English (United States)
This covers the expenses to build and maintain power lines, substations, and various equipment necessary to ensure power is available to you whenever you need it (keep you connected to the grid). It also includes the costs of creating and maintaining customer account information, billing, systems, and payment remittance. This charge is the same amount every month.
You will notice fluctuation in this line item from month to month, as it reflects your energy consumption. You will see the amount of kilowatt hours (kWh), for residential customers, delivered to your meter for each billing period. (Some commercial and industrial customers will see a line item for both kilowatt hours and kilowatt (kW) demand.) This charge covers the costs involved in generating power and delivering it to your meter; the price per kilowatt hour varies based on Winter (October 1 to May 31) and Summer (June 1 to September 30) seasons.
Lease Payment -- The Professional Retail Operations (PRO) Agreement allows NPPD to operate your community’s distribution system. NPPD is required to pay a percentage of the revenues collected from customers who purchase electric service from the system to the community as a Lease Payment. Lease Payments are calculated on the total sum of each customer’s bill, less any applicable Production Cost Adjustment (PCA), city sales tax, and state sales tax. Lease Payment amounts are specified in each community’s PRO Agreement and range from 12% to 14%.
Gross Revenue Tax -- Nebraska’s Constitution (Article VIII, Section 11) requires NPPD to pay a 5% GRT on revenue collected within the corporate limits of Nebraska municipalities. These payments are then submitted to the respective county treasurer for disbursement to the appropriate taxing entities per Nebraska Statute 70-651.03. Customers outside corporate limits will not see a GRT line item on their bills.
As stated above, the lease payment amount and gross revenue tax are based on the adjusted gross revenue received, and the specific percentage is determined by the communities. All communities are paid 12% to 14% LP, and a 5% GRT (for customers whose service location is located within the corporate limits of a municipality). Here is the calculation using our example bill:
Add the Customer Charge ($24.25) and the Energy and Delivery Charges ($113.96; our example bill was calculated using summer rates) for a total of $138.21. This amount is considered the Base Rate.
Base Rate (1 or 100%) – LP (12% or 0.12 per our example) and GRT (5% or 0.05)
- OR -
1 – 0.12 – 0.05 = 0.83
Divide the Base Rate by the LP and GRT percentages: $138.21 ÷ 0.83 = $166.52
*This calculation “grosses up” the billed service to an Adjusted Gross Revenue amount
Using our example LP of 12%, calculate 12% of the Adjusted Gross Revenue amount ($166.52): $166.52 x 0.12 = $19.98
To isolate GRT, calculate 5% of the Adjusted Gross Revenue amount ($166.52): $166.52 x 0.05 = $8.33
Base Rate (1 or 100%) – LP (12% or 0.12 per our example)
- OR -
1 – 0.12 = 0.88
Using our example LP of 12%, calculate 12% of the Adjusted Gross Revenue amount ($157.06): $157.06 x 0.12 = $18.85
The amount of state sales tax is calculated at a rate of 5.5% on the total Customer Charge, Energy and Delivery Charges, Lease Payment, and Gross Revenue Tax, if applicable ($24.25 + $113.96 + $19.98 + $8.33 = $166.52) $166.52 x 0.055 = $9.16.
The amount of city sales tax varies from 0% to 2% and is applicable only to those service locations located within the corporate limits of a municipality. Our example bill was calculated using a 1.5% city sales tax, and used the same subtotal as the Nebraska Sales Tax (Customer Charge, Energy and Delivery Charges, Lease Payment, and Gross Revenue Tax, if applicable: $24.25 + $113.96+ $19.98 + $8.33 = $166.52) $166.52 x 0.015 = $2.50.
