Nebraska Public Power District proposes new rates
Columbus, Neb. – On Thursday, during a requested rate hearing, the Nebraska Public Power District Board of Directors took comments from its wholesale customers both against and in support of the District’s proposed 2016 electric rate proposal.
The rate hearing opened with an overview of NPPD’s proposed 2016 General Firm Power Service (GFPS) Rate Schedule. Customers were then given the opportunity to share their concerns or support for the proposal.
“The hearing is an important part of our business communications with customers,” explained NPPD’s Pricing, Rates & Wholesale Billing Manager Todd Swartz. “In addition to accepting comments about rates, NPPD has also been working with wholesale customers for more than two years to negotiate terms of a new wholesale power supply agreement.”
No action was taken by the Board of Directors, but it is expected that a vote on the wholesale rate proposal may be conducted before the end of October.
The Rate Proposal
The GFPS rate proposal calls for an average 3.8 percent overall wholesale rate increase for 2016, which is comprised of a proposed 3.7 percent increase in production rates and a proposed 5.7 percent increase in transmission rates. Production costs comprise nearly 90 percent of the wholesale power costs and transmission costs make up the remainder. The production rate increase is needed to cover an additional $25 million in uncollected retiree healthcare obligations associated with past service. The transmission rate increase reflects the cost NPPD pays for transmission investments in the Southwest Power Pool (SPP).
“The rate schedule proposed to the Board of Directors meets the requirements of state statutes and the wholesale power contract,” said NPPD President and CEO Pat Pope. “Collecting funds for past service now, rather than later, is a fair and reasonable approach.” NPPD is collecting from all customers who benefitted from the services provided, regardless of whether or not a customer signs a new power supply contract with us. The difference is the timeframe over which these costs are collected.
Wholesale customers who choose to sign a new, 20-year wholesale contract will receive a 3.57 percent discount on their 2016 production demand energy rates because NPPD can finance their uncollected retiree healthcare obligations over a longer period of time. The 2016 overall average rate increase for such customers would be 0.6 percent.
NPPD wholesale customers who remain on the existing contract will see an average 3.8 percent rate increase in 2016.