Rethinking Rates - 2015
Rate-restructuring plan and Low Usage/Low Income Transition Program start in June 2016
The OPPD Board of Directors approved a rate-restructuring plan at the board’s monthly meeting on Dec. 17, 2015. This plan is revenue-neutral to OPPD, but will strike a better balance between our fixed and variable costs.
The rate-restructuring gradually increases the fixed service charge for residential and small commercial customers, and gradually decreases the variable charge for energy usage.
On average, 70 percent of the charges on these customers’ bills will remain variable, so they can still save money by using less electricity.
To help qualifying low-income customers adjust to the higher service charge, OPPD developed the Low Usage/Low Income (LU/LI) Transition Program.
View presentations on both of these topics.
The increased service charge and decreased usage charge for residential customers will be phased in as follows.
June 1, 2016: Service charge increases from $10.25 to $15. Usage charge decreases by 5 percent
Jan. 1, 2017: Service charge increases to $20. Usage charge decreases by 11 percent
Jan. 1, 2018: Service charge increases to $25. Usage charge decreases by 16 percent
Jan. 1, 2019: Service charge increases to $30. Usage charge decreases by 22 percent
The charts below illustrate how the new rate structure will impact residential bills, as of June 1, 2016, and Jan. 1, 2019. The charts show three categories of customers, based on their monthly charge for kilowatt-hour (kWh) usage.
Low: Less than $80 usage charge
Average: $80-$125 usage charge
High: More than $125 usage charge
Help for Low-Usage Customers with Low Incomes
The net impact of the rate restructuring will result in low-usage customers paying $2 to $12 more on their monthly electric bill.
Note: Not all low energy users are part of the low-income population. About 60 percent of OPPD customers who are low energy users also have low incomes.
For low-usage customers who have low incomes, OPPD has developed a Low Usage / Low Income (LU/LI) Transition Program.
Low Usage/Low Income Program Highlights:
- This program will provide more time for these customers to adapt to the rate restructuring.
- Customers will qualify if they use less than 600 kilowatt-hours (kWh) per month and are enrolled in the state Low Income Home Energy Assistance Program (LIHEAP). Customers must apply for LIHEAP annually.
- Once a customer is LIHEAP-qualified for a specific year, their monthly usage will be evaluated during each of the 12 bill cycles to determine if they are eligible for a credit on their bill for that particular month.
- Credits will start at $2.50 per bill in June 2016, and increase to $7.50 per bill by Jan. 1, 2019.
- Starting in January 2020, the credit will decrease to $5, and end completely by June 1, 2020.
- For qualifying customers, instead of seeing an average $9 increase by 2019, they will instead see $1.50 increase that year.
- Approximately 15 percent of OPPD’s low-income customers will be ineligible for monthly credits, while 18 percent will receive credits for all 12 months.
- The average low-income customer will receive credits for six months of the year.
The charts below show: 1) the timing and progression of the new service charge and LU/LI credit, and 2) the estimated impact on three customer types based on the rate restructuring and LU/LI Transition Program in 2019.
Background Information: Why Restructure Rates?
Today, 90 percent of your bill is based on how much energy you use. This has been the common practice for utilities across the country.
But only 30 percent of OPPD’s costs are related to how much energy our customers use. The other 70 percent is spent on infrastructure, equipment and personnel – things that we need to pay for no matter how much energy is consumed.
And with trends like rising costs and the slowing growth of energy usage due to energy awareness, increases in energy efficiency and new technologies, we needed to find a new way to maintain balance.
OPPD is raising the service charge for all residential and small commercial customers. At the same time we are lowering the usage charge – the amount you pay for the electricity you use. (Our large industrial customers already have a billing structure that adequately covers their portion of the fixed costs.)
These changes will not bring in any additional revenue to OPPD, but will more accurately reflect the cost of providing reliable service to our customers.
If you would like to learn how your account will be impacted, fill out acomment form and someone will contact you.
How We Reached Out to You
Over the last several months, we sought our customers’ input on the proposed rate restructuring through:
~ 10 focus groups (8 for residential customers, 2 for commercial)
~ 8 public open houses across our service territory
~ Online comments made via OPPDListens.com
~ Online research panel (1,380 residential customers with low/average/high usage levels)
For More Information
Here is the Rethinking Rates video we produced as part of the Stakeholder Process. If you have additional questions, please see this list of Frequently Asked Questions.
The Assistance Program can help you pay your energy-related expenses.
Our Level Payment Plan will eliminate surprises in your bill by letting you know exactly how much your monthly payment will be no matter the weather.
Send Us Your Comments
Provide your comments online and let us know your thoughts about rate restructuring.
Provide affordable, reliable and environmentally sensitive energy service to our customers.
OPPD is Committed to:
- Listening to, understanding and appreciating its customers, employees and stakeholders and their issues and concerns.
- Partnering with customers, employees and stakeholders.
- Continuing to build relationships with all customers, employees and stakeholders.