The Municipal Energy Agency of Nebraska (MEAN) Board of Directors at its quarterly board meeting in January approved no rate adjustment as part of its total revenue requirement for fiscal year 2023-24 for wholesale power supply participants.
The main components in MEAN’s rate structure for collecting revenue include MEAN’s energy rates for long-term (Schedule M) and shorter-term (Schedule K and K-1) participants and the fixed cost recovery charge. MEAN’s budget year runs April 1-March 31.
This marks six out of the last seven years MEAN has either lowered or had no rate increase to its energy rates and fixed cost recovery charge while also refunding credits totaling $22.2 million to Schedule M and Schedule K and K-1 participants.
MEAN’s energy rates, which also include its green energy charge rate, are used to collect revenue from energy sales to its wholesale power participants. This source of revenue makes up 64 percent of MEAN’s targeted revenue requirement. 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 36 percent of MEAN’s revenue requirement. 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 known fixed costs related to ownership of power resources, power contracts and operations. Accounting for certain known costs protects 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.
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.