Nebraska Public Power District's Board of Directors approved a 3.75 percent average rate increase for both its wholesale and retail customers Friday. The increase will take effect Jan. 1, 2013.
The 3.75 percent is only an average rate and individual customers will see varied rate increases depending on how much power they use. NPPD's retail residential customers (using approximately 1,000 kilowatt-hours per month) will incur an average increase of $5.50 on their monthly electric bill.
NPPD has been discussing this rate adjustment amount with customers since early this year, and is slightly less than the four percent average increase that was originally discussed.
NPPD's wholesale customers include rural public power districts and municipalities who buy their power from NPPD and then distribute that to their customers. Retail customers are people that receive an electric bill directly from NPPD.
The money NPPD makes off its wholesale rate increase will be used pay off debt and capital expenditures related primarily to investments in plants and facilities.
Over the past five years, NPPD has invested approximately $1 billion in its system to keep up with compliance and security requirements as well as maintain the reliability of the existing infrastructure.
NPPD's retail rate increase is due primarily to the continuing upward pressure on costs to generate and deliver energy.
"It is important to keep rates affordable, but we also know how important it is to ensure reliable service for our customers," said NPPD President and CEO Pat Pope. "To lessen the increase we took steps this year to lower our cost-based budget $15 million by canceling or deferring projects, travel and training that did not jeopardize safety or reliability."
"We are not happy with where we are at from a rates perspective and remain committed to working internally and with our customers to best manage cost challenges going forward," said Pope.