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Electric rates continue upward climb PDF Print E-mail
Written by Wauneta Breeze   
Thursday, 18 November 2010 19:23

Wauneta electrical customers can expect another rate hike in January 2011

By Tina Kitt

The Wauneta Breeze

 

Earlier this month the Nebraska Public Power District announced they would be increasing their wholesale electric rates by up to 9.7 percent by January 2011.

As a result, said Wauneta Village Superintendent Bill Bischoff during last week’s meeting of the Village Board of Trustees, the local utilities department will have to pass these increases along to Wauneta residents and businesses.

NPPD, along with WAPA — Western Area Power Administration — is one of the main suppliers of wholesale electricity to Wauneta. When those wholesale providers increase their rates local electrical departments have no choice except to pass those increases along to their customers.

According to information released last week, electric rates for retail and wholesale customers will increase on Jan. 1, 2011, following action take by the NPPD Board of Directors Nov. 5.

Rates for NPPD’s wholesale customers — other Nebraska utility companies and municipalities that purchase power from NPPD and sell to their end-use or retail customers — will increase an average of 9.7 percent.

NPPD’s retail customers — those who receive their electricity and billing statements directly from NPPD — will see an average increase of 11.4 percent.

The coming 2011 rate increase is just the last in a series of escalating rate hikes implemented by NPPD. Recent rate hikes for wholesale power include:

• 6.2 percent in 2007.

• 9.1 percent in 2008.

• 7.0 percent in 2009.

• 5.9 percent in 2010.

Bischoff said plans for future electric rate increases have already been mentioned by NPPD including 9.6 percent in 2012, following on the heels of 2011’s 9.7 percent rate increase.

WAPA power rates, on the other hand, will not increase as dramatically, thanks in large measure to the expiration of a “drought-adder” fee that has been in place in recent years, noted Bischoff.

The Village of Wauneta will purchase a portion of their wholesale power from WAPA which should help buffer the NPPD hike, when averaged out over time.

Board members expressed concern over how these higher rates will affect Wauneta residents, especially those on fixed incomes.

In the end, however, they said they do not see any alternative but to pass these costs along to end-use customers.

Bischoff said he will have consultant Bob McDonald with ESC Engineering in Fort Collins, Colo., analyze the pending rate hike to help Wauneta structure its increases fairly across the different categories of electrical customers and levels of kilowatt hour usage.

In May 2010 McDonald presented a series of options for restructuring the way electrical costs are billed through the Village of Wauneta.

The board implemented several of these suggestions at the time, along with approving a 10 percent electric rate hike.

If this recently proposed rate hike is approved in January it will mean that Wauneta will see electric rates increase by nearly 20 percent in a matter of seven months.

 

NPPD rate increase talking points

In a prepared statement, NPPD said revenue from the increases will be used to support investments in NPPD’s power plants, high-voltage transmission lines and distribution facilities.

Major factors driving the rate hikes include increases in fuel costs, two scheduled major generation plant outages in 2011 and a decrease in revenues from energy market sales.

Retail rate increases also are affected by increased delivery costs due to power line improvements and the installation of electronic meters.

Since 2006, costs for coal and nuclear fuel have increased by 40 percent.

In 2011, the district will have a maintenance outage at Gerald Gentleman Station (delayed from 2009) to help ensure long-term reliability.

Cooper Nuclear Station near Brownville will go through a refueling outage in 2011, which is currently done every 18 months. The two outages will increase costs by approximately $30 million, the utility said.

Also in the mix, Nebraska electric customers are being asked to help subsidize electricity sold out of state at significantly lower prices.

According to an NPPD talking points memo, the price of electricity sold in the energy market has gone down considerably, dropping from an average sale price of $48 per megawatt hour in 2008 to an average of $28 per megawatt hour in 2010.

Lower market prices, coupled with reduced sales outside the state, mean less sales revenue returned to NPPD to offset fixed costs of its generation facilities. In turn, fixed costs must be recovered from NPPD’s Nebraska customers.

Statewide, NPPD’s wholesale customers include 52 municipalities and 25 other public power utilities and rural cooperatives.

 

Utility deposits could cost more in the future

A review of accounts receivable write-offs led members of the Village Board to consider whether more money will need to be required up front on utility deposits for new accounts, especially those involving renters.

For bookkeeping purposes, a total $1,954 in unpaid balances for electrical, water and sewer usage was written off the books. That does not mean, however, that attempts to collect that money will not be pursued.

“Write-off is an accounting term,” advised Attorney Arlan Wine. “It does not mean the debt is discharged.”

In reviewing the list of 15 accounts in default, it was noted that all of them involved rental property, leading the board to question whether higher deposits should be collected from customers who are renters.

Wauneta’s current deposit structure for municipal customers does not differentiate between property owners and renters in setting up utility accounts. The current utility deposit totals $150, with 100 held for electricity and $50 for water.

An overview of other communities in southwest Nebraska shows that many municipalities do collect a higher deposit from renters or require a reference from a utility company.

Members of the Wauneta Village Board said they liked the idea of requiring a reference and if none is provided bumping up the total deposit charged, with Lloyd Sinner suggesting a total deposit of $300 and Tony Cribelli suggesting $200.

The board will take up the subject again as an action item on their December agenda.

 

Tree ordinance approved

A new tree ordinance was approved last week, specifying how far back from the curb or sidewalk trees must be planted and how far apart from each other those street-side trees can be.

According to the new ordinance no trees may be planted within 8 feet of any curb or gutter.

Spacing between street trees was set at a 30 feet minimum for small trees; 40 feet minimum for medium trees; and 50 feet minimum for large trees. Special plantings which vary from this standard will need approval of the Village Board of Trustees.

 

Other business

In further business the board:

• Heard an update on the owner-occupied housing rehabilitation project underway in Wauneta from Ann Burge of Grant with Southwest Nebraska Community Betterment Corporation which is administering the grant funds. Burge told the board that eight homes in Wauneta are on track for significant upgrades utilizing the grant funds, with a goal of 10 homes set for Wauneta. Applications are still being accepted for the program.

• Learned that Wauneta has been nominated for a Nebraska Community Improvement Good Neighbor Award by Imperial for working cooperatively with the neighboring community when they experienced problems with their swimming pool this summer. The board praised Wauneta Pool Manager Keri Sutherland for her efforts in accommodating the Imperial Swim Team and out of town guests using the Wauneta swimming pool this summer.

• Approved the purchase of two new computer systems for the Village Office from BWTelcom at a total cost of $3,365.

• Discussed the need to have either a stop sign or a yield sign placed where Arapahoe Street angles east and merges with Tecumseh Avenue near Highway 6. Board members said they have fielded a number of complaints about some close calls for motorists due to the lack of traffic regulation at that intersection.