Nebraskans are lucky to have some of the lowest average electricity rates in the country, but this unfortunately may not be the case for much longer. Both the Omaha Public Power District (OPPD) and the Lincoln Electric System (LES) changed their residential electricity rates in 2025 and may institute another rate increase in 2026.
LES Rate Changes
On July 1, 2025, LES increased its electricity rates for all customers by 4%. While the plan hasn’t yet been approved, LES is proposing a further 3% rate increase across the board that would take effect on January 1, 2026. The initial rate hike amounted to an approximately $4 increase in the average homeowner’s monthly electric bill, and LES estimates that the proposed increase will add around another $3.22 per month for residential customers on average. However, the proposed changes could see some rate classes increase by around 10% while others may only see around a 0.8% increase.
The reason for the increase is that the Southwest Power Pool (SPP) adopted new power generation regulations, which require LES to increase its generation capacity. If it doesn’t sufficiently do so, it could face fines for not producing enough power and then be forced to further increase its rates. The SPP regulations were changed in response to blackouts and grid reliability concerns that arose as a result of major winter storms in recent years. LES is using the additional money from the rate increases to fund various projects that will increase its power generation capabilities and avoid potentially getting fined by the SPP for insufficient generation.
OPPD Rate Changes
OPPD initially increased its rate for residential customers by 8.4% in January 2025. This increase was made in response to issues like extreme weather, inflation, rising fuel costs and supply chain problems, all of which have resulted in OPPD needing to generate more income to keep up with current demands. OPPD is also using some of the money from the rate increase to modernize its infrastructure and increase its generation capabilities.
On October 1, 2025, OPPD made another change to its rates by eliminating declining block rates for residential customers. Declining block rates were instituted in many parts of the country in the 1950s and 60s as a way to incentivize customers toward home electrification, which means opting for electric appliances instead of natural gas. The way these rates work is that they charge customers with higher electricity usage lower prices per kilowatt-hour. The problem is that declining block rates put additional strain on the grid by encouraging customers to increase their electricity consumption, which has led to rates continually increasing. Declining block rates also primarily benefit larger, higher-income households that use more electricity and negatively impact lower-income households that have to pay higher rates as a result of using less electricity.
The elimination of declining block rates will affect OPPD customers differently depending on how much electricity they use. High-usage customers will likely see a rate increase of around 3% to 5%. However, around 66% of customers will actually see a rate decrease of around 1% to 3%.
OPPD currently isn’t proposing any rate changes for 2026 other than the declining block rate elimination. However, that could change due to unforeseen factors.
Effective Options for Reducing Electricity Consumption
If you’re a homeowner who is concerned about the recent rate increases, there are some ways that you can reduce your electricity consumption. One of the most effective ways is by replacing outdated, inefficient appliances like your refrigerator, stove/oven, washing machine, clothes dryer and, especially, a central AC unit.
Depending on the age, size and condition of your AC, you could reduce your electricity bills during the summer months by anywhere from 10% to over 50% by upgrading to a new AC or a heat pump. If you currently have an electric furnace or baseboard heating, switching to a heat pump will greatly reduce how much electricity you use to heat your house during winter as well.
Having your AC system serviced at the start of the summer makes a big difference in how efficiently it works and how much electricity it uses as well. Common issues like dirty evaporator and condenser coils can sometimes lead to a 20% to 30% reduction in efficiency.
Installing a smart thermostat is an easy, inexpensive way to reduce how much energy your AC system uses and also lower your heating bills. Most homeowners will see up to a 12% reduction in their annual cooling and heating costs compared to controlling their HVAC system with a standard programmable thermostat.
Hot water heating is also a major contributor to a household’s energy bills. If you have an electric tank water heater, insulating the tank will help to reduce heat loss and energy waste to keep your electricity bills lower. Upgrading to a tankless gas water heater or a heat pump water heater will help you save even more.
Another thing you may want to consider if your house is 25 or more years old is replacing your electrical panel. Older electrical panels don’t distribute power as efficiently as modern panels and often have issues that result in energy being wasted. By replacing an outdated panel, you can potentially lower your electricity bills by 10%-30%. Some homeowners insurance companies will also give you a discount on your rates for upgrading your electrical panel as a result of the new panel making your electrical system safer.
Switching to LED lighting and upgrading to more energy-efficient lighting options are also effective methods for reducing electricity consumption. In August 2023, the U.S. Department of Energy banned the sale of most types of incandescent lighting due to how inefficient incandescent light bulbs are. That means you now only have the choice between LEDs and compact fluorescent lights (CFLs) for most light fixtures. While CFLs are much more efficient than incandescent bulbs, they still don’t compare to the efficiency of LEDs.
Smart outlets, lights and light switches are a great investment that can further reduce your electricity bills. Most types of modern electronic devices, like TVs and stereo equipment, continually waste energy as a result of them only going into standby mode instead of completely shutting off. With a smart outlet, you can shut off the power to these devices at the push of a button instead of needing to unplug them. Smart lights and switches also help prevent energy waste by allowing you to dim the bulbs and shut off any lights you accidentally left on using your phone.
If you’re concerned about high energy costs, John Henry's Plumbing, Heating, Air, and Electrical has a range of solutions to help you save. We offer expert electrical services in Lincoln, Omaha, and other parts of Nebraska. From electrical panel replacement to lighting upgrades, you can trust our team to expertly handle your needs.
For more information on the ways we can help you lower your electricity bills or to schedule a service appointment, contact John Henry's Plumbing, Heating, Air, and Electrical today.
