Why your bill is changing
What is a rate case — and how can you take part?
When your utility wants to change rates, it doesn't just happen. There is a formal process, a body that has to approve it, and — in most cases — a way for you to be heard. Here is how it works.
The short answer: a rate case is the formal proceeding in which a proposed rate change is reviewed and approved. Who runs it depends on the utility — a state commission for an investor-owned utility, a member-elected board for a cooperative, a city council or utility board for a municipal. In most of these, the public can comment, and the underlying cost-of-service study is open to scrutiny.
Who decides, by utility type
Investor-owned utility
Files a rate case at its state public utility commission, which reviews the proposal in a public proceeding with staff, intervenors, and hearings before issuing an order.
Electric cooperative
Rates are approved by the member-elected board of directors, often informed by a cost-of-service study and sometimes subject to lender oversight from the USDA's Rural Utilities Service.
Municipal utility
Rates are set by the city council or a utility board, in meetings that are open to residents.
The steps
- A need is identified — often through a cost-of-service study that shows revenues no longer match the cost of service.
- A filing or proposal — the utility documents the requested change and the analysis behind it.
- Review — commission staff and intervenors (or a board and its advisors) examine the assumptions, the study, and the rate design.
- Public input — hearings, comment periods, or open board and council meetings.
- A decision — the deciding body approves, modifies, or rejects the proposal, and the new rates take effect.
How to be heard
If you are served by a cooperative, you are a member-owner — attend board and annual meetings, ask questions, and vote for the directors who set rates. For an investor-owned utility, watch your state commission's docket for a rate case; you can usually submit public comment or formally intervene. For a municipal utility, city council and utility-board meetings are open. The best time to engage is when a filing or cost-of-service study appears — that is when the decisions are still being made.
Frequently asked questions
What triggers a rate case?
Usually a gap between what a utility collects and what it costs to serve customers. That gap can open up after a large capital investment, a jump in wholesale power costs, significant load growth or loss, or simply years of cost inflation. A cost-of-service study often quantifies the gap and becomes the basis for the proposed change.
Who approves a rate change?
It depends on the utility. For an investor-owned utility, a state public utility commission reviews and approves rates in a formal proceeding. For an electric cooperative, the member-elected board of directors approves rates, sometimes with oversight from the USDA's Rural Utilities Service. For a municipal utility, the city council or a utility board decides. In every case there is a defined body accountable for the decision.
How can I participate in a rate case?
For a cooperative, you are a member-owner: you can attend board and annual meetings, ask questions, and vote for the directors who set rates. For an investor-owned utility, a commission rate case usually allows public comment and formal intervention, and often holds public hearings. For a municipal utility, city council and utility-board meetings are open to residents. Watching for a filing or a cost-of-service study is the best moment to weigh in.
How long does a rate case take?
A formal commission rate case for an investor-owned utility can run several months to a year or more, with filing, staff and intervenor review, hearings, and a final order. A cooperative or municipal process is often shorter, but still involves a study, board or council review, and member or public notice before rates take effect.
Keep reading
How are electric rates set?
What the utility brings to a rate case in the first place.
What is a cost-of-service study?
The analysis a rate change is usually built on.
Rate360 gives utilities the transparent, defensible analysis that stands up in a rate case — and helps them explain it to members. See the methodology