At its regular monthly meeting on June 19, the Overton Power District #5 (OPD5) Board of Trustees approved a rate adjustment for residential, small commercial and large commercial customers. The Board voted unanimously to give back a projected $544,350 annually to ratepayers.
Two years ago, OPD5 entered into new power purchase agreements. At the same time, they engaged the National Rural Utilities Cooperative Finance Corporation (CFC) to conduct a comprehensive rate study. The new rate adjustments are based on the findings of that study and careful evaluation by OPD5 staff. The result is a small overall rate reduction for most customers with some changes to the monthly base charge and per kWh rates.
OPD5 General Manager Mendis Cooper explained that the adjustment is designed to pass on recent district cost reductions to customers while balancing the need for the district to expand its infrastructure to meet community needs and to reduce exposure to day-long outages.
“It was important for us to pass some of our cost reductions back to customers,” Cooper said. “However, we didn’t want to do so much that we would lose our ability to make the planned system improvements that will ensure the reliability of our system. Those improvements are vital to the future of the district and the community.”
Residential customers will see a slight increase to the base charge of about $5 per month, but the cost per kilowatt hour (kWh) rate will be reduced by about 7 percent. Cooper explained during the meeting, “The average customer that uses 1,200 kWh should save around $15-20 per year on their (overall) power bills.”
Small commercial customers who use more than 1,000 kWh per month will see their monthly base charge increase from $21 per month to $40. The kWh charge will be reduced by about 20 percent so customers will see about a 9 percent net savings to their power bills. A new “rate class” is also proposed for small commercial businesses with low power usage, less than 1,000 kWh hours a month. These businesses would continue under the existing base and power usage rate.
Large commercial customers will also see an increase in the base charge and a decrease on the per kWh rate. The overall projected savings is estimated at 2 percent on their overall power bill.
The board members supported the rate adjustments and the staff’s efforts. OPD5 Board President Judy Metz said, “I think it is well thought out. I appreciate all the work that has gone into it both by our staff and with the assistance from CFC.” Metz then made a motion to approve the rate adjustments, which was approved unanimously. The new rates will take effect on Sep. 1.
Cooper said, “I hope our customers recognize that they haven’t seen a rate increase since 2012. Here we are seven years later, and we aren’t raising rates, we are adjusting them lower. At the same time, we are going to make improvements to our system to provide even better and more reliable service for our customers.”