December 20, 2007
Due to many factors that Twin Valleys Public Power District does not have control over, the Board of Directors at the December board meeting has decided to raise rates for 2008, effective January 1.
2007 was a challenging year for Twin Valleys Public Power District. “The cost to repair the damage from the two ice storms in December of 2006 will be greater than our revenues for 2007. Even though we received help from FEMA, the cost to Twin Valleys Public Power District was significant”, according to General Manager Jim Dietz. “NPPD will increase their wholesale rates 12% in 2008, adding to the many factors influencing the Board’s decision” added Dietz.
Other factors affecting the rate increase include: increases in material costs, cost of fuel, health insurance, the cost of labor and a major construction project. Twin Valleys Public Power District has entered into a $1.5 million contract to replace a 55 year old 69KV line from NPPD’s substation near Orleans to Twin Valleys Public Power District’s substation northwest of Stamford. This 8.5 mile line and a one mile piece being replaced north of the Stamford substation will provide more reliable service all the way to Arapahoe. An increase in demand in Arapahoe due to the bio-diesel plant being built and the age of this line makes this project a necessity.
A cost of service study was prepared by a consultant and reviewed by the Board of Directors in November. The cost of service study determines the cost to serve each type of customer in Twin Valleys Public Power District, and there are many different types. The cost to serve an irrigation pump or a home may very well be different. The consultant designs the rates based on the cost to serve each type of customer. An overall rate increase of 6.5% was approved. The increase for each rate class will vary depending on the cost of service and your usage pattern.
The Board did elect to discontinue the PCA charge from NPPD effective on January 1, 2008. This charge was instituted by NPPD in April of this year to help offset increased power costs as the result of the ice storms. This charge added $0.001072 per kWh to your bill, but will not be included as part of the new rates.
As the result of legal rulings, Twin Valleys Public Power District will now have to charge sales tax to the “5% in lieu of tax” that applies in communities where we provide retail electric service. This 5% tax is paid to each county. The Nebraska Department of Revenue has said sales tax needs to be added and has been upheld in court.
With crude oil prices increasing 2½ times since 2000 and natural gas prices tripling from 2000-2003, electricity is still a bargain. Twin Valleys Public Power District is working hard at keeping its expenses in line while also increasing its revenues so rate increases can be kept to a minimum. Providing you, our valued customer, with a reliable source of energy at an affordable price will always be important to us.
