Dive Brief:
- Two municipal utilities in Nebraska are moving to charge their customers higher fixed charges and less based on how much power they use, the Lincoln Star Journal reports.
- Lincoln Electric System (LES), the Nebraska capital's municipal utility, got unanimous approval from its board of directors this fall to increase its 2016 monthly fixed rate for residential customers from $11.15 to $13.40. The Lincoln City Council unanimously approved the plan on Dec. 7.
- The board for Omaha Public Power District (OPPD), the muni for Nebraska’s biggest city, voted 6-2 on Dec. 17 to increase its residential/small business fixed monthly fee from $10.25 to $30 and decrease its volumetric charge to 22% below its present level by 2019.
Dive Insight:
The utilities say the fixed charge increases are necessary to cover infrastructure costs and spread them more equitably between high- and low-consumption customers. Opponents say it penalizes low volume users and discourages efficiency by decreasing the value of reduced usage.
Only 6% of LES’s expenses for upgrading and maintaining infrastructure are now covered by its fixed charges, according to the Star Journal. A spokesperson from the muni told the paper it will continue increasing the fixed portion of its customers’ bills until it covers 75% of infrastructure costs. In 2016, a monthly fixed charge of $23.90 would have been necessary.
Bold Nebraska, a coalition of consumers and environmentalists, vigorously opposed the OPPD rate restructuring, arguing that the over 300% fixed fee increase limits customers’ control over their bills and discourages distributed generation and energy efficiency.
At least 26 monthly fixed charge increases for residential customers were being considered in the third quarter of 2015 across 18 states, according to a recent quarterly review of solar policy proceedings. The average requested fee increase was 70%, according to study co-author Benjamin Inskeep.
