The Municipal Energy Agency of Nebraska (MEAN) Board of Directors at its board meeting in January approved an overall 3 percent adjustment to MEAN’s rates and charges as part of its total revenue requirement for fiscal year 2026-27 for wholesale power supply participants.
The overall adjustment includes a 7 percent increase in MEAN’s energy rates and varying individual impacts in MEAN’s overall Fixed Cost Recovery Charge that is allocated to participants.
The MEAN Board, like local municipalities, annually reviews electric rates and charges to ensure operating revenues are sufficient to pay operating expenses and to maintain financial viability to serve its wholesale power supply participants in accordance with policies approved by the Board.
The approved rate adjustment allows MEAN to successfully meet its Board-approved financial targets to ensure MEAN remains in a healthy financial position.
The primary driver for the rate adjustment is increased and developing resource adequacy requirements in the Southwest Power Pool wholesale power markets to address regional grid reliability. These changing requirements create a need for MEAN and other utilities participating in regional wholesale power markets to procure additional resource capacity to meet the requirements.
Explanation of MEAN’s Rate Structure Components
The main components in MEAN’s rate structure for collecting revenue include MEAN’s energy charge rates for long-term (Schedule M Requirements Purchasers) and shorter-term (Schedule K and K-1) participants and the fixed cost recovery charge. MEAN’s budget year runs April 1-Mar 31. Below is a brief explanation of those rate structure components:
Energy Charge Rates
MEAN’s energy charge rates, which also include its green energy charge rate, are used to collect revenue from energy sales to the majority of its wholesale power participants. This source of revenue makes up 63 percent of MEAN’s budgeted electric energy sales revenue. Energy sales are highly variable as usage depends on consumer demand, which varies due to weather, time of day and conservation.
Fixed Cost Recovery Charge
The Fixed Cost Recovery Charge is 31 percent of MEAN’s budgeted electric energy sales revenue. This charge is allocated to participants based on each participant’s three-year historical average peak electric demand.
The Fixed Cost Recovery Charge allows MEAN to recover certain costs related to ownership of power resources, power contracts and MEAN operations. Accounting for certain budgeted costs helps protect MEAN’s wholesale electric participants from revenue volatility from energy sales caused by unpredictable factors such as weather-related usage fluctuations, unplanned resource outages and fuel costs.
Transmission and Federal Hydro Allocations
Two other primary cost components on MEAN participants’ monthly wholesale electric bill are for transmission and federal hydropower allocations, which are third-party pass-through costs. Local electric utilities must also consider these costs and potential cost changes when reviewing local rates.