FAQs

A declining block rate is a pricing structure where the per-unit price of the energy charge on the customer bill decreases as the customer's consumption increases. This means that customers who use more energy beyond a certain threshold pay a lower rate for each additional unit they consume. 

Energy management credits, or EMCs, offers a $2.07 bill credit for customer who used very little energy during the summer months (between 100 kWh and 400 kWh). It is a legacy credit that has not been updated in 20 years and does not reflect modern equitable ratemaking principles.  

OPPD eliminated declining block rates on most of its rates in the summer months (June-September) back in 2008. Declining blocks in the non-summer months (October-May) were considered for elimination in 2015 and 2021 but the decision was made at each point to retain them due to other rate priorities.

OPPD has considered this change for several years. Historically, market energy prices were most volatile during the summer months. As the mix of generation in the Southwest Power Pool has evolved, we now see large swings in energy prices on a year-round basis. In this new environment, the existing declining block rates do not send the right price signal to our customers. Now is the right time to update the rate structure to a single energy charge in the non-summer months. 

Some customers will see a bill increase and some will see a bill decrease. Overall, OPPD will not collect any additional revenue with this change. Most residential customers will experience very small changes with an average change (increase or decrease) of less than $15 per year ($1.25 per month). Only the 1,400 largest customers (out of 370,000) see a significant increase of over 5%. 

Those who use a high amount of electricity are more likely to see bill increases. For residential customers, a rule of thumb is that those with an average monthly bill below $125 during the October-May months will see a decrease, while those above that amount will see an increase. (note: for those customers with heat pumps on Rate 115 average bills below $165 will see a decrease and those above that amount will see an increase). 

The new single block rates will take effect October 1, 2025 for impacted residential customers and Jan. 1, 2026 for impacted commercial and industrial (C&I) customers. This additional lead time is being provided for these C&I to allow more time for companies with high-load factors and/or year-round high kWh to adjust budgets to prepare for the change.

Because the single rate for non-summer months will be higher than least expensive block, high users will experience a bill increase. For example, under the current DBR structure all energy usage on Rate 110 (Standard Residential Service) greater than 1,000 kWh is priced at 8.740 cents.  Under the single rate for non-summer months all usage will be priced at 8.921 cents. 

OPPD’s ratemaking principles are established by its Board of Directors under SD-2 (concerning rate setting and pricing practices) and the Rate Design Project. These principles remain unchanged. What evolves is the energy market, various regulations, and the meter technology we use to record customer data (more on this in the next question).  

One of our goals in designing rates is to send price signals that are consistent with the costs we incur to provide service. Declining blocks send the signal that it is cheaper for us to serve customers if they use more energy. In the current market environment, which is characterized by volatile and high energy prices year-round and new requirements related to how much surplus capacity we must have to serve customers, this is no longer the case. The most accurate price signals in today’s environment are based on when energy is used, not how much; we plan to implement time-varying rates once our smart meter rollout is complete in the years to come.  

Rate competitiveness is measured at the class level. Although some customers will see a bill increase with this change, OPPD will not collect any incremental revenue from any rate class. As a result, our competitive position remains unchanged.  

The potential for rate increases exists as OPPD is transforming to meet the energy needs of a growing community.  We are beginning our 2026 planning process but will not have specifics on any future rate increases for 2026 until the cost of service study is completed.