CEO Blog

Insights from February’s Cold Weather Event

Insights from February’s Cold Weather Event
March 8, 2021

The first days of spring-like temperatures are so gratifying. Free of layer after layer of outerwear, I step outside and welcome the sun’s warmth on my face. It’s literally a breath of fresh air! But it wasn’t long ago Nebraskans were asked to conserve their energy use, endure hour-long rolling outages and hunker down as sub-zero temperatures swept across the Midwest.

It was a first for NPPD – and for the Southwest Power Pool (SPP) – a 14-state regional transmission organization (RTO) of which we are a member. Never before in four decades had SPP asked its members to conduct rolling outages to minimize damage to our electric grid. Never before in the history of the SPP has a cold weather event of this magnitude occurred across its footprint.

There was no single cause, and as we look back in retrospect, I think we will find there is not a single fix either. Rather, a confluence of events created this unprecedented incident, from high energy use, interrupted natural gas supply and skyrocketing prices as demand for it increased, unanticipated outages to electric generating units due to frigid temperatures, and lower than anticipated wind forecasts. In the southern part of the SPP footprint, coal piles, wind turbines and natural gas wells sat frozen. Diesel fuel to run emergency generators was gelled. And so, SPP, alongside other RTOs impacted by the weather event like MISO and ERCOT, called upon its members to institute immediate load shedding to alleviate generation deficiencies throughout the region.

Public power, as it always does, answered the call to help protect the bulk electric system which serves the central portion of the country and is part of the larger Eastern Interconnect. The system requires real-time balancing of generation and load. In doing so, we also protected our customers from more detrimental, long-term blackouts. Yes, Nebraskans did experience short, rolling outages. I am troubled to say those in Texas under the energy authority ERCOT, a deregulated energy sector utilizing retail choice, were not as fortunate. As such, many Texans experienced days of power loss, frozen or burst pipes, and most heartbreakingly, death.

Countless questions must be answered in the aftermath of this event. They surround our industry’s response as a whole, as well as regional and national policy discussions concerning generation sources and the resiliency of our electrical infrastructure. It will take discussion – a lot of discussion. We need to ask the right questions. Identify effective solutions. And above all, we must strive to minimize the possibility of this occurring again, especially as climate trends point to more frequent and extreme weather events. Let ERCOT be the cautionary tale that propels the nation forward in hardening and winterizing infrastructure and power plants even in areas infrequently impacted by frigid weather events.

And, let this serve to remind us long after the dust settles that our membership in SPP and our public power approach were beneficial in powering through this event.

You’ve heard the phrase that no person is an island. NPPD isn’t either. Our membership within SPP grants us access to share costs on projects that improve the reliability of our grid and reduce congestion. It allows us to sell excess energy into the market and keep rates low for our customers. And, it provides us a security blanket when our own generation resources may be off-line due to unplanned or emergent outages or localized emergency events. While we had sufficient generation during this event, we have had instances where we’ve had to draw on the SPP to supply us much-needed generation to serve our customers.

NPPD’s diverse generation mix is a valuable resource for our customers and for SPP. All our plants were available to SPP and performed as beautifully during the emergency as our NPPD teammates who worked around the clock to manage the safety, health and financial risk for our customers. Our focus is not on profits or shareholders, but always on our customers. And this is a remarkable strength of public power. It’s also a reminder NPPD should not and cannot risk putting our eggs in one generation basket, and why baseload generation sources like coal and nuclear remain an important part of that mix.

Decarbonization of the energy industry is as inevitable as it is important. Yet, I believe emergency events like this reveal the need for a thoughtful approach to how NPPD, and the nation, generate electricity. That’s why NPPD has taken the slow and steady approach to evaluating its generation mix, while still actively exploring carbon-reducing technologies that could play a part in our future. The livelihood of our customers depends on it.

Some Texans are seeing catastrophic energy bills from February’s cold weather event due to their state’s deregulated energy market and possible rate structures. Though many could choose their power provider through retail choice, their rates were tied to market prices. When those prices hit the roof, end-user energy bills took a big hit.  

Fortunately for the majority of NPPD’s customers, our rates – some of the lowest in the nation – are set, so any increase in electric costs are based solely on an increase in energy use. In addition, the effective management of the rolling outages ensured there was not a significant change in electricity usage for our customers, and no spikes in electricity usage resulted that impacted SPP’s generation and load balancing.

It took everyone on our NPPD team to help us stay true to our mission this February. It took perseverance, hard work, and communication. And, while post-event assessments are just starting, I am proud of how Nebraska’s utilities responded to this event. We do have many opportunities for improvement, especially in the area of communications with our customers. We will be starting a joint effort with our customers in the upcoming weeks focused on improving communication. In the coming months, I look forward to better understanding the cause and effect nature of this event and applying lessons learned so NPPD can continue to provide customers with the top-notch service they deserve.  

Post-event educational communications are being shared on NPPD’s social media pages. Like our pages to stay abreast of the information. In addition, I encourage retail customers to take advantage of our “NPPD On The Go!” app to receive instant notifications of future high usage alerts, billing information, usage patterns and more.

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