Columbus, Neb. – Nebraska Public Power District’s Board of Directors unanimously approved NPPD’s 2016 Wholesale Rate Schedule during a specially-scheduled meeting today in Grand Island.
The rate schedule includes a 3.8 percent overall average increase in 2016 wholesale rates. The increase will be used to fund transmission investments and $25 million in retiree healthcare benefits associated with past service provided to NPPD’s wholesale customers.
Wholesale customers who sign a new 20-year wholesale power contract will receive a rate discount of 3.57 percent because NPPD can finance their portion of the uncollected retiree healthcare obligations over a longer time period. This results in an overall average rate increase for such customers of 0.6 percent.
NPPD’s Board heard from customers both opposed to and in support of the 2016 wholesale rate proposal at a rate hearing Oct. 8 in Columbus.
“Our customers’ feedback, not only at the rate hearing but over the past two years of contract negotiations, has played a critical role in the Board’s approval of these rate options,” said NPPD Board Chairman Ed Schrock. “We believe the rate schedule is fair and non-discriminatory for all customers who have invested in a not-for-profit system which has served a majority of them for more than 45 years.”
NPPD’s new wholesale power contract contains a financial performance standard incenting NPPD to operate competitively for its wholesale customers throughout the duration of the contract, and offers wholesale customers the ability to add up to 10 percent of local renewable energy.
NPPD’s wholesale customers who purchase electricity generated by NPPD and then distribute it to their local customers consist of 25 public power districts and electric cooperatives and 50 municipalities. Board action on retail rates for 2016 for nearly 90,000 end-use customers who receive a bill from NPPD is expected in November; however, the District expects there will be no retail increase for a third year in a row.
In a separate decision by the Board today, NPPD agreed to terms and conditions for a contract with the Loup River Public Power District that calls for the purchase of all energy generated from Loup’s Columbus hydro operations. The new contract becomes effective in 2022 when the current contract ends. It will run through 2035, concurrent with the new wholesale contract that goes into effect Jan. 1, 2016.