Electricity rate study favors staged increases

Increasing cost of electricity to City may result in rate hikes

SIDNEY -- Electricity customers may see increases in the near future.

The Sidney City Council passed designation of a proposal that would increase electricity rates for city customers. The resolution will return in the next city council meeting for a formal vote.

In his memo to the city council, City Manager David Scott said the Council had concerns about the rising costs of energy and declining net revenues in the electricity department. Staff were asked to seek a power consultant. JK Energy Consultants, contracted to conduct a rate study for the City of Sidney.

John Krajewski, representing JK Energy Consultants, presented the results of his study during Tuesday's council meeting.

"Probably the most important purpose in doing a rate study is to look at the financial performance of the utility, and make sure that performance will continue to be solid going forward, try to look at rate stability, develop rates that are fair, reasonable, nondiscriminatory. That's a legal requirement in Nebraska," Krajewski said.

He said rates will need to increase as high as 29 percent by 2030.His proposal is an 8 percent increase for 2026 and 2027, and a 4 percent increase for 2028 and 2029. He said rates need to be competitive and reflect the cost of service. 

"I do my projected financial results a little different than what your accountant, what your auditor would do. First of all, you'll note that I'm looking at fiscal year '25. That is not your budget, it is not your actuals. It's a hybrid of the two, and it incorporates full year changes, known changes that occurred on your electric system, and assumes that they occurred for the full year," Krajewski said.

He said the most significant change is MEAN (Municipal Energy Agency of Nebraska) raising their rate by 10 percent in April. He said he expects costs to increase because of inflation, salaries, materials and additional MEAN rate increases.