On the heels of a mid-year rate increase this past July, Lincoln Electric System is proposing to hike rates again in 2026 by about 3.0%.
Residential customers would see their bills increase by $3.22 on average a month — or about $38.64 a year — under LES’s proposed 2026 budget unveiled at the LES Administrative Board’s meeting Friday. Other rate classes would see increase anywhere from 0.8% to 10%.
A public meeting on the proposed rate increase and budget will be held Oct. 9 at 6 p.m. at LES’ operation center at 9445 Rokeby Road. The utility’s board will vote on the budget Oct. 17. If approved, it would go before the City Council in November and take effect Jan. 1.
Emily Koenig, the chief financial officer for the utility, said the proposed rate increase is driven by rising power costs and transmission expenses, factors Koenig added are outside of LES’ control.
“I just want to highlight here that slow and steady rate increases is how you deal with” increasing costs, Koenig said.
LES raised rates by 4% in July, a mid-year rate hike that came on top of a 3.3% increase in LES’ initial 2025 budget. The utility said the mid-year adjustment was necessary to help make the most cost-effective upgrades to meet new power generation regulations.
LES raised rates by 3.7% last year and 4.8% in 2023, marking the end of a five-year period without any increase.
LES’ operating budget is set to increase to $328.8 million, a more than 11% increase from its initial 2025 budget.
LES’ financial staff had hoped to keep the rate increase at or below 2%.
“When we got the actual power cost budget numbers, it was apparent that it was going to be a lot higher than that,” Koenig said. “So we kind of had to go back to the drawing board, and we needed to make some reductions in those items that have been brought over from (2025).”
The utility ended up carving out about $4 million from its budget by making reductions to outside services like vegetation management and travel to training conferences.
Some of those expenses will have to come back in 2027, Koenig said.
“We’re being really mindful of the impact that our bill has on our customers and that we just had a rate increase,” Koenig said.
In addition to the 2026 projection, LES is also forecasting rate increases well into the future. According to current projections, LES may propose another 3% rate increase in 2027 and 2028 and a 3.5% hike in 2029.
LES ranks 10th out of 87 cities for residential affordability, according to a 2025 LES Competitive Market Study. LES is also 16th out of 87 cities for residential bills as a percentage of household income, according to the data presented during Friday’s meeting.
LES customers have lower prices than the U.S. and Nebraska average residential price per kilowatt-hour, according to the study. Nebraska’s average in 2024 was 11.74 cents per kilowatt-hour and the 2026 LES projection is 11.25 cents per kilowatt-hour.
Lucas Sabalka, the chair of the utility’s board, praised the work LES did to keep the rate increase more manageable.
“It was a big effort and a rate increase is not something that I want to be happy about, but I am impressed and grateful that it is where it is — as opposed to where it could be,” Sabalka said.
Reach the writer at nfranklin@journalstar.com or 402-473-7391.
On Twitter @NealHFranklin
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