The Nebraska Public Power District Board of Directors unanimously approved the utility's 2016 wholesale rate schedule during a special meeting Wednesday in Grand Island.
The rate schedule includes a 3.8 percent overall average increase in 2016 wholesale rates.
NPPD said the increase will be used to fund transmission investments and $25 million in unfunded health care obligations for retired NPPD employees.
Wholesale customers who sign a new 20-year power contract will receive a rate discount of 3.57 percent, because NPPD can finance their portion of the uncollected retiree health care obligations over a longer time period, the Columbus-based utility said in a news release.
This results in an overall average rate increase for such customers of 0.6 percent, NPPD said.
NPPD’s Board heard from customers opposed to and in support of the proposal at a rate hearing Oct. 8 in Columbus.
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“Our customers’ feedback, not only at the rate hearing but over the past two years of contract negotiations, has played a critical role in the Board’s approval of these rate options,” NPPD Board Chairman Ed Schrock said.
Schrock said the utility believes the rate schedule is fair and nondiscriminatory "for all customers who have invested in a not-for-profit system, which has served a majority of them for more than 45 years.”
NPPD’s new wholesale power contract contains a financial performance standard motivating NPPD to operate competitively for its wholesale customers throughout the duration of the contract, and offers wholesale customers the ability to add up to 10 percent of local renewable energy.
NPPD’s wholesale customers who purchase electricity generated by NPPD and then distribute it to their local customers consist of 25 public power districts and electric cooperatives and 50 municipalities.
Board action on 2016 retail rates for nearly 90,000 customers who receive a bill from NPPD is expected in November. The district expects there will be no retail increase for a third year in a row.