NPPD official: Media release warning of a shortage untrue

COLUMBUS -- A national electric association’s media release warning of skyrocketing bills and rolling blackouts across Nebraska within the next few years prompted a correction from the Nebraska Public Power District.

During NPPD’s Board of Director’s meeting Friday, Ron Asche, CEO and president of NPPD, made the board aware of the media alert sent to newspapers in the state as a “teaser” to get publicity.

The release was issued by Ogilvy Public Relations on behalf of the National Rural Electric Cooperative Association and warned of a capacity shortage in Nebraska by 2011.

“At the current rate of consumption, citizens of Nebraska can see their electricity bills skyrocket and experience regular rolling blackouts by 2011,” the alert stated. It added although NPPD added wind development to its energy portfolio, “increasing wind generation and increasing efficiency will not be enough to meet Nebraska’s growing power needs. Starting in 2009, planned power generation for the upper Midwest will fall below recommended targets for ensuring reliable power.”

Asche said although this information may be true for some parts of the country, it is not representative of Nebraska.

“It is far from the truth (because) NPPD has more than sufficient energy generation” to sustain the state’s energy needs now and in the future, Asche said.

Beth Boesch, corporate communications and public relations manager for NPPD, said it has a diverse mix of generation resources to meet customers’ needs, including coal, nuclear, natural gas, diesel, hydro and wind, and growth and development is scheduled to meet the growing needs of its customers.

“In addition to our current generation resources, NPPD is a participant in Omaha Public Power District’s Nebraska City Unit 2 plant, which is scheduled for commercial operation in 2009. We recently executed power purchase agreements to purchase energy from two privately developed wind-generation facilities to be operational starting in 2009. (And) we will be purchasing excess power generated by ADM when its new co-generation facility comes online in the 2009-10 time frame,” Boesch said. “We will also recapture generation currently contracted to other utilities who are purchasing power from Cooper Nuclear Station and Gerald Gentleman Station when those contracts expire between now and 2014.”

“In summary, NPPD is in good shape to provide for the needs of our utility customers for years to come,” she said.

During the meeting Asche also discussed the potential for further utilization of nuclear energy in the future, but a “nuclear renaissance” could be on the horizon.

“There have not been any new nuclear plants in the past 25-30 years,” he said, but up to six new plants could be built across the nation by 2018.

The anticipated process to construct a new plant is two years to put together an application, up to four years for review of the application by the Nuclear Regulatory Commission (NRC) and up to six years for construction of the facility, Asche said.

One concern is the nuclear industry doesn’t have the experienced leadership in place, workers qualified to construct a nuclear plan may not be immediately available and the majority of workers, companies and materials in the industry are from foreign countries, Asche said, which creates an obstacle because the U.S. would have to “bring in new technologies and new people in to the country.

“Other countries are building new nuclear plants,” he said, so “without government backing and some guarantees it would be difficult to move (nuclear growth) on its own.”

Boesch said NPPD believes nuclear power is an important asset to Nebraskans and the U.S. as a whole, and NPPD is in the process of applying for a 20-year license renewal for Cooper Nuclear Station, but a new nuclear station within NPPD’s service area is unlikely due to the cost burden with such a proposal.

According to Boesch, the original construction cost of Cooper Nuclear Station, from June 1968-July 1974 was $313 million and its original rated capacity of 778 Megawatts translated into a cost of $400 per kilowatt. With the cost of transmission added, the “overnight” cost for a new nuclear plant was estimated at $3,400 per kilowatt, however, cost estimates continue to rise.

“NPPD has no current plans to build a new nuclear plant. However, this is an option we will investigate in partnership with other utilities,” she said. “Due to current sufficient generation capacity, long lead times to build new nuclear plants, escalating costs and regulatory concerns, it is difficult to predict whether a new nuclear plant will be built in Nebraska in the next 20 years.”

Larry Kuncl, board member, said strict regulations and change in political climate is hampering potential nuclear growth.

Darrell Nelson, board member, agreed, stating there is a lot of talk about a nuclear revival, but it is not going to happen.

“Going back 20 years or more, the relations between the NRC and nuclear utilities was burdensome,” Nelson said, but “in the last few years there a return to the old way of the NRC and their regulations have become erratic. Until people begin putting up tremendous amounts of money, gain trust that the regulations be reasonable and regular (and) there is a spirit of cooperation with the nuclear utilities” a nuclear resurgence will remain a dream, he said.