As your member-owned electric cooperative, we at K.C. Electric Association are committed to providing safe, reliable service at the lowest cost while maintaining financial viability. Like many of you, we are facing higher expenses — nearly everything we purchase from postage to power poles continues to increase in price. Rate increases, even moderate ones, aren’t taken lightly by K.C. staff and directors and are one of the toughest decisions K.C.’s directors have to make.
On the next page, you will see the new rates approved by the K.C. Electric Board of Directors during our November 2025 board meeting. In September, our power supplier, Tri-State Generation and Transmission Association notified us that it would be implementing a wholesale rate increase effective January 1, 2026. Tri-State’s rate increase will affect the amount K.C. Electric pays for both the demand and energy components of our power bill on your behalf.
Since our annual cost of power is typically 75% of our total expenses, any increase in our wholesale power rate results in upward rate pressure on our retail rates. Tri-State implemented a 7.5% rate increase which will result in a 6.8% rate increase in our wholesale power costs beginning in January 2026. After many years of increased operating costs, the K.C. board came to the difficult decision to adjust our retail rates. K.C. will not be passing through the entire Tri-State rate increase but will have an overall retail rate increase of 4.15% over all our rate classes. Not all of our rate classes will experience a rate increase with this change.
K.C. routinely hires an independent rate consultant to conduct a Cost of Service Study to determine if our members are being charged proportionately. This study utilizes data from our advanced metering infrastructure to determine whether each rate class is paying its fair share and whether our member’s rates reflect what it costs K.C. Electric to safely provide reliable electric service. In today’s energy landscape when it comes to the cost of wholesale power, the times power is used is just as important as how much is used. K.C. currently has 11 rate classes and the study helps us determine if any rate classes are subsidizing other rate classes.
The data from our study indicated that we need to increase retail rates for seven of our 11 rates: rural residential, large commercial, oil well pumping, large power, wind, wind TOU, and irrigation. Town residential, non-domestic, small commercial, and street light rates will be unchanged in 2026.
While this increase presents a very real challenge to maintain affordability, your cooperative has taken proactive steps that protect our member-owners from the full impact of these rising costs without compromising the quality of service you deserve and expect. A recent rate study conducted by the Colorado Association of Municipal Utilities indicated that, even though we are rural and have smaller loads and low density, K.C. has kept rates lower than most of the other electric cooperatives and utilities in the state.
Whatever the future holds, I assure you that the K.C. Electric board, staff, and employees will do everything in our power to continue delivering electricity to you in a safe, reliable, and affordable manner.
These rate adjustments are effective January 1, 2026, and will be reflected on the bill you receive in the first week of February. If you have any questions about the rate change, please do not hesitate to contact either the Hugo or Stratton office.
