NPPD approves higher rate hikes for some customers

A rate hike approved Wednesday for some Nebraska Public Power District electricity customers is likely to be challenged in court.

Meeting in Grand Island, the NPPD board voted 11-0 for a 3.8 percent rate increase next year for wholesale customers who don’t sign a new, 20-year contract. Those who do sign will get only a 0.6 percent increase.

NPPD says it needs extra money to pay retiree health costs. It says it can spread those costs over time for customers that sign new contracts, but has to recoup the money more quickly from customers who might leave. Following the vote, NPPD Board Chairman Ed Schrock, a former state senator, suggested the future of Nebraska’s unique all-public power status may once again be at stake.

“I saw public power in Nebraska come under attack in the Legislature, even from the speaker of our Legislature who wanted to sell public power,” Schrock said. “I believe that if public power in rural Nebraska’s going to stay strong, NPPD is going to be an integral part of that. And without long-term contracts and support from our customers that’s not possible.”

So far, three municipalities – South Sioux City, Wayne, and Wakefield -- and one rural public power district -- Northeast Nebraska Public Power -- have said they will reduce or stop buying electricity from NPPD by 2022, because they can get power cheaper from another supplier.

NPPD says 10 other municipalities have agreed to signed new 20-year contracts.

That leaves more than 60 wholesale customers to decide what to do by the end of this year, or face the larger rate increase next year. (To see if you are a retail customer of an NPPD wholesale customer, click here).

Among them is Southern Power District, which serves rural customers in half a dozen counties around Grand Island.

“We still have to consider our retail customers. What’s in the best interest for them?” asked Neal Niedfeldt, Southern's president and CEO, after Wednesday’s vote. “Who in the long term can provide low-cost power so we can offer the best rates for our customers? And that goes along with the service that we offer them.”

Schrock says NPPD expects to keep most of its customers, but expects to lose some, accounting for 3 to 10 percent of its total revenues.

Mark Shults of Northeast Nebraska Public Power calls a lawsuit over the new rates “very likely.”