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NPPD, private developers team up to add more wind energy

The Nebraska Public Power District plans to add more than 400 megawatts of wind power – roughly equal to a mid-sized coal-fired plant – to its energy portfolio over the coming decade.

NPPD, the state’s largest electric utility, would not own the turbines but would work with private developers on a number of projects, said Dave Rich, the utility’s renewable energy development manager.

The investment in wind energy could exceed $1 billion, Rich said, and would take place over the next 12 years. Most construction costs would be covered by the private entities and NPPD would pay for the transmission lines, he said.

If completed, the projects would give a major boost to wind energy development in Nebraska, which has lagged behind surrounding states. Nebraska ranks sixth in the nation for wind energy potential.

NPPD wants to add the wind turbines as part of a long-term goal to generate 10 percent of its electricity from renewable energy resources, such as wind, solar, biomass and methane.

“Our goal has been 5 percent without a target date. Now it’s 10 percent by 2020,” Rich said. The NPPD board set a specific date earlier this year to show its commitment to renewable energy, he said.

Beth Boesch, spokeswoman for NPPD, said the utility is investing in wind energy resources as a “hedge” against increasing coal and other fuel costs. She said it’s also in anticipation of climate change regulations that may require utilities to increase their use of renewable energy.

A megawatt of wind energy serves the needs of 225 to 300 homes, according to the American Wind Energy Association.

NPPD expects to add 430 megawatts of wind energy to meet the board’s 10 percent goal.

“We can meet that with 80 megawatts of wind every other year,” Rich said.

NPPD already operates a 60-megawatt wind farm south of Ainsworth in north-central Nebraska. It also gets hydroelectricity from federal government projects and its own small plants.

The Columbus-based utility is involved in two other wind farm projects near Bloomfield in northeast Nebraska: the $140 million Elkhorn Ridge, scheduled to come on line this fall, and the $69 million Crofton Hills, to be completed next year. Both are Community Based Energy Development or C-BED projects being built by private companies. NPPD will buy the power under 20-year contracts.

Rich said NPPD is partnering with private companies because, unlike public power utilities, they can receive federal renewable energy tax credits, which pay roughly one-third of the cost.

Under a recently passed state law, private companies that develop C-BED projects do not have to pay state sales tax on equipment, such as turbines and substations.

Rich said NPPD is negotiating to sell half its interest in both projects to four electric utilities: Lincoln Electric System, Omaha Public Power District, City of Grand Island, and the Municipal Energy Agency of Nebraska.

LES spokesman Russ Reno said the city-owned utility is reviewing a power sales agreement to buy 6 megawatts of electricity from the Elkhorn Ridge project and will look at buying some from the Crofton Hills project.

Reno said LES, which operates two wind turbines north of Interstate 80, finds it advantageous to buy wind power because larger projects keep costs down and Elkhorn Ridge is in a higher wind area of the state. Also, NPPD has a transmission line that can deliver the power to LES.

“It’s the lowest cost renewable option that we have at this point,” Reno said.

No regulatory approval will be needed from the Nebraska Power Review Board for the additional NPPD wind energy projects, Rich said. That’s because the wind energy will be added in increments of 80 megawatts or less, he said, and therefore are exempt from the state regulatory process.

Rich declined to say where any future wind turbine projects would be built.

“At this point we can’t share where it is,” he added. “But there are benefits in physical dispersion.”

Algis J. Laukaitis

Lincoln Journal Star

22 July 2008