Nebraska Municipal Power Pool NMPP Municipal Energy Agency
Nebraska Municipal Power Pool (NMPP) Municipal Energy Agency of Nebraska (MEAN) City of Boulder, Colorado January 27, 2011 Kevin Gaden Director of Wholesale Electric Operations 1
NMPP Energy is a nonprofit, member-owned organization providing electricity, natural gas and utility related services to nearly 200 member communities across seven Midwestern and mountain states. NMPP Energy promotes the benefits of joint action and local utility control among its member communities. NMPP Energy consists of four entities: – Nebraska Municipal Power Pool (NMPP) Utility-related services – Municipal Energy Agency of Nebraska (MEAN) Wholesale electric supply – National Public Gas Agency (NPGA®) Wholesale natural gas supply – Public Alliance for Community Energy (ACE) Retail natural gas choice 2
MEAN l Formed in 1981 under provisions of the Municipal Cooperative Financing Act and is a political subdivision of the State of Nebraska l Provides wholesale power supply to public entities throughout the region via the Electrical Resources Pooling Agreement (ERPA) 3
MEAN’s Primary Mission l To provide long-term, reliable and economical power supply resources and utility-related services to MEAN member communities 4
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Advocacy l MEAN membership and active involvement in outside organizations American Public Power Association (APPA) Utility Wind Integration Group (UWIG) Western Area Power Administration (WAPA) Colorado Association of Municipal Utilities (CAMU) Solar Electric Power Association (SEPA) Western Electricity Coordinating Council (WECC) Transmission Access Power Study Group (TAPS) Western States Power Corp (WSPC) Rocky Mountain Generation Coop (RMGC) suspended Rocky Mountain Reserve Group (RMRG) Southwest Power Pool (SPP) Midwest Independent Transmission System Operator (MISO) State and federal legislation 6
= Member Generators = Baseload resources = Future resource (WEC 2) SOUTH DAKOTA . . . 7
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MEAN is a leader in Nebraska public power renewables. l l Built the first wind farm in Nebraska MEAN Wind Project at Kimball (Kimball, NE in 2002) MEAN owns, participates in, and purchases 43. 5 MW nameplate capacity Largest proportion of renewable energy (both in terms of system capacity and energy) among all Nebraska utilities There are currently no State or Federal mandates applicable to MEAN, however Aspen, CO (Service Schedule M Participant) was the winner of the 2008 Wind Power Pioneer Award, given annually by the US Department of Energy 9
Transmission l MEAN is transmission dependent Utilize 8 different transmission systems to serve member loads 1. 2. 3. 4. 5. 6. 7. 8. NPPD OPPD Tri-State G&T Western - Rocky Mountain Region Western - Salt Lake Xcel Energy – Colorado Black Hills Power & Light Mid. American Energy 10
Macro issues to consider in municipalizing an electric utility l Acquisition issues Costs (state regulated) Service area (state regulated) Finance Bond ratings ¾ Official statements ¾ Business plans Governance City council ¾ City council over Board of Utilities ¾ 12
Macro issues to consider in municipalizing an electric utility Autonomous Board of Utilities ¾ How is governing body selected ¾ – Elected vs. appointed l Power Supply There applications for all types of resources ¾ But there are limits Can’t store electricity ¾ Must produce and deliver simultaneously 13
Operational Issues l Power Supply Types of Resources Natural gas ¾ Coal ¾ Nuclear ¾ Renewables ¾ Hydro ¾ Demand Side Management ¾ Types of Power Suppliers Investor owned – PSCO ¾ Rural cooperative G & T – TSGT ¾ 14
Operational Issues Municipal Joint Action ¾ MEAN ¾ Platt River Independent Power Suppliers Calpine ¾ Southwest Generation ¾ Municipal Self Supply Colorado Springs ¾ Lincoln, NE Electric System ¾ 15
Operational Issues l Length of Supply Agreements l Short-term (1 -5 years) Medium-term (5 -20 years) Long-term (20 years or more) Each has pros and cons Distribution System (115 k. V & below) Ring Bus is like expressway System sectionalizing Improve reliability ¾ Reduce outage times ¾ 16
Operational Issues Distribution substations ¾ Distribution feeders ¾ Loading too high/too low Overhead vs. underground Service drops to customers Metering Smart metering ¾ Changing technologies ¾ 17
Operational Issues l Transmission Issues: (115 k. V & up) Who will transmission supplier be? Xcel ¾ TSGT ¾ WAPA ¾ Who will maintain equipment Specialized trade ¾ Specialized equipment ¾ 18
Other Operational Issues Staffing ¾ Where will they come from – Might need 200+ employees Utility management structure ¾ Utilities management experienced at what – – – Generation Transmission Distribution Business management All or some of the above Safety ¾ ¾ How will staff maintain safe system How will you comply with NERC standards – Growing issue ¾ Mutual aid – Who will help in a storm » Snow / wind / tornado / ice 19
Finance l How will utility cash flow? Bad debts / write-offs Payment lag timing Bond reserves Debt service coverage Bond ratings affect cost of debt Rating agency relationships Asset management 20
Finance l Office Operations Metering tied to billing system Implement new billing, business management system Service disconnect policies Customer service obligations ¾ Where does utility obligation for infrastructure end and then begin for customer – Consistent with Xcel? Office and maintenance shop locations ¾ ¾ ¾ Where How many Hours of operations 21
Summary of Issues l Operational Issues (safety and reliability) l Power Supply l Transmission l Acquisition Issues Long-term Operational Issues Business Management Issues Finance l l l 22
Summary of Discussion l l The power business is a very complex business. People depend on you 24/7 l Most take it for granted until it fails Business is getting more complex Customers Colorado PUC FERC NERC Financial community State laws on carbon 23
Who can help? l Initially l Consultants – CAMU Lawyers Other municipals Specialized contractors Acquisition team Finance experts Power suppliers Trade associations ¾ ¾ ¾ APPA CAMU NMPP Energy 24
l This is a very significant effort to undertake. l Some of your customers will not help. l Power suppliers can’t do it all. l Most supply is bid to meet RFP standards Others will quietly hurt your efforts. 25
Questions? Kevin Gaden kgaden@nmppenergy. org www. nmppenergy. org 26
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