CAMP POINT, Ill. -- Rising wholesale power costs will mean higher rates for Adams Electric Cooperative customers starting in 2009.

General Manager Jim Thompson said a 16 percent increase, the first rate increase for customers since 2003, should carry the cooperative for two years.

"At the beginning of 2011, we anticipate the need to have another increase, hopefully smaller," he said.

Thompson updated members on the challenges and opportunities facing the cooperative during its 69th annual meeting Wednesday night at Central High School.

Adams Electric is working to limit exposure to the volatile wholesale energy market and become owners in energy generation. The cost of wholesale power, the electricity Adams Electric buys for its members, represents about 60 percent of the cooperative's operating expenses.

The cooperative will own 12 megawatts of the output of Prairie State Energy Campus, a new state-of-the-art, coal-fired generation facility in southern Illinois slated to go online in July 2011.

The cooperative also is working to install two wind turbines, one in Adams County and one in Brown County, with at least one producing power by the end of 2009. And it wants to be involved in the Quincy hydroelectric project on the Mississippi River.

"Combining these new generation resources with our existing generation portfolio, the cooperative will begin to have a diversified power portfolio with a mix of different fuel types, which should help lower our risk and help provide reliable energy to our members," Thompson said.

At the same time, the cooperative hopes to boost energy efficiency among its members. Members received energy-efficiency kits at the meeting, and the cooperative offers low-interest loans up to $15,000 for energy-efficient home improvements.

"If we can help our members use less energy, we can have a direct impact on their electric bill," Thompson said.