The primary goal is reliability and long-term stability. By aligning rates with actual costs:
As a not-for-profit member-owned cooperative, rates are set only to cover the cost of providing service — not to generate profits.
Time-of-Use (TOU) pricing is one tool many utilities consider, but it requires specific technology, infrastructure, and careful evaluation to ensure it benefits members overall. Cloverland continually evaluates rate design options and programs, but any changes must balance cost, technology readiness, and member impact across our entire service territory.
Cloverland is currently in a power supply contract with Wisconsin Energy Corporation through 2029. Under this agreement, the cooperative incurs significant costs associated with system demand, making a Time-of-Use rate structure infeasible at this time. Cloverland continues to evaluate future rate design options, and TOU could be reconsidered as power supply contracts, member usage trends and system conditions evolve.
Energy efficiency and conservation remain important and beneficial for members. However, many of Cloverland’s costs — such as maintaining poles, wires, substations, and power supply capacity — are fixed and don’t decrease when overall energy use drops.
The rate adjustment helps ensure the cooperative can recover these necessary costs while continuing to encourage efficient energy
Demand rates are becoming more common because the cost of providing electricity today is driven not just by how much energy is used, but also by how much power is needed at any given time. Utilities must build and maintain enough generation, substations, and power lines to meet the highest periods of demand. Even if those peaks only occur for short periods, like homes running multiple appliances at once, Cloverland must be prepared to meet members’ needs. A demand component helps recover the cost of maintaining that capacity, ensuring the system remains reliable while aligning rates more closely with actual grid usage.
Demand rates also help keep costs fair among members. Without them, households that use large amounts of electricity all at once can drive infrastructure costs that are then shared by everyone, including members with steadier usage. By reflecting peak usage, demand rates help distribute the cost of maintaining the system more equitably while encouraging smarter energy habits—not necessarily by reducing electricity use, but by spreading high-energy activities over time.
At Cloverland, the demand charge is designed to be predictable and manageable. It applies only during the 8 a.m. to 9 p.m. timeframe and it is based on a member’s highest monthly usage period in each billing cycle. In many cases, members can reduce or avoid higher charges by staggering the use of large appliances, such as running the dryer, oven, and dishwasher at different times. This approach supports reliability and fairness while giving members greater control over their monthly bills.
Electric systems must be built and maintained to meet the needs of our 34,000 members at all times — including during periods of highest use. Facility and demand-related costs reflect the infrastructure and capacity required to deliver power reliably. Aligning rates with these cost drivers helps ensure fairness so costs are recovered in a way that reflects how the system is used.
Differing from the last one-time rate increase in 2023, the 2026 adjustment is part of a phased, multi-year approach designed to gradually align rates with the actual cost of providing service. Spreading changes over time helps avoid a single, larger increase while improving financial stability and predictability for members.
Like utilities across the country, Cloverland is experiencing rising costs to maintain and operate its electric system, including power supply, materials, infrastructure, and day-to-day operations. Our recent (October 2025) Cost of Service Study indicated that without a rate adjustment, the cooperative would fall below the required financial thresholds – which impacts the co-op’s ability to borrow money to make infrastructure improvements. The rate adjustment helps ensure we can continue to provide safe, reliable service by continuing to improve our infrastructure.
Cloverland Electric Cooperative is member-owned and not-for-profit, meaning it exists to serve its members—not to generate profits for shareholders. Any margins earned are reinvested into the system or returned to members as capital credits.
One key difference is service territory. Electric cooperatives like Cloverland often serve large, rural areas with fewer members per mile of power line. This means the cost of building, maintaining, and replacing infrastructure—such as poles, wires, and substations—is spread across fewer members than in more densely populated areas served by investor-owned utilities.
Despite these challenges, Cloverland works to keep rates as affordable as possible while maintaining reliability, safety, and long-term system health.
Did you know electric co-ops power fewer customers per mile of line compared to other utilities?
Severe weather is one of the greatest challenges to electric reliability, especially in northern Michigan. Rates help ensure Cloverland is prepared before, during, and after storms so power can be restored as safely and quickly as possible.
Rate revenues support:
Maintaining strong financial health allows Cloverland to respond immediately to major weather events without delaying restoration efforts or compromising safety. Careful long-term rate planning ensures the cooperative is equipped to serve members when they need it most.
