A city utility since 1892

Luverne has owned its electric system for more than 130 years. Today it buys nearly all its power wholesale and keeps a rebuilt diesel plant as a paid backup.

The short version

The village built its own electric plant in 1892, after a private company failed to deliver.
Nearly all power is bought wholesale: most of it federal hydropower, the rest through Missouri River Energy Services (MRES), a joint agency of 61 member cities.
The local diesel plant almost never runs. MRES pays the city to keep it ready, and the city rebuilt it in 2022 with $11.34 million in bonds repaid from electric revenue.
On November 3, 2026, voters decide whether to move the city's utilities from the council to a new five-member commission, three of whose members would be elected.

A city plant from the start

Luverne went public with its power almost immediately. A private franchise came first and produced nothing, so the village built and paid for its own light plant within a few years.

1889
A private electric company tries first, and fails
A private Luverne Electric Light company organized in the summer of 1889 and received a franchise, but never made the promised improvements.Internet Archive
1892–93
The village builds its own plant
Western Electric installed the village electric light system during 1892, and the village accepted it on January 31, 1893. It cost about $9,000, paid in village orders, and the debt was retired by early 1896. (The city website gives 1891; the 1911 county history and the city’s 2025 benefit report both say 1892.)Internet Archive Missouri River Energy Services / City of Luverne
1912
Cutover to three-phase power
The system switched to three-phase generation and distribution, with multi-day outages during the change.Rock County Star Herald

Buying power wholesale, keeping a backup

Since at least 1976, Luverne has bought its electricity wholesale rather than making it: federal hydropower under its own contract, and the rest through a joint agency of small municipal utilities. The local plant became a backup.

1965–1998
A member of the joint power agency
Luverne belongs to the joint-action agency that began as the Missouri Basin Municipal Power Agency in 1965 and became Missouri River Energy Services (MRES) in 1998. It is one of 61 member cities. It is not a member of SMMPA.Missouri River Energy Services
May 1967
The diesel plant goes into service
Federal records list May 1967 as the first operating date for the Luverne plant (EIA plant 1990). It burns distillate fuel oil.GridInfo (EIA-860/923 data)

The backup plant becomes a paid asset

The 2021 polar vortex showed what the plant is for. The city then rebuilt it, signed a contract under which MRES pays for the right to call on it, and set a multi-year rate path.

Feb 2021
Polar vortex: the backup plant runs for days
Luverne ran its generators around the clock for several days to support the regional grid, and MRES paid the fuel and operating costs. Output that year was 314 MWh, the most of any recent year.Rock County Star Herald U.S. Energy Information Administration
Feb 2022
$11.34 million in bonds for a plant rebuild
The city sold $11.34M of Electric Revenue Bonds (Series 2022A, 3.00%, final maturity 2051) for the generation project: two new 3.1 MW diesel generators (about $3M each), a modernized east substation and switchgear, and a new control building. City generating capacity is about 9.7 MW. The bonds are repaid from electric revenue, not property taxes.City of Luverne City of Luverne / MSRB EMMA
Feb 2023
A new capacity contract with MRES
The council approved a revised Reserved Capacity Agreement by motion. Under the posted (unsigned) copy, MRES pays $5 per kW each month to start, adjusted each June for inflation, for 9,300 kW of reserved capacity, for the right to call on Luverne’s generators. The contract’s $2 per kW incentive applies only to units commissioned after June 1, 2023; Luverne’s new units entered service in 2022. A newspaper reported a total of about $16.9M over the 30-year term without showing its math; the base payment alone comes to about $16.7M before escalation. None of these are audited revenue.Rock County Star Herald City of Luverne (Legistar attachment)
2023
A rate study sets a 6% a year path
After a rate study, the council adopted electric increases of about 6% a year for 2024, 2025, and 2026. The 2024 audit reports increases of 4.6% to 5.7% that year.City of Luverne
2024
National reliability award
The American Public Power Association gave Luverne a Certificate of Excellence in Reliability, based on 2019–23 data and presented at a 2025 council meeting. Average outage time was about 3 minutes a year in 2021–23.Missouri River Energy Services / City of Luverne

The 2026 ballot question

An argument over how much utility money goes to city government turned into a charter amendment. What it would change is on the what changes page, and what each side says is under arguments.

Nov 2024
Utility transfers become a campaign issue
Isaac DeBoer runs for mayor on the size of utility transfers to city government and loses to Pat Baustian, 1,366 to 1,226.Rock County Star Herald / Star Media Minnesota Secretary of State
June 3, 2026
First petition rejected
A resident committee petitions to move the electric, water, and wastewater utilities under a new five-member commission with three elected seats. The clerk finds enough valid signatures but rules the petition insufficient because its summary was not pre-approved by the Charter Commission.City of Luverne Legistar
June 30 – July 10, 2026
Resubmitted and certified
The committee files a second petition with the summary the Charter Commission approved. The clerk certifies it on July 10.City of Luverne Legistar City of Luverne Legistar
July 28 – Aug 10, 2026
The council puts it on the November 3 ballot
Resolution 23-26 orders the election. Resolution 24-26 sets the ballot title and question voters will see.City of Luverne Legistar City of Luverne Legistar
Sept 15, 2026
Public forum at the Palace Theatre
Three members of the petition committee and three speakers for the city answer questions from residents.Rock County Star Herald

Where the power comes from today

Almost all of it is bought wholesale. The city's MRES-produced benefit report says its 2024 wholesale cost was below the report's regional comparison; the report does not publish how that comparison was averaged. Federal hydropower from the Western Area Power Administration (WAPA) is the largest share, under a contract through 2050. The rest comes from MRES, under a contract that runs through January 1, 2057. In August 2026 the council approved an amended contract extending it to January 1, 2067, effective January 2, 2027.Missouri River Energy Services / City of Luverne City of Luverne (Legistar attachment)City of Luverne

of 2024 supply was WAPA federal hydropower: 62%; of 2024 supply was WAPA federal hydropowerMissouri River Energy Services / City of Luverne
per kWh in the city/MRES report, vs. its 7.6¢ regional comparison: 4.8¢; per kWh in the city/MRES report, vs. its 7.6¢ regional comparisonMissouri River Energy Services / City of Luverne
monthly MRES starting payment on 9,300 kW of reserved diesel capacity, adjusted each June for inflation (posted, unsigned contract): $5 per kW; monthly MRES starting payment on 9,300 kW of reserved diesel capacity, adjusted each June for inflation (posted, unsigned contract)City of Luverne (Legistar attachment)

The first two figures come from the city's benefit report, which the city publishes with MRES.

Does the capacity contract pay for the rebuild?

Not established. At the $5 per kW starting rate on 9,300 kW, the payment is about $558,000 a year before escalation. For scale, 2025 debt service on the 2022 power-plant bonds was $576,350. But those are gross payments, not a net return: the old unit already earned capacity payments before the rebuild, and the plant has operating and testing costs. A newspaper reported about $16.9 million over the 30-year term without showing its math; 30 years of the $558,000 base payment alone comes to about $16.7 million before escalation. No public model combines these, so this guide does not estimate a payback period.City of Luverne (Legistar attachment)City of Luverne / MSRB EMMA Rock County Star Herald

The city posts a copy of the agreement, which the council approved on February 14, 2023. The posted copy is unsigned.City of Luverne (Legistar attachment)

The plant runs almost never, by design

Over six years the plant generated 659 MWh, against roughly 428,632 MWh sold: about 0.15% of sales. The city is paid for the plant's ability to run when the regional grid is short, not for what it produces.EIA-923 filings

2019: 18 MWh
2020: 36 MWh
2021: 314 MWh (February 2021 polar-vortex run)
2022: 58 MWh
2023: 68 MWh
2024: 165 MWh