eight important grid hardening/fire mitigation projects for Phase 2 of the grant awarded by the Colorado Division of Homeland Security & Emergency Management and FEMA.
- Although MPE has been awarded a more than $100 million grant from the USDA Rural Utility Service’s New ERA program, these grant funds will not be recognized in the budget until MPE begins receiving grant payments and the board directs how the funds are to be utilized.