Dakota Electric is seeking a 2.1 percent overall increase in electric rates for its 103,000 customers in Dakota, Goodhue, Scott and Rice counties.
In a filing last week with the Minnesota Public Utilities Commission, the state's second-largest electric cooperative requested a 1.5 percent interim rate hike that would take effect in September.
If the full $4.1 million rate hike is approved by regulators, residential and farm customers would see a 2.7 percent increase, according to the filing.
Douglas Larson, the co-op's vice president of regulatory services, said the requested increase is the first in five years and reflects higher costs for labor and material to maintain the distribution system.
Of Minnesota's 44 electric distribution cooperatives, only Dakota Electric has chosen to have its rates set by the PUC. State law allows co-ops' elected boards to set their own rates unless members vote to be state-regulated, as Dakota Electric's did in 1981.