Hastings Council approves new utility "dividend" fee framework, removes pilot line from rates

The Hastings City Council approved ordinances that create separate dividend fees for electric, gas and water and remove the current pilot payment from base utility rates, officials said at the Aug. 25 meeting.
The council passed ordinances for electric (Ordinance 48-10), gas (48-11) and water (48-12) in initial action; all three ordinances passed their first readings 8-0. Council later rejected a motion to suspend rules and adopt the electric ordinance on a single night (suspension failed 3-5); suspensions for two other related ordinances were approved on the same night.
City utilities staff said the change does not necessarily increase customer bills unless council later sets the dividend fee at a higher level. Derek, a city utilities staff member, told the council the move is intended to increase transparency—separating what the municipality historically collected through utility rates (a payment in lieu of taxes) into a visible fee the council can adjust independently.
Derek said the fee structure mirrors practice in other Nebraska cities and will allow the council greater flexibility to set the municipal share without reworking base utility rates during the annual rate-setting process. He said wholesale market sales (SPP market revenue) are handled separately and were not folded into the retail dividend structure.
Council members discussed timing and public outreach; several members asked staff to prepare clear customer notices explaining where the new fee comes from and how it relates to the prior pilot charge. Staff said they plan an informational insert to the first bill that contains the new fee and additional communications in the days after council action.
The council debate also touched on process: one councilor urged delaying final adoption to give the public more time to digest the change, while others pointed to the advantages of adopting the ordinances without delay. The electric ordinance’s immediate-adoption motion failed; the ordinances remain subject to the usual reading schedule or a later suspension vote.
Staff said the calculation method for credits associated with community solar and other existing customer arrangements will be adjusted each year to reflect market conditions, consistent with existing customer agreements.
The council took no separate vote to change customers’ net bills at the meeting; staff said customer bills will remain the same if council chooses dividend levels that mirror prior collections.