The Lincoln Electric System Administrative Board recently approved a resolution to amend the 2025 LES Budget and implement a 4% systemwide rate adjustment to fund additional generation for the utility.
LES’ regional transmission organization, the Southwest Power Pool, has developed new resource adequacy regulations that outline heightened generation requirements for utilities and are designed to help ensure system reliability.
To avoid significant financial penalties under these new regulations, LES must have enough capacity to meet its peak load plus an additional reserve margin.
To comply with the rules, LES completed a power purchase agreement with Central Nebraska Public Power & Irrigation District for the 22-megawatt Jeffrey Hydropower plant.
Additionally, LES plans to add two natural gas combustion turbines at Terry Bundy Generating Station, which will add 100 MW of capacity. The mid-year budget amendment will fund these resource additions.
“LES is always working to balance affordability, reliability and sustainability,” said Emily Koenig, LES vice president of Financial Services & chief financial officer. “The addition of the hydropower plant agreement and the natural gas combustion turbines is a prime example of this balance at play. We understand that a mid-year rate increase can be challenging for customers. An increase is needed to begin funding turbine expenditures, which were not included in this year’s budget. We must move quickly to procure the turbines to reduce the risk of increased costs for customers.”
LES said evolving resource adequacy requirements are impacting the electric utility industry at large.
Many other utilities are also moving forward with similar resource purchases, creating a higher demand for generation equipment.
A mid-year adjustment helps LES avoid longer lead times and increased prices.
“Fortunately, LES had the foresight to build the infrastructure needed for these additions when the Terry Bundy Generating Station was constructed in 2003,” the Nebraska public power utility noted.
The Lincoln City Council will now consider the proposed budget amendment and rate adjustment at a public hearing. If approved, rate changes will become effective July 1, 2025.
If the rate increase is adopted, an LES residential customer using 1,000 kilowatt-hours per month will see an increase of approximately $4.03 on their monthly bill. Other rate classes would see bill increases varying from 3% to 5% based on individual customer usage.
LES recently added a total of 423 MW of wind capacity to its portfolio through an agreement with Google to help support Lincoln’s new Google data center. This additional generation does not contribute to the need for the budget amendment.
