The City Council of Webster City voted last night to increase rates for all classes of electricity users, residential, commercial and industrial in Webster City. Major rate increases sustained by Humboldt-based Corn Belt Power Co-op from its key suppliers in 2025, with further increases forecasted for this year, left council few options except to pass what will likely be the largest increase in electric rates in recent memory.

Last November, Corn Belt’s Executive Vice President and General Manager Jacob Olberding told the council it had been notified by Western Area Power Administration (WAPA), a producer of electricity and an agency of the U.S. Department of Energy, that Corn Belt’s rates would increase by an estimated 6.23% in 2026. This was on top of a 7.49% increase in 2025. WAPA supplies electricity to states from California to Minnesota, and from Texas to the Canadian border.

Another Corn Belt supplier, Basin Electric Power Cooperative, Bismarck, N.D., raised its rates 7% in 2025, and expects to hike rates as much as 10% in 2026. Olberding told the council Corn Belt had no choice but to pass the higher rates on to Webster City. These increases are much larger than those in any of the last few years.

A document prepared by city staff projects an average resident will see bills go up an average of $14.57 per month from April 1, 2026, through July 1, 2027. Light duty commercial users, such as retail stores, can expect an increase of an estimated $18.22 per month over the same period.

City Manager John Harrenstein, in presenting an overview of the situation to the council, was direct.

“Let’s face it; this stinks,” he said, “The city is charged with providing electric power safely, maintaining our transmission systems, and employing a staff trained and ready to make emergency repairs, and we’ll keep doing that. I only wish this could be easier on the rate payers.”

Mayor John Hawkins added, “It’s unfortunate, but we have no real control of the situation.”

Councilman John Marvel minced no words, saying simply: “We’re being held hostage here.”

Webster City has seen a steady, gradual increase in electricity costs for nearly a decade.

In 2017, the council approved a 1% per year increase in both monthly base fees and monthly use charges for all rate payers. The increase was needed to help meet the effects of inflation. That is where things stood until spring, 2025, when Corn Belt, citing higher costs to buy power from its suppliers as discussed above, and higher transmission costs to customers, raised rates to Webster City by 3%.

The council members, realizing the city budget couldn’t stand such a cost increase all at once, raised rates to Webster City electric customers by 3% in June, 2025, to compensate.

To blunt the impact of more rate increases at a time of rising inflation across the U. S. economy, the city will phase-in the new, higher rates over three years.

Plans call for a 5% increase to both base and use rates beginning April 1, 2026. This will be followed by a 4% increase effective July 1, 2027. Another 2% hike will come six months later, on July 1, 2027, with a final 1% increase on July 1, 2028.

The entire country is seeing electricity rate increases, many higher than Iowa. The New York Times recently published a list of states experiencing the biggest increases. They are: Pennsylvania (18.93%), Rhode Island (16.32%), New Jersey (15.74%), Maine (14.97%), Ohio (14.45%) and Washington (13.2%).

Many people are asking if data centers, being built to meet power requirements of the artificial intelligence (AI) economy the U.S. is rapidly building, are responsible for rising electricity costs across the country.

There’s evidence this is the case. AI consumed 4.3% of all electricity produced in the U.S. in 2023, and that’s expected to rise to 12% by 2028.

A number of AI data centers are already under construction or planned for Iowa. Edged Energy, of New York City, is breaking ground for a big data center in Ankeny in May, and another in Council Bluffs. Microsoft, which already has five data centers in the Des Moines area, is planning a sixth in 2026.

Two large AI data centers are planned for 2026 construction in or near Cedar Rapids. Alarmed at the use of land and water by data centers, Linn County has recently adopted what is being called some of the country’s most restrictive regulations for their development.