The Omaha Public Power District says it is not planning a midyear rate hike, though continued delays in restarting Fort Calhoun Nuclear Station have required millions in additional spending.
This week, district officials told OPPD board members that they expect to spend $61.3 million more than they'd budgeted this year on work to get the plant back online. That spending, in addition to lower-than-expected revenues from sales of electricity, has the district looking to find about $11 million in reductions by year's end.
Still, the district says it is making steady progress at Fort Calhoun and remains on solid financial footing as it moves into the second half of the year. Vice president and chief financial officer Edward Easterlin said the budget cuts are a temporary fix to keep the budget on target, not a longer-term trend.
“As a percentage goes, $11 million is a lot of money, but it's a very small percentage of the total business of a billion-dollar budget,” Easterlin said.
The district's most recent budget estimates assume that the nuclear plant, located about 20 miles north of Omaha, will again be producing power by the end of September. OPPD has been gaining momentum on a long list of improvements required by the U.S. Nuclear Regulatory Commission, but inspections are continuing and the NRC has not given an indication that it's ready to OK a restart.
Fort Calhoun has been offline since April 2011. OPPD has announced several target restart dates that have come and gone. This year's budget was based on the plant restarting in February.
Easterlin noted that over a two-year period, the district remains on track with expected spending for the Fort Calhoun restart. Last year, officials estimated they'd spend $113 million on operations and maintenance at the plant but spent $69.8 million.
This year, however, costs have surged beyond expectations. The budget called for $30 million for restart operations, and OPPD expects to spend more than $70 million.
The district expects its capital spending on the nuclear plant will come in about $20.6 million over budget.
Plans for the $11 million in reductions are still in the works, but Easterlin said they will likely include leaving vacant positions unfilled, postponing some technology upgrades and holding off on some travel expenses. He said there are no plans to cut jobs or hours for current employees.
OPPD is beginning to put together its 2014 budget, which will go to the board in November. Easterlin said it's too soon to say how the Fort Calhoun delays could affect district spending or rates for customers. Rates have gone up every year since 2004, including a 6.9 percent general rate increase this year.
“I don't know what the future holds,” Easterlin said. “I would answer it this way: I think we've done a really good job of mitigating the current situation and I think we're going to carry those efforts into the future if required.”