The Nebraska Public Power District Board of Directors has approved a 3.75% average rate increase for both its wholesale and retail customers, effective January 1.

Wholesale customers are the rural public power districts and municipalities who purchase their power and distribute it to their electric customers while retail customers are those that receive an electric bill directly from NPPD.

While the average increase for all retail residential, commercial, and industrial classes is 3.75%, individual customer percent increases will vary depending on customer use. The residential customer using 1,000 kilowatt-hours per month will see an average increase of $5.50 on their monthly electric bill.

NPPD President and CEO Pat Pope says the utility has been discussing this rate adjustment amount with customers since early this year, and reduced it slightly from the 4% originally forecast. He says while the utility isn’t happy about having to take the increase, rates will continue to be competitive both regionally and nationally.

The wholesale rate increase will be applied to debt payments and capital expenditures for investments in plants and facilities. NPPD has invested approximately $1 billion in its system over the past 5 years. Pope says much of that is the result of increased compliance and security requirements, along with the cost to operate and maintain the reliability of its existing generation and transmission infrastructure.

The retail rate increase is due primarily to the continuing upward costs to generate and deliver energy. Pope says it’s a balancing act for the utility as it tries to keep rates affordable while ensuring reliable service for customers, pointing out that NPPD cut its cost-based budget $15 million dollars by cancelling or deferring projects, travel and training that did not jeopardize safety or reliability.