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FAQs - 2022 Proposed Rate Increase

FAQs - 2022 Proposed Rate Increase

OPPD asked its Board of Directors to approve an average rate increase of 2.5% across its five customer classes to cover a budget deficit of nearly $26 million in 2022 to improve and modernize its electrical system. Find answers to frequently asked questions here. 

Additional Resources:

2021 Biennial Report on Rates
Preliminary 2022 OPPD Rate Manual
Preliminary 2022 Corporate Operating Plan

Will OPPD electricity rates go up in 2022?

OPPD hasn't had a a general rate increase for the past five years. As OPPD works to improve resiliency and reliability, OPPD is asking its Board of Directors to approve an increase effective Jan. 1, 2022. This increase is needed to cover the rising cost of materials and labor, as well as the need to invest in OPPD systems for growing communities and to maintain the health of existing structures and equipment.

OPPD conducted extensive research to determine the exact figures that will satisfy OPPD’s budgetary needs, while minimizing the monetary impact to customers as much as possible. Proposed increases reflect the revenue shortfalls in each customer class, more accurately reflecting the cost of the power you use when you use it.


Why is this happening?

OPPD is looking at a revenue deficit of nearly $26 million in 2022, as the utility works to improve and modernize the electrical system. Capital improvements will serve growing communities, as well as maintain the health of OPPD's existing structures and equipment.

Rate increases will address areas such as increased maintenance of overhead lines, including tree trimming and transmission upgrades, ensuring reliability and resiliency. The budget will also address technology upgrades for improving the customer experience, including multiple ways in which OPPD and customers interact – from customer service to outage response and communications, among other areas. It will also help cover rising material and labor costs. The steps OPPD is taking will position the utility to better serve its customers for decades to come.


How much will our rates increase?

Overall, rates will increase an average of 2.5%. However, these increases will vary between customer classes – residential (3.2%), commercial (.9%), industrial (3.2%), and streetlight, such as cities, counties, and sanitary improvement districts (2.5%).


Why does the rate increase vary between customer classes?

Increases will address the specific needs of each customer class. With the residential class, for example, OPPD is budgeting more for tree trimming throughout our service territory. This investment will help us ensure your power remains reliable and resilient in the event of severe weather. With streetlight customers, LED lights are saving energy and reducing bills. However, OPPD must still bring in enough revenue to meet the associated infrastructure needs.


What does a rate increase mean for my monthly bill? How much will it go up?

The increase will vary slightly from month to month depending on how much energy a customer uses, when they use that energy, and to which rate they subscribe. With the proposed budget, OPPD's residential customers would see a rate increase of 3.2%, when averaged throughout the year. The overall bill impact for the average residential customer, using approximately 1,000 kilowatt-hours per month, would equate to $35.60 more over the course of a year. It would be noticed more in the summer months, when customers typically use more energy, than the non-summer months.


Will these increases prevent rolling power outages like we saw last winter or extensive power outages like we saw with storms over the summer?

These increases are supporting infrastructure that will help prevent power outages. There will always be unforeseen issues that cause service disruptions. We cannot always prevent outages. However, the steps OPPD is taking will help modernize the utility for the future and support a reliable, resilient grid.


When was the last time OPPD increased rates?

OPPD’s last general rate increase of 3.4% took place in 2016.


Will we see the increase year-round, or only during certain months?

We have provided increase percentages based on an average of summer and non-summer bills. Increases for most customers, with the exception of customers with heat pumps, will be lower in the non-summer months. However, they will be higher in the summer months, when energy demand on the system is higher.

You can help control your bill by conserving more energy. OPPD has tips and tools to help with energy efficiency at OPPD.com/ee. Customers who want to rely on a steady monthly bill should consider enrolling in our level payment plan, if they are not already on that plan. They can do so by emailing the Customer Care team at customerservice@oppd.com or by calling 402-536-4131 in the Omaha calling area, or toll-free outside of the calling area, at 1-877-536-4131.


What are you doing to help customers facing financial hardship?

OPPD understands the challenges customers may face and has a range of programs to help those struggling to pay their utility bill. Some of these programs involve collaboration with other organizations. More information is available on OPPD's energy assistance page. Customers may also contact a Customer Care representative by emailing customerservice@oppd.com or by calling 402-536-4131 in the Omaha calling area, or toll-free outside of the calling area, 1-877-536-4131. OPPD urges customers to call before they fall behind on their bills so that OPPD can work with them on a solution.


What are your rates like compared to other utilities in our region?

OPPD closely monitors rates and provides annual reports to the Board of Directors on how we compare with other utilities throughout the region, based on information published by the U.S. Energy Information Administration (EIA). The board set a directional rate performance guideline by using the West North Central (WNC) regional average as a benchmark. This region includes North Dakota, South Dakota, Minnesota, Iowa, Missouri, Kansas, and Nebraska. 

The latest data from EIA shows that in 2020, all OPPD rates were on average 8.8% below the WNC regional average. Our average residential customer rate was 4.7% below the region’s average. Our average commercial rate was 7.3% below the WNC regional average, and our average industrial rate was 13.9% below the region’s average.


Are the new solar and gas facilities the reason our rates are going up?

There is no single factor, but rather a mix of utility and customer needs that are contributing to the 2022 rate increases. They are driven, primarily, by the need to invest in the overall health of the existing system for reliability and resiliency now and in the decades to come. The budget includes investments in such areas as technology, property and preparedness, customer service, energy delivery, and energy production.


Is the decommissioning of Fort Calhoun Station contributing to the rate increases?

No. The decommissioning budget comes from a separate fund, and OPPD is on-track with the anticipated expenditures.


Are your decarbonization plans contributing to the rate increase?

OPPD is working toward a goal of being a net-zero carbon producer by 2050. We are still studying various ways to accomplish that goal without sacrificing reliability and resiliency. However, the utility will likely have to budget for some of these solutions in the future.


You have hired or promoted executives this past year. Are our rates going up to cover their salaries?

No. In fact, we actually consolidated two, top-level positions into one as part of our recent changes. This consolidation brings our generation teams together with our transmission and distribution teams. This is just one of many examples of how OPPD is working efficiently and effectively for the benefit of our customers.


What have you done internally to control costs?

OPPD has worked and continues to work to be good financial stewards for customer-owners. Some of our lean business practices include the following areas:

Staffing: OPPD has deferred hiring in staff in a number of areas. In addition, when roles become vacant OPPD reviews the role to determine necessity. Other options include shifting staff responsibilities where possible to cover for the open position. In addition, OPPD has used outside contractors for some short-term projects instead of hiring additional staff. When planning for outages at the baseload generating stations, OPPD has minimized overtime where possible and used outside contractors instead of hiring permanent staff.

Training: Due to COVID-19, OPPD cut expenses by using online platforms for most training/conferences, which cut some travel expenses. OPPD also used this opportunity to review some training/conferences and in some cases, switched to more cost-efficient methods via these online platforms. We also reduced planned employee development training, where possible. There is also some non-training travel that has been reduced by the use of virtual meetings. 

Administrative/other: OPPD has reduced furniture purchases, and some planned brand marketing expenses. OPPD has also used advances in Supply Chain Management to find the most economical option for most purchases. With remote work, OPPD has also cut material and supply costs. We are coordinating technology upgrades to ensure the most effective use of our budget. We are also reviewing all of our software to try and eliminate any duplication of capabilities. And, we have narrowed the scope on a number of projects across the company to achieve cost-savings wherever possible without sacrificing electric service reliability or safety.

Bond refunding: OPPD’s finance team continues to achieve savings through bond and commercial paper refunding. Our bond refunding issue for 2021 resulted in a net present value savings of approximately $7.8 million. In addition, the utility anticipates a net present value savings of $41 million after refunding subordinate debt with commercial paper in 2019 and 2020. Since commercial paper has varying interest rates, the exact savings will not be known until it is realized. Bond refunding achieved $16.9 million in net present value savings in 2019 and $15.1 million in 2018.


How will you communicate rate changes to customers?

We understand some customers desire a deeper understanding of the rate changes. OPPD is committed to engagement, education and transparency around the rates process. The utility offers opportunities to meet customers where they are, providing more information, and addressing rate-related questions and the 2022 Corporate Operating Plan, in general. Through OPPD's Speaker’s Bureau, as well as digital channels such as social media and emails and direct contact with large customers and key stakeholders, OPPD is able to share information about assistance programs and other ways customers can help control their utility costs. The work of educating and communicating with customers does not end with the presentation of the 2022 Corporate Operating Plan. OPPD plans to continue these efforts well into 2022 to help customers understand and adjust to the rate changes in their bill.


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