RPU Board to Consider Updated 2026–2027 Utility Rate Adjustment and Electric Utility Budget
ROCHESTER, Minn. – Rochester Public Utilities (RPU) management has recommended an updated 2026 rate adjustment for the electric utility for consideration at the October 28, 2025, RPU Board meeting. The recommendation reflects updated wholesale cost information from the Southern Minnesota Municipal Power Agency (SMMPA) and the RPU Board’s continued commitment to aligning rates with costs, maintaining financial stability, and supporting customers.
Under the updated proposal, RPU recommends revising the electric utility rate adjustment to a 4.0 percent general rate adjustment in 2026 replacing the previously proposed 6.0 percent general rate adjustment.
SMMPA’s final 2026 budget that was adopted on October 17, 2025, includes lower-than-budgeted wholesale power costs, primarily due to the retirement of the debt service costs associated with Sherco Unit 3 being passed through to the agency members. For Rochester, this change represents about $4 million in additional power cost savings, allowing RPU to lower the 2026 retail rate adjustment from 6.0 percent to 4.0 percent while maintaining a strong financial position.
The updated budget still includes RPU’s planned addition of 245 megawatts of new wind resources before 2030 as part of the city’s 100 percent net renewable energy goal, and continued investment in new capacity resources at the Mount Simon Station, ensuring long-term reliability as RPU transitions from its current wholesale power contract in 2030.
The average residential customer is expected to see an estimated monthly impact of:
- Water: +$2.01/month in 2026 and +$2.19/month in 2027
- Electric: +$3.85/month in 2026 and +$6.01/month in 2027
All other budget assumptions remain consistent with the version reviewed by the Board and City Council earlier this year, except for the reduction in wholesale power expense.
If approved, the proposed rate tariff adjustments and associated budgets will be forwarded to the Rochester City Council for inclusion in the December 1, 2025, budget approval process.
About Rochester Public Utilities
As the municipal utility of Rochester, Minn., RPU provides high-quality and reliable electricity to more than 61,000 customers, along with water services to over 42,000 customers. RPU is governed by a five-member Utility Board and the Rochester City Council. The utility continually explores innovative technologies to help customers maximize the value of the services they receive, with current initiatives including photovoltaic offerings, wind energy, energy and water-efficient equipment, and electric vehicle charging.