Effective May 1, the MVEC Board of Directors approved a rate adjustment due to rising costs. The residential Basic Monthly Service Charge on your electric bill will increase from $15 to $25.
As a not-for-profit cooperative, MVEC works hard to manage our local expenditures while delivering dependable, safe, and affordable service. Read the sections below to learn why the adjustment was necessary and to explore ways to save on your energy use.
Questions you may have
What is the Basic Monthly Service Charge?
The Basic Monthly Service Charge supports the infrastructure needed to deliver reliable electricity. It covers the daily work of building and maintaining lines and equipment, testing meters, inspecting, and replacing poles, trimming trees, and paying for insurance, taxes, interest, and depreciation. These costs stay the same regardless of how much electricity the member uses. All utilities have a monthly service charge.
The Basic Monthly Service Charge helps sustain the cooperative’s investment in the electric system and ensures costs are shared fairly among all member-owners. It is in the Cost to Deliver section of your electric bill.
I am a longtime member; shouldn’t the Basic Monthly Service Charge be lower over time?
Even long‑time members rely on equipment that has been repaired, replaced, or upgraded over time. Weather, wear, and new technology all require ongoing investment to keep power reliable. The Basic Monthly Service Charge helps cover these continual system needs, not just the original installation.
Where do you see costs rising?
Like many utilities, MVEC is seeing higher costs driven by wholesale power prices, government requirements, infrastructure needs, and inflation, which has increased equipment expenses. Utilities across Minnesota and the nation are experiencing similar pressures.
Wholesale power is our largest expense. It is influenced by natural gas prices and growing demand for electricity. Both of our wholesale power providers, Basin Electric Power Cooperative and Great River Energy, are facing cost pressures from load growth, commodity price volatility, and ongoing investments to maintain reliability to the electric grid.
While we work hard to manage local operating costs, some increases are unavoidable. MVEC maintains 30 substations and more than 4,300 miles of line across a 968‑square‑mile service area in nine southern Minnesota counties.
Why is an adjustment needed?
MVEC can adjust the Basic Monthly Service Charge when our Cost of Service Study shows that the fixed costs of maintaining our system aren’t being fully recovered. The cost of essential materials like wire, poles, and other equipment has risen faster than the current charge can support.
The Basic Monthly Service Charge covers the cost of providing electric service regardless of how much energy a member uses. Whether a home uses 1 kWh or 1,000+ kWh, MVEC still incurs the same costs to build and maintain the lines and deliver power.
A recent Cost of Service Study showed that fully recovering these fixed costs would require a charge closer to $30 per month. The last adjustment to the Basic Monthly Service Charge was a $5 increase in 2023.
Could MVEC avoid rate adjustments by holding off on Capital Credit retirements?
Pausing or reducing Capital Credit payments might lessen a rate adjustment, but it wouldn’t be fair to the members who earned those credits. Capital Credits are member‑owned and based on each member’s electricity use. Even if payments were delayed, we would still need to adjust rates to maintain and invest in reliable and safe electric service. As a not‑for‑profit electric cooperative, any margins are returned to our members.
What options does MVEC offer to help me save?
Energy Wise programs – offer savings while participating in load management programs for electric water heating, cooling, heating and electric vehicle charging.
- Free options: Earn bill credits by participating in electric water heating or cooling programs.
- Discounted rate options: Qualify for lower electric rates with the installation of Energy Wise equipment.
- $25 – $600 in rebate options – Get money back when you purchase certain Energy Star appliances, electric lawn equipment, or have a professional tune-up for your cooling system, and more.
- SmartHub – Understand the ups and downs of your household energy usage with daily, weekly, and monthly insights. Set an alert for unusual usage so you’ll know right away if your power use is higher than normal before your bill arrives.
- Budget Billing – Manage your energy costs with a consistent monthly payment—no surprises, no seasonal spikes.
- Implement no-cost energy-saving tips such as shifting your usage of large appliances to off-peak times, adjusting your thermostat wisely, and opening curtains for sunshine in the winter or closing them for shade in the summer.
How are MVEC’s electric rates determined?
How are MVEC’s electric rates determined?
MVEC’s Board of Directors, elected by the cooperative’s member‑owners, sets electric rates. As part of a rate review, MVEC completes a Cost of Service Study with a third‑party consultant.
As a not‑for‑profit cooperative, rates are designed to cover costs, not generate profit, while maintaining system reliability and financial stability. As costs are reviewed, MVEC’s commitment to rate stability centers on these key areas:
We only adjust rates when it’s necessary to support reliable operations, allowing us to stay focused on delivering safe service to our member‑owners.
Member Rate Communications
Update to Basic Monthly Service Charge begin May 1 (March 2026)
From CEO Marvin Denzer:
As your member-owned cooperative, MVEC works to keep electricity reliable, safe, and affordable. Last month, the MVEC Board of Directors approved an adjustment to the Basic Monthly Service Charge. Beginning May 1, the residential charge will change from $15 to $25 per month.
This monthly charge helps cover the fixed costs of delivering reliable electricity to your home, including meters, poles, wires, substations, and other equipment. This cost is a line item in the Cost to Deliver section of your electric bill.
A recent Cost of Service study found that fixed costs are not fully recovered, and the true cost of providing service is not reflected. A charge closer to $30 would be needed for full cost recovery; however, the Board approved a $10 increase to address rising costs while balancing affordability for members. As a not-for-profit cooperative, MVEC adjusts rates only when necessary to maintain financial stability and provide reliable service.
Explore energy-saving programs and rebates that help you manage your electric costs. Energy Wise programs can reduce electric rates by up to 50 percent. Our Wi-Fi thermostat cooling program is a popular option that offers 10 percent savings from June through September and includes a $50 rebate for new installations.
We understand this change may affect households differently, and we are here to help. For questions or to learn more about available programs, call 952.492.2313 or visit www.mvec.net.
Understanding costs behind reliable power (February 2026)
From CEO Marvin Denzer:
In recent columns, I’ve shared that your Board of Directors has been reviewing MVEC’s electric rates. Our goal is to keep rates fair and equitable, aligned with the true cost of operating your electric system and delivering reliable power.
Your electric bill includes a monthly Basic Service Charge. This charge supports the infrastructure needed to deliver reliable electricity. It covers the daily work of building and maintaining lines and equipment, testing meters, inspecting and replacing poles, trimming trees, and paying for insurance, taxes, interest, and depreciation. These costs stay the same regardless of how much electricity you, the member, use. All utilities have a monthly service charge like this.
This billing component helps sustain the cooperative’s investment in the electric system and ensures costs are shared fairly among all member-owners.
As part of our rate review, MVEC completed a Cost-of-Service Study. Three key principles guide this process to ensure rates:
- Provide the revenue needed to operate and support a reliable electrical system
- Share costs fairly among all member-owners
- Align with the actual cost of providing service
We understand that any rate adjustment can be concerning. To help manage your energy use and control costs, we offer:
- The SmartHub app, which provides insight into your energy use and helps you identify opportunities to reduce your monthly bills.
- Energy Wise programs that help you save money without sacrificing comfort.
- Rebates to support the purchase of energy and money-saving appliances and HVAC units.
Energy Wise programs offer great savings (January 2026)
From CEO Marvin Denzer:
Last month, I shared that changes to electric rates are expected in 2026. Since then, our Board and staff have been reviewing options with one goal: to ensure safe, reliable electric service at an affordable cost.
As a not-for-profit cooperative, MVEC’s rates are designed to cover the cost of providing electricity to more than 48,700 member-owners across nine counties, while returning any margin after expenses are paid back to you as Capital Credits.
Our system has grown more complex over time. Membership has increased 40 percent since 2003, and today we operate 30 substations and maintain 4,265 miles of electric distribution line. Read about our 2026 Construction Work Plan, which outlines investments to keep your electric service reliable.
Options to Save:
About 43 percent of members lower their bills with Energy Wise programs:
- Free options: Earn bill credits by participating in electric water heating or cooling programs.
- Discounted rate options: Qualify for lower electric rates with the installation of Energy Wise equipment.
Electricity costs rise during peak hours when demand and wholesale prices are the highest. By shifting usage, MVEC reduces the amount of peak-time power we purchase, and members save. Wholesale power is our largest expense, accounting for 70 percent of MVEC’s energy costs. Participation in Energy Wise programs (also called off-peak) helps lower costs for all.
Member Tom Chromy of New Prague shares in the January newsletter how Energy Wise programs have made a real difference for his household. To explore ways to save, check out this page or call MVEC at 952-492-2313 to enroll in one of these money-saving Energy Wise programs.
Managing costs, preparing for 2026 rate changes (December 2025)
From CEO Marvin Denzer:
Keeping electricity affordable while ensuring reliable power is important to your cooperative. Like many utilities, MVEC faces rising costs from wholesale power suppliers, government mandates, infrastructure investments, and inflation that has increased equipment prices.
Recently, we conducted a cost-of-service study with a third-party rate consultant and have been closely monitoring the rising
costs of doing business. As we prepare the 2026 budget, a rate adjustment will be needed to maintain the reliable service you expect. Further details will be shared in upcoming editions of the Electric Eye newsletter.
MVEC is a not-for-profit cooperative, owned by you, our member-owners. Any margins are returned through Capital Credits, and, since 1959, $34 million has been returned. Electric rates are established by reviewing data to determine future revenue needs, assigning costs to each class of service, and designing rates that fairly collect revenue to meet obligations and fund the cooperative. Costs are reviewed by your cooperative’s commitment to rate stability and center on the key areas listed below.
Your electric bill has two main components: the cost to generate (wholesale power), which represents about 70% of costs, and the cost to deliver (MVEC’s local cost to get electricity to your home or business), which makes up 30%. It includes the Basic Monthly Service Charge, a fixed fee on all member bills, applied regardless of how much energy is used, which covers the cost of maintaining MVEC’s system, including poles, wires, transformers, meters, other line equipment, and administrative services. This charge was last adjusted in January 2023.
While there’s never an ideal time for rate adjustments, we remain committed to helping you save on your electric bill through Energy Wise programs and SmartHub energy management tools. Your Board of Directors takes rate-setting seriously. As member-owners, they recognize the importance of enhancing reliability while keeping rates competitive and want to ensure fairness for all rate classes.