This covers the expenses to build and maintain power lines, substations, and various equipment necessary to ensure power is available to you whenever you need it (keep you connected to the grid). It also includes the costs of creating and maintaining customer account information, billing, systems, and payment remittance. This charge is the same amount every month.
You will notice fluctuation in this line item from month to month, as it reflects your energy consumption. You will see the amount of kilowatt hours (kWh), for residential customers, delivered to your meter for each billing period. (Some commercial and industrial customers will see a line item for both kilowatt hours and kilowatt (kW) demand.) This charge covers the costs involved in generating power and delivering it to your meter; the price per kilowatt hour varies based on Winter (October 1 to May 31) and Summer (June 1 to September 30) seasons.
Lease Payment -- The Professional Retail Operations (PRO) Agreement NPPD has with your community allows NPPD to “lease” the system and partner with the community to deliver reliable service. NPPD is required to pay a percentage of the revenues collected from customers purchasing electric service from the leased system to the cities and villages as a Lease Payment. This means NPPD pays the cities and villages based on the sum of each customer’s total bill, less sales tax, on a monthly basis.
Gross Revenue Tax -- As stated in Article VIII, Section 11 of the Nebraska Constitution, NPPD is required to pay gross revenue taxes on those revenues collected from within the corporate limits of Nebraska municipalities. These payments are then submitted to the respective County Treasurer for disbursement to the appropriate taxing entities in the county. If you do not live within the corporate limits of a municipality, you will not see a Gross Revenue Tax line item.
As stated above, the amount of lease payment is based on the adjusted gross revenues received, and the specific percentage is determined by the cities and/or villages. All cities and villages are paid at least 12% Lease Payment, and a 5% Gross Revenue Tax (for customers whose service location is located within the corporate limits of a municipality). Here is the Lease Payment calculation using our example bill: Add the Customer Charge ($22.50) and the Energy and Delivery Charges ($113.96; our example bill was calculated using Summer rates) for a total of $136.46.Using this total, add the Lease Payment and Gross Revenue Tax percentages, 12% and 5%, or 0.12 and 0.05, respectively, and subtract from 1, or 100%, for a total of 0.83. Next, divide $136.46 by 0.83. This calculates to $164.41.To isolate the amount of Lease Payment, calculate 12% of $164.41 ($164.41 x 0.12) for a total of $19.73.
In the case of our example bill, add the Customer Charge ($22.50) and the Energy and Delivery Charges of $113.96, for a total of $136.46.From here, subtract the Lease Payment percentage 0.12 from 1, or 100%, for a total of 0.88. Next, divide $136.46 by 0.88. This calculates to $155.07.To isolate the amount of Lease Payment, simply subtract the subtotal of the Customer Charge and Energy and Delivery Charges as shown: $155.07 - $136.46 = $18.61.
This is calculated at 5% based on the adjusted gross revenues received. Here is the Gross Revenue Tax calculation using our example bill: Add the Customer Charge ($22.50) and the Energy and Delivery Charges ($113.96) for a total of $136.46.Using this total, add the Lease Payment and Gross Revenue Tax percentages, 0.12 and 0.05, respectively, and subtract from 1 (or 100%) for a total of 0.83. Next, divide $136.46 by 0.83. This calculates to $164.41. To isolate the amount of Gross Revenue Tax, calculate 5% of $164.41 ($164.41 x 0.05) for a total of $8.22.
The amount of state sales tax is calculated at a rate of 5.5% on the total Customer Charge, Energy and Delivery Charges, Lease Payment, and Gross Revenue Tax, if applicable ($22.50 + $113.96 + $19.73 + $8.22 = $164.41) $164.41 x 0.055 = $9.04.
The amount of city sales tax varies from 0% to 2% and is applicable only to those service locations located within the corporate limits of a municipality. Our example bill was calculated using a 1.5% city sales tax, and used the same subtotal as the Nebraska Sales Tax (Customer Charge, Energy and Delivery Charges, Lease Payment, and Gross Revenue Tax, if applicable: $22.50 + $113.96+ $19.73 + $8.22 = $164.41) $164.41 x 0.015 = $2.47.