Other things you should know about NPPD’s rates and your costs:
- The impacts of a rate increase vary depending upon individual customers’ usage patterns. A household that uses a lot of energy will obviously pay more than a household that uses energy more efficiently. Learn how you can be more Energywise.
- NPPD’s rates are set so that its revenues cover all of its costs, including the following:
- Gross Revenue Tax - State law requires NPPD to pay 5% on electricity it sells at retail within the cities or villages it serves to the respective county treasurer.
- Professional Retail Operating Agreements (“Pro-Agreement”) - NPPD leases and operates the electrical systems for 80 communities throughout the state. These lease agreements require that NPPD pay each community 12% of the revenue (excluding sales tax) collected from customers.
- These amounts are included in the ‘Electric Charges’ line item on an NPPD retail bill.
The Nebraska Public Power District is the state’s largest supplier of electricity to the people of this state. It generates electricity for nearly 400,000 Nebraskans, 89,000 of whom receive their electricity directly from NPPD at retail. The rest purchase it from another utility that buys power from NPPD at wholesale and resells it to their end-use customers. These wholesale utilities may be a municipality for a community (e.g. the City of North Platte), another public power district (e.g. Dawson Public Power District which serves the rural area around Kearney), or a rural electric cooperative (e.g. Niobrara Valley Electric Membership Corporation which serves Boyd and Holt Counties).
Considered a “summer peaking utility,” NPPD’s greatest demand for electricity happens in the summer, when irrigation and air conditioning loads are high. NPPD serves its Nebraska customers first and typically has enough generation to serve all of its wholesale and retail customers’ needs, but if it need additional energy (as in the summertime when everyone is using more electricity), NPPD may buy additional power on the open market. Power in the summer is usually more expensive than in the winter. That’s why NPPD charges summer and winter rates. In addition, NPPD is a not-for-profit utility. It strategically plans to make just enough money to cover its costs in order to keep electric rates as low as possible. However, weather and necessary investments to keep plants and transmission lines operating reliably can impact NPPD’s cost of doing business, as they did this year.