kevin gaden of municipal energy agency of nebraska
DESCRIPTION
Kevin Gaden, Director of Wholesale Operations for the Municipal Energy Agency of Nebraska discusses issues involved in municipalization for a Boulder, CO audience. Following the expiration of a franchise agreement with Xcel Energy, Boulder is considering municipalization.TRANSCRIPT
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Nebraska Municipal Power Pool (NMPP)Municipal Energy Agency of Nebraska (MEAN)
City of Boulder, ColoradoJanuary 27, 2011
Kevin GadenDirector of Wholesale Electric
Operations
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NMPP Energy
NMPP Energy is a nonprofit, member-owned organization providing electricity, natural gas and utility related services to nearly 200 member communities across seven Midwestern and mountain states. NMPP Energy promotes the benefits of joint action and local utility control among its member communities. NMPP Energy consists of four entities:
‒ Nebraska Municipal Power Pool (NMPP)Utility-related services
‒ Municipal Energy Agency of Nebraska (MEAN)Wholesale electric supply
‒ National Public Gas Agency (NPGA®)Wholesale natural gas supply
‒ Public Alliance for Community Energy (ACE)Retail natural gas choice
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MEAN Formed in 1981 under provisions of the
Municipal Cooperative Financing Act and is a political subdivision of the State of Nebraska
Provides wholesale power supply to public entities throughout the region via the Electrical Resources Pooling Agreement (ERPA)
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MEAN’s Primary Mission To provide long-term, reliable and economical
power supply resources and utility-related services to MEAN member communities
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Advocacy
MEAN membership and active involvement in outside organizations American Public Power Association (APPA) Utility Wind Integration Group (UWIG) Western Area Power Administration (WAPA) Colorado Association of Municipal Utilities (CAMU) Solar Electric Power Association (SEPA) Western Electricity Coordinating Council (WECC) Transmission Access Power Study Group (TAPS) Western States Power Corp (WSPC) Rocky Mountain Generation Coop (RMGC) suspended Rocky Mountain Reserve Group (RMRG) Southwest Power Pool (SPP) Midwest Independent Transmission System Operator (MISO) State and federal legislation
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West Side
East Side
= Member Generators
= Baseload resources
= Future resource (WEC 2)
.
.
.
SOUTH DAKOTA
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BLANK SLIDE
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MEAN is a leader in Nebraska public power renewables.
Built the first wind farm in Nebraska MEAN Wind Project at Kimball (Kimball, NE in 2002)
MEAN owns, participates in, and purchases 43.5 MW nameplate capacity
Largest proportion of renewable energy (both in terms of system capacity and energy) among all Nebraska utilities
There are currently no State or Federal mandates applicable to MEAN, however Aspen, CO (Service Schedule M Participant) was the winner
of the 2008 Wind Power Pioneer Award, given annually by the US Department of Energy
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Transmission MEAN is transmission dependent
Utilize 8 different transmission systems to serve member loads
1. NPPD2. OPPD3. Tri-State G&T4. Western - Rocky Mountain Region5. Western - Salt Lake6. Xcel Energy – Colorado7. Black Hills Power & Light8. MidAmerican Energy
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Macro issues to consider in municipalizing an electric utility
Acquisition issues Costs (state regulated) Service area (state regulated) Finance
Bond ratings Official statements
Business plans Governance
City council City council over Board of Utilities
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Macro issues to consider in municipalizing an electric utility Autonomous Board of Utilities How is governing body selected‒ Elected vs. appointed
Power Supply There are applications for all types of resources
But there are limits Can’t store electricity
Must produce and deliver simultaneously
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Operational Issues
Power Supply Types of Resources
Natural gas Coal Nuclear Renewables Hydro Demand Side Management
Types of Power Suppliers Investor owned – PSCO Rural cooperative G & T – TSGT
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Operational Issues
Municipal Joint Action MEAN Platt River
Independent Power Suppliers Calpine Southwest Generation
Municipal Self Supply Colorado Springs Lincoln, NE Electric System
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Operational Issues
Length of Supply Agreements Short-term (1-5 years) Medium-term (5-20 years) Long-term (20 years or more) Each has pros and cons
Distribution System (115kV & below) Ring Bus is like expressway System sectionalizing
Improve reliability Reduce outage times
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Operational Issues
Distribution substations Loading too high/too low
Distribution feeders Overhead vs. underground
Service drops to customers Metering
Smart metering Changing technologies
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Operational Issues
Transmission Issues: (115 kV & up) Who will transmission supplier be?
Xcel TSGT WAPA
Who will maintain equipment Specialized trade Specialized equipment
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Other Operational Issues Staffing
Where will they come from‒ Might need 200+ employees
Utility management structure Utilities management experienced at what
‒ Generation‒ Transmission‒ Distribution‒ Business management‒ All or some of the above
Safety How will staff maintain safe system How will you comply with NERC standards
‒ Growing issue Mutual aid
‒ Who will help in a storm» Snow / wind / tornado / ice
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Finance
How will utility cash flow? Bad debts / write-offs Payment lag timing Bond reserves Debt service coverage Bond ratings affect cost of debt Rating agency relationships Asset management
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Finance
Office Operations Metering tied to billing system Implement new billing, business management system Service disconnect policies Customer service obligations
Where does utility obligation for infrastructure end and then begin for customer‒ Consistent with Xcel?
Office and maintenance shop locations Where How many Hours of operations
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Summary of Issues
Operational Issues (safety and reliability) Power Supply Transmission Acquisition Issues Long-term Operational Issues Business Management Issues Finance
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Summary of Discussion
The power business is a very complex business. People depend on you 24/7
Most take it for granted until it fails Business is getting more complex
Customers Colorado PUC FERC NERC Financial community State laws on carbon
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Who can help?
Initially Consultants – CAMU Lawyers Other municipals
Specialized contractors Acquisition team Finance experts Power suppliers Trade associations
APPA CAMU NMPP Energy
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This is a very significant effort to undertake. Some of your customers will not help. Power suppliers can’t do it all.
Most supply is bid to meet RFP standards Others will quietly hurt your efforts.
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