COLUMBUS — Nebraska Public Power District Board of Directors approved a 3.75 percent average rate increase Friday for its wholesale and retail customers.
The increase, effective Jan. 1, represents the seventh consecutive year the state’s largest utility will raise costs for electricity. The district’s wholesale and retails customers were hit with a 6.5 percent average hike for 2012.
NPPD, which originally forecast a 4 percent increase for 2013, will use the additional revenue to repay debt and fund capital projects related primarily to investments in power plants and other facilities. Over the past five years, the district has invested $1 billion in its system, mostly to meet more-stringent compliance and security requirements and maintain reliability.
“It is important to keep rates affordable, but we also know how important it is to ensure reliable service for our customers,” NPPD President and CEO Pat Pope said in a release. “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.”
The utility’s wholesale customers — 51 communities and 25 public power districts and cooperatives — will likely pass part or all of the rate increase on to the end users they serve.
President and CEO Neal Suess said Loup Public Power District is currently projecting a 5 percent average rate hike for next year.
The increase, to be considered by the board of directors Nov. 27, would begin in mid-January.
According to Suess, Loup’s expenses from NPPD are expected to rise by about 4 percent next year and the remaining 1 percent is needed to repay debt and cover other rising expenses. Loup raised its rates an average of 9.5 percent for 2012.
The district serves nearly 19,000 customers in Platte, Boone, Colfax, Nance and part of Madison counties.
The board of directors at Cornhusker Public Power District will meet Nov. 19 to discuss next year’s rates. A final decision on the rates is expected at either the November or December board meeting, with any increase taking effect in January.
Cornhusker raised its rates an average of 6.5 percent for this year. The district serves 9,600 customers in rural Platte, Colfax, Boone, Nance, Greeley and Wheeler counties.
David City, Brainard, Polk and Central City are also wholesale customers of NPPD.
NPPD’s retail rate increases, which affect customers in 89 communities served directly by the utility, are being blamed on higher costs to generate and delivery electricity.
The typical residential customer, using 1,000 kilowatt-hours per month, will see a $5.50 increase to their monthly bill.
NPPD said it bases rates on overall costs, which continue to rise, and balancing this with customers’ needs continues to be a challenge.
“NPPD’s rates continue to be competitive both regionally and nationally, and we fully understand the vital role electricity plays in the lives of our customers,” said Pope. “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.”