Cleveland Public Power is proposing its first rate increase in 40 years.
The proposed rate hike, which comes after a study on the city-owned electric supplier’s finances, could mean customers will pay 25% more by summer 2026.
The increases are to accommodate increased debt repayments, costs of supplies, wage increases and supply chain issues in recent years, said Martin Keane, Cleveland's director of Public Utilities.
"We don’t take it lightly," Keane told members of Cleveland City Council's utilities committee on Thursday. "There’s not a lot of meat on the bone, but we know we need to do better. And in order to do better, we need to raise the base rates for the first time in a very long time."
Cleveland Public Power has 73,000 customers, about 64,000 of which are residential, and only services residents and businesses within the city. Their largest customer is the city itself, which accounts for 20% of its sales revenue for things like traffic and streetlights.
"Local power comes with local decisions," said Ammon Danielson, the commissioner for CPP. "Every dollar we bring in is for our community and for our customers."
CPP representatives told council members the utilities company has experienced "budget pressure" in the past few years, citing an increase of up to 30% in wages and 44% in benefits. Costs of materials and supply chain issues have also skyrocketed: Since 2014, the company said transformer costs have increased by 65%, wire and cables by 30% and poles by 15%.
"We invest in the grid in any way we can," Danielson said. "To be clear though, we do need to invest more to maintain our reliability and to continue to deliver this essential service to our customers.”
Proposed rates for residential households will increase from 7.74 cents per kilowatt-hour June through September to 8.88 cents in 2025 and 9.7 cents in 2026.
For winter and spring months, rates will jump from 6.55 cents per kilowatt-hour to 7.52 cents in 2025 and 8.21 cents in 2026.
Those differences mean customers would be paying 15% more in summer 2025, and 25% more in summer 2026.
After using 1,000 kilowatt-hours a month, rates decrease. The average customer uses about 500 kilowatt-hours.
Rates will also increase for commercial usage.
CPP said their rates are the lowest of Cleveland's peer cities, but costs to operate are going up. In 2024, the company said it will cost $73 million, as opposed to $79 million in 2025 and $83.9 million in 2026.
Cleveland City Council will need to approve the proposed rates before they go into effect next year.
CPP said it will return to city council in 2026 to propose rates for the following years after the second phase of their study.
