Electric utilities across the country are facing growing financial pressures. Northern Electric, along with our power providers, Basin Electric and East River Electric, are not immune to these challenges. Our mission of providing safe, reliable electricity at the lowest possible cost to our members is becoming increasingly complex due to shifts in the power market, growing energy demand, and evolving regional regulations.

Power supply makes up 64% of Northern Electric’s costs and represents the largest portion of our uncontrollable expenses. These costs are based on the amount and timing of power needed by our members, which is largely influenced by weather conditions and member usage patterns. Weather plays a significant role in electricity demand. Extreme temperatures increase the need for heating and cooling, while wet or dry conditions affect the use of sump pumps, dehumidifiers/humidifiers, irrigators and crop dryers.

We have been informed by our primary wholesale power provider, Basin Electric Power Cooperative, that we will have a rate increase for 2026. Basin provides approximately 86% of the power needed for the 25 distribution co-ops of East River and for another 114 cooperatives across nine states.

Several developments are driving the increase:

• Rising Energy Demand: Growing electricity usage across the region requires new investments in power plants and transmission lines. Basin’s long-term financial forecast now calls for accelerated development compared to previous projections. Only one 45 MW power plant was built between 2018 and 2024. During this same period, demand grew by 40%.
• Large-Scale Capital Projects: Over the next decade, Basin plans to invest $13B in capital projects. Working towards establishing additional dispatchable generation, Pioneer Generation Station Phase IV, a 580 MW natural gas-fueled generation facility became operational in September of this year near Williston, ND. Basin has also announced their plans to construct the Bison Generation Station, a natural gas-fueled generating plant to be built near Epping, ND. The plant will produce up to 1,490 MW.
• Reserve Requirements: The Southwest Power Pool (SPP), our regional transmission organization, has implemented new resource adequacy rules, increasing the required reserve capacity to ensure grid reliability during periods of extreme demand. This has caused the need for additional dispatchable generation.
• Market Instability: Wholesale energy markets continue to experience volatility, making it harder to predict costs with certainty.
• Inflation: Rising prices for materials, labor, and equipment further compound the cost of generating and delivering electricity.
• Commodity Prices: Sensitivity to pricing has had a large effect on the sales out of Basin’s subsidiary, Dakota Gasification Company.

While Basin has benefited from rapid growth across its nine-state region, which has helped spread costs across a broader customer base, the combination of increasing demand, infrastructure needs, and inflation means a rate increase is unavoidable.

We are also going to see an increase in hydropower costs from the Western Area Power Administration (WAPA) for the second straight year. WAPA supplies our power that is not provided by Basin.

We recognize how concerning any increase in electric rates can be for the families, farms, and businesses we serve. That’s why Northern Electric’s board and staff will be working diligently on our 2026 budget to review internal expenses and limit any additional financial burden on members. At this time, we know an adjustment to our rates will be needed to meet our financial requirements.

Our commitment is to provide open, transparent communication about what to expect and when. We will be sharing more specific information in the coming months, once power cost projections and budget planning are complete.

Thank you for your continued support and trust in Northern Electric Cooperative. Together, we will navigate these challenges while staying focused on reliability, affordability, and service to our membership. We encourage members to begin preparing now for the expected rate adjustments.