The Sioux Center City Council has approved the first reading of an ordinance that would increase electric utility rates by 7% later this summer and another 7% next year.
Why Rates are Increasing
City officials say the proposed increases are primarily driven by rising wholesale electricity costs, inflation, transmission expenses, and long-term investments in electric reliability.
The proposal was discussed Monday night during a presentation from Tim Miller, Director of Rates for Missouri River Energy Services, or MRES — the wholesale power provider that supplies electricity to Sioux Center Municipal Utilities and other member communities across four states.
Miller told council members the largest factor behind the increase is the rising cost of purchasing electricity.
Sioux Center Municipal Utilities serves more than 2,760 homes and businesses and is one of 61 member communities within MRES. About 23% of Sioux Center’s electricity comes from federal hydroelectric power generated along the Missouri River, while the remaining power is supplied through MRES generation and energy market purchases.
According to the city, an average family of four would see about a $7.00 increase on a monthly electric bill under this year’s proposal.
City officials also emphasized that electric rates in Sioux Center remained relatively stable over the past decade. Miller noted that average residential electric bills only increased about 9% between 2015 and 2025.
Competitive Rates Still Emphasized
During the meeting, officials repeatedly stressed that Sioux Center’s electric rates would remain competitive with neighboring communities and regional utilities even with the proposed increases.
Miller presented regional comparisons showing Sioux Center currently has some of the lowest electric rates in the area for residential and commercial customers.
Mayor Dale Vander Berg said remaining a place where businesses want to go is a must.
Long-Term Utility Investments
The proposal also factors in future investments into the city’s electric system, including Sioux Center’s share of a planned 11-megawatt local power generation project. Officials estimate the project will cost roughly $21 million, with most of the long-term cost offset through MRES capacity payments.
A longer-range utility study also modeled potential additional increases in 2028 and 2029, but those future years are not currently part of the ordinance.
Mayor Vander Berg said the city is trying to balance competitive utility rates with the realities of operating and maintaining a growing electric system.
The council approved the first reading of the ordinance Monday night and will review the proposal again during two additional council meetings later this summer.
