Nebraska Public Power has informed the City of Ord of a proposed 4.32% wholesale electric rate increase effective January 1, 2013. The estimated increase based on the city’s usage from last year is $89,597.00. NPPD listed the following drivers for the increased rates: increased capital costs, increased operation and maintenance costs, increased retiree health care costs, and increased fuel costs.
The Environmental Protection Agency’s new RICE NESHAP regulation requires the City of Ord to install catalytic converters on each of the power plant’s five engines. The compliance deadline is May 15, 2013. According to the EPA, the city’s small electric power plants are big contributers to the world’s air emission problem. The estimated cost to install all the compliance equipment required is $500,000.00. This will require a 10 year financing bond with an annual pay of $80,826.00.
The City’s power plant is currently leased to NPPD until the year 2021. The plant can generate more than enough electrical power to supply the City of Ord’s electric demand during an emergency situation. The current $34,000 monthly lease payment from NPPD is used to maintain and operate the plant and also subsidizes rates of Ord’s electric customers.
The power plant is a very important asset to the City of Ord and NPPD. It is used to generate and stabilize voltage in this area. This need was more evident than ever with the high demand on our system this past summer with he high temperatures and drought that occurred.
The combination of NPPD’s wholesale power increase and the City’s bond payment creates a need for an additional $170,433 per year. A rate increase of 8.06% is needed to break even on the increased rate.
NPPD’s wholesale power increase combined with the EPA regulations have forced the City of Ord to pass along an 8% electric rate increase for it’s customers.
The Utility Department has strived to deliver all of its customers with reliable, low cost utilities, but NPPD and the EPA are making it very difficult.
The City realizes the adjustments that everyone has to make during these difficult financial times, but NPPD and EPA increases are too high for the Utility Department to absorb and stay income positive.
City of Ord customers will see the increase on their January 15, 2013 bill.