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Under OPPD proposal, cleaner air could come quicker — but it may cost more

October 5, 2018

Local air could be cleaner quicker, and electricity could cost more when natural gas prices climb if the Omaha Public Power District adopts a proposed shift next week in its long-term approach to environmental stewardship.

Instead of aiming its long-term goal at generating a certain percentage of local electricity from renewable sources, as it has since 2015, OPPD is considering a policy that would reduce the amount of carbon released while producing each megawatt of electricity for ratepayers.

This might sound like a distinction without a difference. It’s not.

The new goal would probably accelerate OPPD’s shift away from dirtier coal to cleaner natural gas for its baseline load, or power that is always available.

Adopting the change also could increase the pace at which OPPD adopts wind and solar power projects with private providers, a step necessary in Nebraska because public utilities don’t qualify for federal tax incentives, said Craig Moody, a member of the OPPD board pushing for more aggressive environmental goals.

The proposed policy also offers OPPD a way to consider and calculate improvements in energy use and energy efficiency, boosting investments in efforts to conserve power.

The risk to ratepayers comes if the price of natural gas rises, said Tim Gay, a member of the OPPD board pushing for less aggressive environmental goals. Gas price spikes could force OPPD management to choose between the policy set for the environment and one set to keep rates affordable, he said.

The draft policy calls for a 20 percent reduction in “ carbon intensity ” levels from 2010 to 2030. A 1 percent annual cut in carbon intensity is a realistic, achievable goal for OPPD, said Dave Aiken, a professor in the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln who focuses much of his research on energy law and policy.

Aiken said the proposal would put OPPD in the energy mainstream nationally.

Choosing 2010 rather than 2017 as the baseline year for progress would require more carbon reductions, because OPPD in 2010 still operated Fort Calhoun Nuclear Station, a carbon-free source of energy that has since closed, the utility’s carbon statistics confirmed. The district’s carbon intensity in 2010 was 0.732 pounds per megawatt hour. The same figure in 2017 was 0.777.

Carbon intensity is calculated by dividing the carbon emitted in the generation of electricity by the total amount of electricity generated. Using this standard measurement would allow OPPD customers to compare OPPD’s environmental impact with other utilities that measure their impact similarly, said Mary Fisher, OPPD’s vice president of energy production.

It also would allow home and business owners to calculate their own carbon intensity and adjust it accordingly, said Russ Baker, director of OPPD’s environmental and regulatory affairs. OPPD has offered this service to large business and industrial clients since 2013.

The board set its current goal for renewable energy generation in 2015 at 30 percent. OPPD now expects to generate 40 percent of its power from renewables by late 2019. That’s when a private wind energy project in northeast Nebraska will come online.

OPPD is also building its first major solar panel installation near Fort Calhoun for its first community solar program.

Focusing OPPD’s next environmental guidepost, Strategic Directive 7, on carbon intensity rather than a percentage of renewable generation would give OPPD more options and flexibility to reduce its greenhouse gas emissions, Aiken said, including increased focus on energy efficiency.

The policy change could lead to cleaner air without increasing costs, outside energy experts say, because of that flexibility. And they “will be keeping track of what actually counts,” Aiken said.

The OPPD board is navigating an uncertain federal energy policy environment that has vacillated between President Barack Obama’s Clean Power Plan, which pushed coal toward the exits, and President Donald Trump’s Affordable Clean Energy program, which is trying to buttress coal, said F. John Hay, an extension educator at UNL who focuses on energy.

OPPD leaders seem to be challenging themselves with a goal and setting a specific date, he said. That allows them to pursue energy options that are the “lowest cost and environmentally friendly.”

Moody, Gay and board member Anne McGuire worked together on the new policy draft. OPPD is seeking public comment on it by Oct. 8, in advance of discussions planned for the board’s Oct. 11 meeting. If the public consensus suggests significant changes, the draft might be sent back to the committee for revision. If not, the board could vote on the directive next week.

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