Members of the Legislature’s Natural Resources Committee heard testimony Friday related to an interim study on LR125, which addresses energy delivery and public power in Nebraska. During the 2017 session, the committee indefinitely postponed two bills related to the topic: one to allow private electricity providers to operate in the state – known as retail choice – and another dealing with the unbundling of utility rate information.
Interim studies and their hearings are conducted as an opportunity to educate senators about an issue and potentially clarify an issue. A study can range from a letter to the committee to a formal report. At this time, there is no proposed legislation related to public power in Nebraska.
Several organizations were invited to give testimony on various topics related to energy delivery.
Representatives from Southwest Power Pool (SPP) explained how the regional transmission operation (RTO) was formed, how it manages the grid, operates the wholesale market and plays a role in transmission planning.
SPP manages the electricity being generated and dispatched within its 546,000-square mile territory much like an air traffic control tower manages airplanes coming in and out of an airport, said Mike Ross, senior vice president.
The RTO also operates a wholesale marketplace where generation members, such as OPPD, sell excess energy. Ross explained that SPP does not favor one type of generation over the other, with the market deciding the lowest cost energy to purchase.
Bruce Rew, vice president of operations at SPP explained the market to the committee, as well as the role the organization plays in transmission planning and reliability coordination.
Sen. Joni Albrecht (Dist. 17) asked how many SPP members were public power utilities. Ross said approximately one-third of the RTO’s members were public power utilities. The other two-thirds are comprised of electricity cooperatives and investor-owned, or private utilities.
Tim Burke, president and CEO of Omaha Public Power District testified on behalf of Nebraska Power Association as to how public power utilities work to advance economic development in the state, and how public power continue to provide low rates for their customers.
Burke gave several examples of development projects with which public power utilities were involved, including the recent announcement of a Facebook data center locating in Sarpy County.
For that project, OPPD worked to create a new rate structure that allowed Facebook to have greater access to renewable energy.
“The new rate solution gives customers flexibility in how they meet their energy goals,” Burke said. “It is a rate Paul Clements, energy manager for Facebook, called ‘innovative and forward-thinking,’ and a tool that will help continue economic development in the state.”
Following his testimony, Sen. Rick Kolowski (Dist. 31) asked Burke about cyber security in the utility industry, specifically how utilities guard against attacks from nefarious groups.
Burke explained that the industry has specific cyber security protections utilities must complete to be compliant with the North American Electric Reliability Corporation guidelines.
But utilities must always guard against the “what ifs,” he said.
“We feel comfortable with our cyber security systems, but we’re always looking for the next thing that might happen.”
Representatives from Americans for Electricity Choice focused on the lack of choice Nebraskans have in the electricity provider, a choice customers of OPPD and other public power utilities have not requested.
Michael Matheson testified for the group, and again brought up many of the points the group testified about during the February hearing: excess generation, inconsistence in choice between industrial and residential customers and alleged debt carried by public power utilities.
Following the invited testifiers, members of the public were given time to speak to the committee, only a few gave statements. Although the hearing room was at capacity, the majority of the audience was there to discuss a transmission line proposed by Nebraska Public Power District.
Those who did testify about public power cited the transparency and trust they had in those leading the utilities, specifically trust in decisions related to renewable energy.
“We support public power and oppose any effort to privatize,” said John Hansen, president of Nebraska Farmers Union. “Public power is not only unique, but if the system is picked apart it won’t function as it should.”
At this point, no action has been planned by the committee in response to Friday’s hearing.