LINCOLN — The Lincoln Electric System Administrative Board’s Finance Committee will propose a resolution to amend the 2025 LES Budget at the May 16 LES Administrative Board meeting. The resolution will also recommend a 4% rate increase to fund the additional generation.
LES’ regional transmission organization is the Southwest Power Pool, or SPP. SPP has developed new resource adequacy regulations that outline heightened generation requirements for utilities designed to help ensure system reliability. To avoid significant financial penalties under these new regulations, LES must have enough capacity to meet our peak load plus an additional reserve margin to ensure reliability.
To comply with the rules, LES has executed 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. LES recently added a total of 423 MW of wind capacity to our portfolio through an agreement with Google to help support Lincoln’s new Google data center.
“Evolving resource adequacy requirements aren’t unique to LES or to SPP,” said Scott Benson, manager, Resource & Transmission Planning. “The entire electric utility industry is learning to navigate these new challenges.”
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 addition of the hydro plant and the two natural gas combustion turbines are optimal choices,” said Emily Koenig, LES vice president of Financial Services & chief financial officer.
“We don’t take lightly the decision to propose this mid-year rate increase,” Koenig continued. “We understand that this comes at a time when there are other economic pressures facing customers. But given the importance our community places on reliability, and the need to act urgently to minimize additional cost risk from increasing demand for generation assets, we must move forward with this action as significant project costs will be incurred this year.”
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 hosted a public meeting on its resource adequacy May 8 at the Kevin Wailes Operations Center. Customers can view the meeting’s materials at LES.com/Budget.
The LES Administrative Board is planning to take action on the budget amendment and rate adjustment at its May 16 meeting. If approved, the proposed budget amendment and rates will be considered by the Lincoln City Council at a public hearing. If approved, rate changes will become effective July 1, 2025.
Payment assistance options can be found at LES.com/FinancialAssistance or by calling LES at 402.475.4211.