The Central Nebraska Public Power and Irrigation District's
Incremental Pricing & Conservation Credit Program

PURPOSE

The Incremental Pricing & Conservation Credit Program (IP&CCP) is an innovative approach to pricing irrigation water delivery service developed by the Central Nebraska Water Conservation Task Force and refined by The Central Nebraska Public Power and Irrigation District.

Generally, Central has a minimum water service rate for a base volume water delivery of 1.5 acre-feet per acre per year (af/a/yr). Since an irrigator on Central's system pays the minimum charge, regardless of the amount of water delivered, there is no incentive for an irrigator to use less water per year than the base volume. In other words, there is no reward to the irrigator for efficient water use.

The purpose of the IP&CCP is to provide an incentive to Central's irrigation customers to conserve water by implementing on-farm water conservation practices and thereby reward irrigators for their improved water management.

DESCRIPTION

A. Incremental Pricing Program

Central's board of directors will set a minimum rate for a base volume of 1.5 af/a/yr. For participants who voluntarily sign up for the Program, the minimum charge for a base volume of 1.25 af/a/yr will be 83% of the 1.5-af rate. Water use between 1.25 and 1.5 af/a/yr will be charged at an incremental rate. If an irrigator uses less than 1.5 af/a/yr of water in an irrigation season, it will cost less than if he had remained with the original water service agreement.

Participants may receive the same amount of water as non-participants and will not be charged more for 1.5 af/a/yr than non-participants.

Water deliveries in excess of 1.5 af/a/yr will be charged the "extra water rate" that has been in effect for many years (150% of the base price for 1 af/a/yr).

B. Conservation Credit Program

The second part of the IP&CCP is the availability of "conservation credits" as an incentive to use less than the base volume of water. Earned conservation credits may be used by an irrigator to extend the minimum charge by the credited amount before incremental pricing takes effect. Conservation credits will be calculated as follows:

• If an irrigator uses more than the base volume of water per acre, no conservation credits are earned;

• If an irrigator uses less than the base volume of water per acre, the amount of credit earned is the difference between the base volume and the amount of water used, up to a maximum of .25 af/a. For example, if an irrigator uses 1 af/a from the base volume of 1.25 af/a, his conservation credit is .25 af/a;

• An irrigator may earn up to .25 af/a/yr in credits per irrigation season;

• An irrigator may accumulate a maximum of .75 af/a in his conservation credit account. Credits remain in his account until they are used.

Conservation credits may not be transferred from one irrigation account to another. If an irrigation account is divided, the conservation credits will be divided in the same proportion as the contract acres. Conservation credits will stay with the land if the irrigator's land changes ownership.

Sign-up

Irrigators may participate in the IP&CCP by signing an amendment to their water service agreements. The amendment must be signed by December 1 prior to the next irrigation season.

Cancellation or Modification

The irrigator or Central may cancel the IP&CCP for the ensuing irrigation season by providing the other party with written notice of such intent prior to December 1. Any conservation credits earned will be lost if the irrigator cancels; if Central ends the IP&CCP, any remaining conservation credits may be used, up to .25 af/a/yr, to reduce the minimum charge for the account that earned the credits.

Central may modify, amend or change the provisions, terms and conditions of the IP&CCP.