OPPD proposes modest rate increase to support continued reliability, overall health of electric system
November 16, 2023
Omaha Public Power District is asking its Board of Directors to consider an average 2.5% increase in retail rates across all customer classes for 2024 as part of the utility’s proposed 2024 Corporate Operating Plan (COP).
OPPD Chief Financial Officer Jeff Bishop presented the preliminary $2.1 billion budget to directors during their committee meetings this week and again during this evening’s public board meeting.
“The rising costs of net power to serve our load, both existing and new growth, and inflationary and supply chain pressures are contributing to the proposed rate action,” said Bishop. “In addition, OPPD continues to invest in work that supports the reliability, resiliency and the overall health of our system during a transformational period for OPPD and the industry as a whole.”
Bishop noted that budget priorities for 2024 include modernizing infrastructure and putting programs into place that enable customers to better manage their energy use, which allows them more control over their energy bills.
Under the preliminary COP, the proposed residential rate would increase by 1.6%, adding approximately $0.44 to the average monthly bill of $111. Over the course of the year, this would equate to $5.28. The overall impact could be higher for some customers, based on their usage, customer class and cost of service.
Since bills are calculated based on energy usage, conserving energy will lessen the impact. OPPD has strategies and tools to help with energy efficiency, including how-to videos, at OPPD.com/ee. OPPD also has a number of rebates and incentives for reducing energy usage available by visiting OPPD.com/save.
Bishop said the district’s rates have become increasingly more competitive compared with the national average over the last five years. OPPD’s retail rates were 26.5% below the national average in 2022, according to the Energy Information Administration. The proposed average rate increase of 2.5% for 2024 is generally lower than other utilities’ rate increases. Among 11 peer utilities located in both the Midwest and elsewhere, the average increase is 4.8%.
“OPPD understands the challenges some customers may face with even a modest increase,” said Tim McAreavey, vice president of Customer Service. “We want to encourage anyone struggling to pay their bill to call us so we can work with them before they fall behind.”
“OPPD works very hard to manage the costs we must ask customers to pay. The modest increase we are proposing remains below the average rate of inflation in the United States,” said Bishop. “It would ensure OPPD continues to maintain competitive rates and support a robust system that our customers can count on.”
Customers can view the detailed preliminary budget for 2024, including proposed rate increases, and ask questions via OPPDCommunityConnect.com. Directors will vote on a finalized COP at their Dec. 21 meeting.
Public Utility Regulatory Policies Act amendments
This week, the board also reviewed amendments to the Public Utility Regulatory Policies Act (PURPA) that were adopted with the Infrastructure Investments and Jobs Act of 2021. PURPA was originally enacted in 1978 in response to the 1973 energy crisis to promote energy conservation and greater use of domestic energy and renewable energy. Congress periodically updates PURPA to facilitate these goals. Public power utilities, like OPPD, are required to consider the amendments, provide for public consideration and comment and make determination on the amendments based upon its current activities and public comment received.
There are two retail service standards currently under consideration. The first would promote the use of demand response and demand flexibility by customers to reduce electricity consumption during periods of unusually high demand. The second would require each state to promote the availability of electric vehicle charging infrastructure, improve the customer charging experience, accelerate third party investment in charging, and appropriately recover costs of delivering electricity to EV’s and EV chargers.
The public is invited to submit comments in writing through OPPDCommunityConnect.com/PURPA through Dec. 17 or provide verbal comments in person or via Webex during the board’s regular meeting Dec. 21 at 5 p.m. At this meeting, the board will make their determination based on the consideration of the PURPA amendments and public comments submitted.
In other action, directors:
- Approved the September 2023 Comprehensive Financial and Operating Reports, the October 2023 meeting minutes, and the Nov. 16, 2023, agenda.
- Discussed and accepted the Strategic Directive (SD) 11: Economic Development and SD-12: Information Management and Security monitoring reports. Acceptance means the board finds the utility sufficiently in compliance with the directives.
- Discussed revisions to SD-4: Reliability. Customers may view and comment on revisions at OPPDCommunityConnect.com through Dec. 17.
- Approved a request to exceed 2023 COP expenditures primarily due to extended outages at generation units, resulting in additional energy production and purchased power expenditures.
- Authorized utility management to enter into a negotiated contract or contracts to procure galvanized steel transmission and substation structures for the district’s projects over the next five years, subject to review and approval of the final contract(s) by the OPPD’s general counsel.
- Awarded a contract to High Voltage Inc., in the amount of $3,546,600, for construction services to build and modify transmission lines to connect a new OPPD substation in northwest Omaha to the transmission network. Work is scheduled to begin in December and conclude in the second quarter of 2024.
- Authorized utility management to negotiate and enter into a negotiated contract for the purchase of a new substation control building, which is needed to replace an existing building nearing the end of its life span and is too small to fit new security equipment.
- Approved the rescinding of a resolution to eliminate redundant authorities for draft account payments.
- Received the monthly President’s Report, available at OPPD.com/BoardMeeting.
Next board meetings
The next all-committees meeting will be held in-person Tuesday, December 19, at 10 a.m. at Blue Cross Blue Shield, 1919 Aksarben Dr., as well as virtually, via Webex. The meeting link will be available at OPPD.com/CommitteeAgenda, beginning about 9:45 a.m.
The next monthly board meeting is Thursday, December 21, at 5 p.m., both in-person at the Legislative Chamber of the Omaha-Douglas Civic Center, 1819 Farnam St., as well as virtually via Webex. The public can attend virtually by accessing the meeting link and instructions at OPPD.com/BoardAgenda, beginning at 4:45 p.m.