What keeps you awake at night? For me, it is the potential impact and costs related to Climate Change initiatives and other environmental regulations. Nearly every day, we read or hear new reports of power plant projects delayed due to environmental concerns, or what a particular business or industry is doing to “go green.” The enhanced public interest and involvement in our nation’s energy strategy has placed more political and regulatory pressure on the energy industry to produce cleaner and more efficient power than ever before.

Public concern over carbon dioxide emissions from coal-fired power plants and the legislative, regulatory and judicial actions to reduce these emissions are putting historically affordable and reliable coal-fired power plants at risk. Nuclear and renewable energy sources are being touted as clean alternatives to fossil-fuel plants. And with the technology for these energy resources steadily advancing, the pressure to do more with renewable resources mounts.

At NPPD, we started to more fully understand the impact of these pressures when putting together our most recent power resource plan for determining what kinds of generation resources might best serve our customers’ needs over the next 20 years. Thankfully, we are in good shape when it comes to generation capacity in the near-term. But with such long lead times for building baseload resources, it is important we start planning today to determine where we go from here.

One of the biggest uncertainties deals with the impact that potential environmental regulations will have on our business. We hear a lot about the impact that Climate Change legislation could have on coal-fired power plants and the need to reduce carbon dioxide emissions. While that is of serious concern, it is actually only one of several environmental issues that we face.

In February, NPPD submitted a report to the Nebraska Department of Environmental Quality providing details of how we might address an issue known as the Regional Haze Rule. The NDEQ will use this information in responding to a federal Environmental Protection Agency rule mandating reduction of haze-causing pollutants including fine particulates, sulfur dioxide and nitrogen oxides emitted from coal-fired power plants like Gerald Gentleman Station.

NPPD was required to complete an analysis to determine the impact of upgrading the plant with the Best Available Retrofit Technology (called BART) to reduce these emissions. The results of this study show the cost of making these improvements are estimated to range between $22 million to $1.5 billion, depending on the extent of reduction required and the technology deployed. The regulation requiring this large expenditure is to address the improvement of visibility, but it will do nothing to reduce carbon dioxide emissions. There is presently no technology available on a commercial-wide basis to capture and sequester (store) carbon dioxide, which could be another huge challenge.

It will most likely be a year or more until we know what the EPA will expect from us in regard to how we address Regional Haze regulatory requirements applicable to GGS. We continue monitoring the issue. We are committed to being prudent when it comes to investing in renewable resources such as wind-powered generation facilities which will further diversify our generation resource mix and provide a hedge against increasing fuel prices and environmental legislation that could impact our current generation resources.
In this premiere issue of Energy Insight, you can read about NPPD’s Integrated Resource Planning process and a Power Purchase Agreement signed recently with a private wind developer for a total of 80 megawatts of wind power. With this first-of-its-kind agreement in Nebraska, NPPD expects to use 40 megawatts of the output and sell the remaining 40 MWs to other Nebraska utilities. Obtaining this additional output will increase the amount of NPPD’s energy requirement supplied by non-hydro renewable resources from 1 percent to approximately 2.5 percent annually, and moves us a bit closer to meeting our recently revised strategic plan goal of generating 10 percent of our total energy requirements from renewable energy sources by 2020.

As we continue looking at ways of best serving our customers and keeping costs stable going forward, I am committed to discussing our future resource strategies and sharing information on other important industry issues. If you have a particular topic you would like us to discuss in this space, feel free to contact me.