OPD5 Finance staff face challenges of 2025
This article was originally published in our January 2026 Watts Up E-newsletter. To read the full newsletter click here.
The OPD5 Finance Department covered some new territory in 2025, faced some significant challenges and came out in a stronger position; despite being a relatively junior group of staff.
“With all that our department worked on in 2025, it is important to note that there are only two people in the department who have been here for more than five years,” said Finance Department Manager Jonathan Denninghoff, who himself has been working at the district for two years. “So even though it was uncharted ground for most of us, our staff did a great job of staying on top of everything. Everyone just did what it took.”
The first challenge came at the very beginning of 2025 when Denninghoff’s team incorporated a new power purchase agreement into OPD5 accounting systems. Eight years ago, the previous agreement had locked in a relatively low price for the district. In the time since, energy prices had increased significantly in the market which made the prior agreement quite advantageous. But last January’s new agreement saw the cost of power effectively double for OPD5 to bring it in line with current market rates. This was something of a first that such a dramatic adjustment was needed to the cost of power.
“That first month when we paid our first bill to Tenaska, it was a bit of a sticker shock,” Denninghoff recalled. “All of a sudden, it became real that our double power costs were being realized right now.”
To help moderate this cost increase, the district had also entered a separate contract with a power provider who was constructing a solar power generation facility just north of Mesquite. This plant finally came online last June. Though there were still some technical growing pains to overcome with this new resource, it did bring clear and immediate financial benefits.
“From the financial perspective, the solar coming online in June was a huge help,” Denninghoff said. “Because that resource is so much less expensive than our market-based power, it is expected to save us about $4 million per year in power costs. That is a big deal!”
Another challenge faced was the relatively mild summer season of 2025. This caused lower than expected peak power demand which dipped revenues and margins below projections. Thus, it became necessary to make some mid-stream adjustments to the district’s capital budget plans.
“We went through our capital budget fairly closely and trimmed it up wherever we could,” Denninghoff said. “We actually postponed a number of projects to a later date because of our reduced revenues and cash flow.”
Despite all of these challenges, and perhaps because of them, OPD5 remains on strong financial footing. The district’s key financial measures are solid. The entity owns 70 percent of its assets outright, which is a high equity to assets ratio compared to the 48 percent ratio common among similarly-sized electric utilities nationwide. What’s more, the OPD5 modified debt service coverage ratio is well within established targets. This gives plenty of room to borrow and invest in the OPD5 system, Denninghoff said.
“I think it is important to note that, even though 2025 was an abnormal year for us financially, that hasn’t put us in a bad place,” Denninghoff said. “We are not running in the red or anything. We could continue maintaining our system and providing our service day-to-day indefinitely, just as we are. The challenge comes in building out the larger capital projects needed to supply greater reliability and future growth in our communities. For that, we have to make added long-term investment into our system; and we are on track with plans to do that.”
Denninghoff said that he was proud of his team in facing each of these challenges and more over the past year. “I think we are all guided by the fact that we are a not-for-profit entity, providing an essential service to our community,” he said. “Our goal is to provide that service at a reasonable cost. And I think that we accomplished that this year.”