New Rates Effective with January 2026 Billings
At Kootenai Electric Cooperative (KEC), our mission is to provide our members with exceptional service and dependable electric power at competitive rates. The intent of this article is to keep you informed about changes that may have an impact on your electric bill.
Background
Due to KEC’s access to power produced by federal hydro facilities operating on the Columbia River, coupled with KEC’s operations as a not-for-profit utility and its focus on operational efficiency, KEC members benefit from some of the lowest electric rates in the nation. Despite this, the cost of purchasing power—especially during peak demand periods—has been increasing significantly over the years. This is true for all utilities operating in the Pacific Northwest. While the cost of purchasing or producing power on our members’ behalf has long hovered between 42-45 cents of every dollar our members pay in rates, the portion attributable to purchasing power during these peak periods (referred to as “demand charges” within the industry) will increase from 18% today to nearly 25% in just three years.
For most utilities including KEC, peak demand periods typically occur between 6–10 a.m. and 5–9 p.m., when households are preparing for work, cooking meals or returning home. These concentrated periods of high use drive up costs, which must be recovered more equitably than our former rate design permitted. Crucially, more so now than ever, it is essential that utility rates create price signals and incentives related to the underlying cost of the electricity being used. Stated differently, the rates KEC charges for electricity needed to be revised to account for the growing cost of demand and the impact these demand charges have had on our total cost of operations.
Rate Redesign
To ensure our rates continue to recover costs equitably, KEC developed a proposed rate redesign, which, among other factors, better addressed demand costs. That rate proposal was then mailed to all active members along with detailed information about how these rates impacted them. To promote member education and participation, we also hosted three rate workshops and invited members to provide written comments. Following a comprehensive review process, the KEC Board of Directors has approved the new rate structure that will take effect with January 2026 billings. This decision was guided by member feedback and our ongoing commitment to financial sustainability.
The new rate structure is designed to be revenue neutral, meaning the total revenue collected by KEC will remain unchanged, but the way costs are distributed among members will shift. Specifically, the new rate design introduces a Peak Use Charge for most residential and general service rates. This charge is based on the peak amount of electricity used during any single hour occurring within peak hours (see graphic) over a given month. By doing so, members are afforded the opportunity to reduce costs by shifting consumption to non-peak times. Peak hours are 6–10 a.m. and 5–9 p.m.
In conjunction with this, members now have access to our new energy insights available through SmartHub. This planning tool allows members to make informed choices about how and when they use electricity should they choose to do so.
As a consequence of these changes, approximately 70% of residential members will see a decrease in their annual electric bills, provided their electric consumption remains on par with their historical usage. Members who use more electricity during peak hours than the average member—such as those with older and less efficient appliances or those who may be charging an electric vehicle during peak use hours—may experience higher bills due to their contribution to energy demand during peak hours.
Members with solar, wind, battery storage or other generation resources will also see changes to their rates within the cooperative’s Net Metering program. The most notable of these is the recovery of the losses related to members wheeling surplus generation across our distribution system. Visit our Member-Owned Generation page to learn more.
Separate from the rate redesign, an increase to the energy charge will also be necessary in January 2026 due to continuing inflationary pressures on power costs within the region. The factors contributing to this have been shared in prior Powerlines’ articles and will continue to be communicated in forthcoming editions. The amount of this increase is being finalized as part of our annual budgeting process and will be communicated to members in December 2025.
Visit our Rate Redesign page to view approved rates and schedules. If you have questions or want to understand how these changes may affect your household, contact our Member Services team. We’re here to help you navigate these updates and make informed decisions about your energy use.