Today, Tuesday December 16, 2014, upon recommendation of Management, the Board of Directors of Cuming County Public Power District (CCPPD) voted in an overall rate increase of 3% effective January 1, 2015. This rate increase is mainly a straight pass through of the 1.8% overall increase in the Transmission rate that CCPPD pays to Nebraska Public Power District (NPPD). The remaining 1.2% will cover the ongoing operations of CCPPD, including maintenance of lines and facilities, service upgrades, and generally working to keep the lights on for our customers. The overall increase is 3% however certain customers may see less than 3% while others may see more than 3%. We will be working over the coming weeks to determine the most equitable method of implementing this increase across the various rate classes such as residential, commercial, and irrigation users to make sure that each rate class is paying their fair share. Regardless of which rate class, the lion’s share of the increase will be realized in the area of capacity charges.
There are several layers to the rates that we each pay for electrical service. There are capacity charges. Capacity charges essentially pay for the poles, wires, substations, transformers, and service wires that carry the current to each customer and are commonly referred to as base charge. Capacity charges are set and do not vary from month to month. There are also energy charges that encompass the cost to transmit the energy to CCPPD, the cost of generating the power, along with the overall capability of the regional grid, and demand components. Energy charges are based on kilo-watt-hours used. Because CCPPD does not own generation or large scale transmission lines, we are obligated to purchase the generation, transmission, and grid capacity from a wholesale provider, in our case the provider is NPPD. CCPPD is billed for energy, demand, and transmission on a monthly basis. These costs make up about 2/3 of our overall operating costs.
One of the core values of CCPPD is Accountability. We, the board and employees of CCPPD, make every attempt to take ownership, be decisive, and move forward. While no one likes the idea of an increase in the cost of a needed service like electricity, CCPPD would rather be upfront on the issues and continue moving forward as a provider of choice. We endeavor to provide a service that our customers view as valuable and to serve our customers with integrity, common sense and an understanding of the impact that our decisions have on your everyday lives.