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OPPD Board: Vote Against Rate Restructuring Proposal

This past Tuesday, a letter of opposition to the rate restructuring proposal was submitted to the Omaha Public Power District (OPPD) Board of Directors meeting. Along with thirty-plus other organizations and businesses, Voices for Children has put our support behind this letter. While appreciate that OPPD has explored modifications to the proposal to lessen the negative impact on families with low-incomes, we are still concerned that the plan does not represent an equitable deal for all.

Today, the OPPD Board is voting on the rate restructuring proposal. We urge them to vote against this plan that would disproportionately affect families with low-incomes, or table the vote in order to allow for more time to consider alternatives.

 

Want to take action? Sign Bold Nebraska’s online petition against the proposal here.

 

Included below is a copy of the opposition letter signed by Voices:

November 23, 2015

OPPD Board of Directors:

 

On behalf of the undersigned organizations, we are writing to express our formal opposition to the OPPD proposed “Rethinking Rates,” that will result in a 341% increase in mandatory fixed charges for residential customers1. High fixed charges have significant impacts on low-income customers, discriminate against low energy users, discourage energy efficiency, and are inconsistent with OPPD’s mission and vision. We urge the Board to reject this proposal. We call for a more open process with substantially more public input in determining fundamental changes to our rate structures.

OPPD is citing high fixed costs (infrastructure, equipment, and personnel) and lower energy usage by its customer-owners as the rationale for this new high fixed fee model. However, this fixed fee model does not reflect equitable assignment of costs within the residential customer class, does not encourage energy efficiency, or incorporate substantive customer-owner input, all Board Policy Strategic Directions. In addition, this rate restructuring will unfairly impact low-income and low energy consuming customers in a negative way. The OPPD bills for below-average energy users (often low-income users per the UNO Report: Nebraska Energy Burden2) will go up. In fact, the National Association of State Utility Consumer Advocates (NASUCA) “urges state public service commissions to reject gas and electric utility rate design proposals that seek to substantially increase the percentage of revenues recovered through flat, monthly customer charges on residential customer utility bills – proposals that disproportionately and inequitably increase the rates of low usage customers, a group that often includes low-income, fixed-income, elderly and minority customers, throughout the United States.”3 The board should follow their own competitive rates policy and “maintain fair, reasonable, and non-discriminatory rates” for all ratepayers.4

This rate change would also discourage OPPD customers from pursuing new conservation, energy efficiency, or renewable energy strategies by making these strategies less financially rewarding. This fundamental restructuring of rates similarly affects those who have already made energy saving investments or behavior changes. OPPD rates, per Board policy, should encourage energy efficiency.4 Ideally, fixed charges would apply only to customer-owner specific costs of connecting to the grid, while shared infrastructure costs and energy usage costs both aligns with customer-owner rate costs (i.e. the more you use, the more you pay).5

We are eager and willing to participate in an open dialogue about how to achieve a better balance between keeping rates low, fair and non-discriminatory, while ensuring the financial health of OPPD. Please reject OPPD’s Rethinking Rates proposal as you cast your vote as our elected customer-owner representatives and fellow public servants.

Footnotes:

1.     http://www.oppdlistens.com/

2.http://nebraskaenergyassistance.com/wp-content/uploads/2013/07/Nebraska-Energy-Burden-2013.pdf

3.http://globenewswire.com/news-release/2015/06/15/744693/10138522/en/Utility-Push-for-Steeper-Mandatory-Fees-on-Customers-Opposed-by-40-State-Assoc-of-Consumer-Protection-Officials.html

4.http://www.oppd.com/media/202456/oppd-board-policy-binder-version-10-15.pdf

5.http://www.utilitydive.com/news/the-future-of-rate-design-why-the-utility-industry-may-shift-away-from-fix/409504/

 

 

 

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