Frequently Asked Questions
Regarding an updated RP&L Rate Tariff
Why are we completing a rate study?
It is important to periodically assess whether the existing rates are sufficient to recover costs and margins to help the utility remain financially sound and promote equity among customer classes.
Why are we completing a rate study now?
The 2021 “order” of the IURC required RP&L to review its base rates in 5 years. Although RP&L left the jurisdiction of the IURC in 2022 via a referendum vote, the RP&L Board of Directors passed a resolution and Richmond Common Council passed an ordinance that reaffirms the IURC’s directive to complete rate studies every 5 years.
“…future Cost of Service Studies will be performed in increments no more than 5 years apart to help keep up with inflationary changes impacting RP&L’s operational costs…”
When has RP&L completed rate studies and implemented rate adjustments?
The last rate studies completed with implemented rate adjustments occurred as follows:
- 2004-2005
- 2020-2021
- Current Proposed – 2025-2026
What has changed that requires adjusted rates?
- INFLATION – Our electric system, just like your home and vehicle, requires continuous maintenance. Sometimes things break unexpectedly, and it is no different for an electric utility. Like the rest of the country, RP&L’s operations have felt the impacts of large inflationary changes over the past 5 years. Costs for services and equipment have increased dramatically.
For example:
- #2 Primary Service Wire has increased 28%, which has led to an increase of $14,800 per reel of wire.
- Single phase pad mount transformers cost $1,639 in 2000 (and peaked at over $8,600 in 2022) and now costs over $3,800. The current price is 135% more.
We maintain over 2300 items in inventory to maintain our electric system, so the above are just 2 examples of inflation on products that has increased our costs to serve customers.
- PLANNED MAINTENANCE – Reliability is key to our operations. RP&L’s infrastructure requires continuous maintenance and components need replacement. It takes planning, time, and financial resources to replace critical infrastructure. We have studied some of our critical infrastructure components and know some items will be reaching end of useful life in the next 5-10 years. Specifically, we have some critical components that have been taking 2-3 years to arrive, once ordered. We must have finances in place to order/purchase these items before they reach the end of useful life.
- SMART GROWTH – RP&L is continually planning as our community continues to grow. For example, the industrial park is now almost at full capacity and additional land has been added to the industrial park for growth. Numerous new commercial customers have been added to the RP&L system, and more are on the horizon. Hundreds of new housing units are currently being built, with hundreds more in the planning stages. Community growth requires us to expand our system to serve future customers. To support this growth, we plan to build a new substation that will add critical system redundancy and capacity for continued community development. This is estimated to cost $10 million.
- ENVIRONMENTAL REGULATIONS – RP&L is required to complete a federally mandated environmental project in the next two years. This pertains to coal ash that was placed on its property from the 1950s-1970s. Due to a 2015 EPA mandate, this must be remediated. RP&L has been setting aside funds for this project, but additional funds are still needed. The project is currently estimated to cost approximately $30 million. We will be bonding to pay for this over 20 years.
How will this impact my bill?
Residential customers (based on an average of 1000 kWh/month of usage) can expect to see the following estimated changes in energy costs:
| CURRENT | 2026 Q4 | 1/1/2027 | 1/1/2028 | 1/1/2029 | |
| TOTAL RATE | 0.11424 | 0.11609 | 0.12016 | 0.12191 | 0.12374 |
| Total % Change | 1.62% | 3.51% | 1.46% | 1.50% | |
| Estimated $ Change/month* | $ 1.85 | $ 5.54 | $ 3.22 | $ 3.30 | |
| *Energy cost estimates are based on average Residential customer with average usage of 1000 kWh/month. The Facilities (fixed) Charge will increase by $1.47 each year 2027-2029. | |||||
Commercial and industrial rate classes are more complex due to factors such as demand, power factor, and more.
Overall, commercial and industrial customers can expect to see an average energy cost* increase of around 2.3% a year through 2029.
*It is important to understand your rate classification as other factors (such as demand, power quality, facilities charges, etc.) that impact your bill and may have adjustments as well.
More information can be found in the tariff rate schedule.
How do we compare to other utilities?
Average Residential bill comparison based on average 1000 kWh/month usage.
*Currently adjusting rates, this reflects current rates.
**2025 Data from IURC. Some of these utilities have had approved rate increases since 2025.
Will my bill look different?
Yes, we are adjusting what is reflected in the energy rate for transparency. You will see two new “riders” that will function like the existing ECA rider, explained as follows:
ECA – Energy Cost Adjustment (CURRENTLY EXISTS)
This is the quarterly wholesale energy cost adjustment. It can be a charge or credit. For the 3rd quarter of 2026, it is a credit. Other utilities can use different terminology such as PCA (power cost adjustment) or FCA (fuel cost adjustment).
FER – Federal Regulatory Expenses
The FER rate adjustment recovers expenses required to pay the costs associated with mandatory federal regulatory expenses, specifically the environmental project mentioned above. The FER will become effective on bills after October 1, 2026, and will be charged to each customer class based on a flat per kWh basis. It is important to note that this is an existing expenditure and was previously included in the base rate. The FER is now pulled out of the base rate and listed as a rider for clarification.
GFT – General Fund Transfer
As a municipally owned electric utility, the GFT recovers expenses to pay the costs associated with required transfers to the city’s general fund. The GFT rider will become effective on bills after January 1, 2027, and will be charged to each customer class based on a flat per kWh basis. It is important to note that this is an existing expenditure and was previously included in the base rate. The GFT is now pulled out of the base rate and listed as a rider for clarification.
Our Commitment to You
Every dollar collected through electric rates is invested back into providing dependable electric service to our community. These proposed rate adjustments will help Richmond Power & Light maintain the system our customers rely on every day, prepare for future growth, meet federal environmental obligations, and continue delivering reliable power safely and efficiently.
Our goal is to make thoughtful, long-term investments today that help avoid larger costs tomorrow while continuing to provide some of the most competitive electric rates in the region.
Thank you for taking the time to learn more about the proposed rate changes. We appreciate the opportunity to continue serving the Richmond community.