Summer electric rates are in effect for Fremont Department of Utilities customers, which means higher prices on electric bills as energy usage peaks throughout the summer months.
Many customers reported higher than anticipated bills this month, which is partly a product of increased usage due to higher than normal temperatures, but also because of the Department of Utilities’ longstanding summer rates plan.
Fremont Department of Utilities customers pay two different rates per kilowatt hour (kWh) throughout the year, with an increased rate in months June through September.
One reason why customers may be seeing higher than anticipated rates this summer could be due to an increase in rates that was approved by Fremont City Council in 2017, with rates increasing following November 2018.
In 2015, JK Energy Consulting, LLC, was hired to conduct a Cost of Service Study of the Department of Utility’s electric rates. A Cost of Service Study reviews revenues and expenses ensuring that electric rates are adequate to cover costs and pay for projected expenses.
In addition, the study also ensured that the customer charge for each rate class is paying its proportional share of expenses and that each rate is fair and non-discriminatory.
The 2015 study recommended that the City of Fremont implement 4-percent rate increases in November in years 2015-2018 and beyond to cover projected expenses, said John Krajewski of JK Energy Consulting during a council meeting in October 2017.
The driving factor for the increase was the addition of the $50 million scrubber installed in 2015 at the Lon D. Wright Power Plant; as well as the recently finished Elkhorn Valley Transmission Line built from the grid to Fremont by the Omaha Public Power District (OPPD).
The ordinance raised summer rates from 11.4 cents per kWh of electric usage and a $15 per month customer charge, to 11.85 cents per kWh of electric usage and a $16 per month customer charge. The ordinance also raised Winter Rates from 6.86 cents per kWh of electric usage and a $15 per month customer charge, to 7.14 cents per kWh of electric usage and a $16 per month customer charge.
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The increases also included: a $1 monthly increase for residential and suburban customers, $2 monthly increase for commercial service single-phase customers, $5 increase monthly for a three-phase customer, $5 monthly increase in the general power customer charge and $10 monthly increase for large power and large power contract customers.
According to City Administrator Brian Newton, the increased cost during summer months is used as a measure to cover increased costs incurred by the Department of Utilities.
“We have to run all the power plants, all the time, all summer long to handle hot weather energy peaks,” he said.
During summer months operational costs increase due to peak demand, which means the Lon D. Wright Power Plant has to increase output to meet the demand.
According to Newton, the plant also consumes more water, industrial chemicals, lubricants and other inputs due to the high output it must produce during the summer which creates high operational costs.
One avenue for Fremont Department of Utilities customers to curb increased costs in the summer is the department’s Budget Billing plan.
The Budget Billing plan provides customers the same billed cost each month based off of average utility use.
Unfortunately for customers feeling the pain of high electric bills currently, sign up for the Budget Billing plan is limited to the month of April, and customers must have lived at the service address for a calendar year (12 months).