OPPD continues to invest in reliability, resiliency and growth under proposed 2025 corporate operating plan

This week, Omaha Public Power District leaders shared the utility’s preliminary Corporate Operating Plan (COP) for 2025.

Chief Financial Officer Jeff Bishop presented the proposed $2.3 billion budget to directors during their committee meetings Tuesday. If directors approve the proposed COP at December’s board meeting, OPPD will implement a 6.3% average increase among all customer groups. Residential customers would see an 8.4% average increase, representing an increase of around $9.44 on an average bill of $113. All proposed rate adjustments would be effective beginning Jan. 1, 2025.

The increase includes an average 4.9% general rate increase and a 0.4% increase from the Fuel and Purchased Power Adjustment (FPPA), which is a line item on bills. It also includes a 1% increase from the Rate Stabilization Account to help cover some of the unanticipated costs from this year’s extreme weather. The FPPA is a commonly used industry practice that helps manage costs outside of a utility’s control, such as fluctuating fuel prices as well as power purchased on the energy market.

The FPPA and general rate adjustments proposed for each customer group follow. Rate adjustments vary slightly by customer group, as they correlate with the specific investments needed to maintain reliable, resilient service for each respective customer group.

• Residential: 8% general rate increase plus 0.4% FPPA increase for a total impact of 8.4%
• Commercial: 4.1% general rate increase plus 0.5% FPPA increase for a total impact of 4.6%
• Industrial: 5.1% general rate increase plus 0.3% FPPA increase for a total impact of 5.4%
• Lighting: 8% general rate increase plus 0.1% FPPA increase for a total impact of 8.1%
• Wholesale: 8% general rate increase plus 0.6% FPPA increase for a total impact of 8.6%

Bishop said several factors are driving the rate action. There has been an increase in the average price to serve our customers’ electric load – both existing and new growth, including higher purchased power prices. This accounts for the proposed FPPA adjustment.

In addition, OPPD continues to invest in work that supports reliability, resiliency and the overall health of our system during a transformational time for OPPD and the industry — all while inflationary and supply chain pressures continue to affect costs.

“OPPD and its customers experienced numerous severe weather events throughout 2024. The cost to serve our customers during these events were material and not anticipated, which represents approximately one-quarter of the rate increase,” Bishop said. “The remaining request is focused on investing in reliability, resiliency and growth along with modernization of our technology and facilities that will serve our customers and employees well into the future. This will be delivered in the form of increased capital investment in our generation resources and investments to modernize our grid, along with increased resources for critical activities such as vegetation management and headcount.”

To support reliability, the preliminary COP includes a $12 million increase to the tree-trimming budget, bringing the total investment to $29 million for 2025. OPPD wants to be able to cut back trees near electric lines more often. Currently, each circuit throughout our 5,000-square-mile service territory is trimmed every seven or eight years. The goal is to get that down to every five years or so.

“We know that even a small billing increase can create hardships for some of our customers,” said Vice President of Customer Service Tim McAreavey. “We encourage anyone struggling to pay their bill to call us. We want to help you find workable solutions, so you don’t fall behind.”

The utility has a range of assistance programs for those who qualify. Some of these programs involve collaboration with other organizations. For more information, visit OPPD.com/EAP or call 402-536-4131.

The adjustments OPPD is proposing are consistent with other utilities’ rate increases. Among 10 peer utilities in the Midwest and elsewhere, the average increase is 7.6%. Even with the general rate and FPPA increases proposed for 2025, OPPD’s electricity rates remain among the most competitive in the region and nation.

Customers can view the detailed preliminary budget for 2024, including proposed rate increases and ask questions via OPPDCommunityConnect.com. Directors will vote on a finalized COP at their Dec. 19 meeting. 

Other action
In other action, directors:

• Approved the September 2024 financial report, October 2024 meeting minutes and Nov. 21, 2024, agenda.
• Received the monthly President’s Report, available to view at OPPD.com/BoardMeeting.
• Reviewed a board salary proposal that would go into effect in 2025 if approved.

Next board meetings

The next all-committees meeting will be Tuesday, Dec. 17 at 10 a.m., in person at Blue Cross Blue Shield, 1919 Aksarben Dr. in Omaha and virtually via Webex. The meeting link and instructions will be available at OPPD.com/CommitteeAgenda, beginning about 9:45 a.m.

The next monthly board meeting is Thursday, Dec. 19, 5 p.m., in person at the Legislative Chamber of the Omaha Civic Center, 1819 Farnam St. in Omaha, as well as virtually via Webex. Members of the public who wish to attend virtually will be able to access the meeting link and instructions at
OPPD.com/BoardAgenda, beginning at 4:45 p.m.