This fee helps pay for the electrical infrastructure (poles, wires, transformers, substations, etc.) that is required to get power to your home or business. It also helps pay for the maintenance of that equipment. There is a fixed cost for the infrastructure regardless of how much electricity you use (even if you use 0 kWh there is a fixed cost to have the service at your location). The average investment per account is approximately $12,500 plus ongoing maintenance costs. 

If a single-phase farm and rural residential member uses 1,500 kWh a month, their monthly electric bill will increase $10.50 a month or $126 a year.

If a residential member uses 1,200 kWh a month, their monthly electric bill will increase $8.40 a month or $100.80 a year.

Sioux Valley Energy raised its rates in 2024, prior to that the last increase occurred in 2020. Sioux Valley Energy is having to increase rates in 2025 due to higher power supply costs which are passed directly back to the member. The Cooperative was able to reduce its direct expenses. These costs include day to day activities such as cable locating, right-of-way clearing, pole testing, member billing and postage, member meetings, community development, software, director expenses, building expenses, dues, and outside services.

Each utility has its own method of recovering the cost of providing electricity to its customers. According to the US Energy Information Administration (EIA) as of July 2024 the average cost for electricity in the U.S. was 16.63 cents/kWh. The average cost for Minnesota residents was 16.33 cents/kWh and the average for South Dakota residents was 13.85 cents/kWh. With the increase, SVE’s average residential rate (including basic service charge) is 13.59 cents/kWh. This analysis shows that Sioux Valley Energy is less than the average rate in South Dakota and significantly lower than the average rate in Minnesota. https://www.eia.gov/state/data.php?sid=SD
https://www.eia.gov/state/data.php?sid=MN

The Cooperative is a not-for-profit electric utility. Our business model focuses on setting rates based on actual costs – profit is not the focus. In fact, any margin that is realized by the Cooperative is given back to the members in the form of capital credits. We are, however, required by lenders to maintain minimum financial benchmarks.

To minimize the need for a rate increase, we reviewed all expenses and were able to decrease direct expenses in 2025. However, because direct expenses only make up 6% of the budget, the impact of that is minimal. The driving force behind the rate adjustment is power supply costs (61% of the budget), which are not controllable expenses. Direct expenses include day to day activities such as cable locating, right-of-way clearing, pole testing, member billing and postage, member meetings, community development, software, director expenses, building expenses, dues, and outside services.

There is a cost to the Brandon building. However, the rate impact is minimal because this is a capitalized expense and is spread out over a time period of 50 years, so both existing and future members pay for it. This expansion is necessary to prepare the Cooperative to serve its members well into the future. The capitalized expense of the Brandon building expansion did not impact the decision to increase rates in 2025 because that increase is attributable to power supply costs.

On an average $120 electric bill, approximately 91 cents will go towards the Brandon building expansion. That is three-quarters of one percent (0.76%) of your electric bill.

• Sioux Valley Energy has several programs and special rates that may help you save. Learn more here.
• Want to make your home or business more efficient, check out these resources:
  • Use Energy Wisely booklet
  • Sioux Valley Energy Energy Efficiency tools
  • Touchstone Energy "Use Energy Wisely: Energy Efficiency" web page 
• Struggling to pay your electric bill? There are many assistance agencies available for members. You can find the agency listing here.

There are many ways you can lower your electric use. Here are some great ways you can save:

• https://www.siouxvalleyenergy.com/sites/default/files/documents/energysavings/Use-Energy-Wisely_ER-version.2021.pdf
• https://www.siouxvalleyenergy.com/energy-efficiency-tools
• https://www.touchstoneenergy.com/use-energy-wisely-energy-efficiency

The answer to this question is “probably”. Our power wholesale power supplier, Basin Electric has indicated they will need to increase their rates in 2026 as well. In addition, the Western Area Power Administration (WAPA) will have at least one more year of rate increases in 2026.