The Estherville City Council approved an increase in electric rates at its regular meeting Monday.
Estherville city Administrator Penny Clayton explained there are two reasons for the increase.
The first reason is that wholesale prices from Iowa Lakes Electric Cooperative will increase on Jan. 1, 2014.
The second reason is for needed improvements for the internal combustion engines at the electric plant to be complaint with EPA requirements.
"We must be in compliance with the EPA standards by May of 2014," Clayton said.
Clayton said the average homeowner who uses 644-kilowatt hours will pay an additional $3.22 per month. The increase will take effect with the bill that is due Nov. 20.
Clayton said wholesale rates are expected to level off.
"We hope not to have to increase the rate again next year," she said.
In other business, council approved a bid of $151,039 from NorthStar Agency to provide auto, property and liability insurance.