The South Haven City Council has approved an electric rate hike while making some changes to the way electric rates are set for the municipal utility.
At a meeting on Monday, the council heard from Dawn Lund of Utility Financial Services, LLC, a firm hired by the city to conduct a “cost of service” study for the electric service. She said while looking at market conditions and the price of electricity, it’s time for the first rate increase in South Haven in about nine years.
“We’re recommending a 4.9% rate adjustment to take place on your October 1 billings,” Lund said. “This is what mainly is driving the rate increase is your power cost provider and PPA projected that energy and capacity costs are going to actually increase for 2026 at about 14.5%.”
The council also approved an ordinance amendment changing the way electric rates are set. Currently, the rate is set via an ordinance, which requires multiple meetings. The council has changed that to allow rates to be set through a simple resolution, which can be done with one meeting.
Member George Sleeper said it’s better to have flexibility.
“It makes it a little bit easier to change our rates, but it doesn’t necessarily mean that it’s always going to be a rate increase,” Sleeper said. “It could also be a rate decrease.”
Council member Mary Hosley provided the lone vote against the ordinance amendment, saying it should take more time to change the rates so residents can weigh in. She did vote in favor of the 4.9% rate increase to take effect in October, along with all other members of the council.
