COLUMBUS – Nebraska Public Power District’s board of directors won’t be wasting any more time talking about wind energy.
They plan to make a decision next month on whether the electric utility needs to purchase more wind power or stick with the current renewable energy goal.
Board members called for an October vote on the issue during last week’s meeting, when they were presented with information on the potential economic impact of 18 proposed wind farm projects in Nebraska.
But, the decision on whether to buy electricity from any of these projects will come after multiple factors beyond job creation and property tax payments are considered.
Chairman Ron Larsen of Kearney said the board must also look at the district’s need for more electricity, a point CEO and President Pat Pope made during a similar discussion last month.
NPPD generated 16.45 million megawatt-hours of electricity last year, but needed only 13.17 million megawatt-hours to serve its in-state customers.
Pope has said he is “cautious” about adding more resources without knowing whether this electricity can be sold for a profit within Southwest Power Pool’s eight-state market. NPPD will begin using the regional transmission organization to buy and sell excess electricity next year.
Pope also has told the board the district doesn’t have the flexibility to shut down any of its current plants, such as the coal-powered Sheldon Station near Hallam, because backup generating resources are needed on days when the wind isn’t blowing and the plant may be needed if more regulations are mandated by the U.S. Environmental Protection Agency.
NPPD is nearing its goal of generating 10 percent of the electricity needed to serve in-state customers using renewable resources by 2020. Once wind farms in Jefferson and Custer counties go online the district will be about 45 megawatts short of the 357-megawatt goal.
“We’re very close to our goal and we’re not necessarily needing more at this time,” said Larsen.
The Nebraska Electric Generation and Transmission Cooperative Inc., which represents 21 public power districts and one cooperative served by NPPD, has also told the NPPD Board of Directors its members don’t support adding more wind energy at this time. That group is primarily concerned about additional costs that could be passed down to end users.
NPPD Director Ed Schrock of Elm Creek also brought up expenses during his comments last week, saying the country may be “overreacting” to climate change and clean-air issues.
“I don’t know how far we need to go,” Schrock said.
Others, such as Kim Morrow, disagreed.
Morrow, who was representing the Nebraska Wildlife Foundation and National Interfaith Power and Light, said many Nebraskans and the state senators who represent them support adding more wind energy.
She urged the board to beginning purchase more wind power now – while it’s at a low price – as part of a plan that gradually phases out older coal-powered plants.
NPPD has received unsolicited proposals from wind developers that include a purchase price of around $20 per megawatt-hour, which is comparable to what it costs NPPD to generate its own electricity at Sheldon Station.
Director Mary Harding of Denton said purchasing wind at this price can be used as a hedge against higher coal and natural gas prices in the future.
But, the board of directors must make a decision on whether to sign these agreements soon.
The federal production tax credit provided to wind developers is set to expire at the end of 2013 since Congress authorized just a one-year extension in January. It gives developers of large-scale wind farms an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production.
According to Director Fred Christensen of Lyons, losing this credit could more than double the cost of wind energy.
“The timing is critical,” he said of any board action regarding wind energy.
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