Traverse City Light & Power approves 5% electricity rate increase

Traverse City households and small businesses will pay more for power after Traverse City Light & Power approved a 5% electricity rate increase, a move city officials tied to rising system costs and a utility balance sheet still under pressure. The city-owned utility said the change was needed now as coal plants are decommissioned, electricity demand from data centers keeps climbing and the region shifts toward new energy resources.

At the board’s May 12 meeting, Chair John Taylor, Vice-Chair Paul Heiberger, commissioners Lance Boehmer and Laura Ness, Executive Director Brandie Ekren and Chief Financial Officer Karla Myers-Beman were among those present. The city’s 2026-2027 budget public hearing, which included Light & Power, was set for May 18 at 7 p.m. at the Governmental Center, 400 Boardman Avenue.

Myers-Beman said the 5% increase would not fully erase TCLP’s current operating deficit, but was part of a longer-term plan for smaller adjustments in future years. That makes the decision less a one-time fix than another step in a utility that is trying to keep up with the cost of power on one side of the ledger while managing a broadband business on the other.

For residential customers, the shape of monthly bills has already changed. TCLP began time-of-use electric rates with December 2025 electricity consumption, which showed up on January 2026 bills, and it discontinued the Senior Rate as part of that transition. In 2024, when the utility announced what it called its first rate increase in two years, it said an average home using 572 kilowatt-hours a month could see about a 5%, or $4.50, increase in the monthly bill. TCLP also said then that it remained among the bottom five utilities in Michigan for average residential price, based on 2022 U.S. Energy Information Administration data.

The broadband side of the city utility remains under scrutiny as well. A Mackinac Center analysis said TCLP’s fiber project had not yet turned a profit, had originally been expected to reach profitability by 2021 and generate $1.2 million in revenue, and saw estimated costs rise from $4.2 million in 2019 to more than $28 million by 2023. The same analysis said TCLP now projects 40% household and business subscription by late fall or early winter of 2027, leaving open the question of how much of the utility’s financial strain will spill over between electric service and internet service as Traverse City moves ahead.