General

OPPD recommends substantial generation additions

It’s hard to convey how quickly energy demand in OPPD’s service territory is growing.

Imagine adding thousands of new homes, dozens of schools and numerous small and large businesses over the next few years that, combined, are nearly as large as the city of Lincoln.

For years, demand for electricity in OPPD’s service area stayed flat or grew slightly. Not anymore. With a surge in new homes, businesses and economic growth, the utility expects to add an unprecedented 100 megawatts annually over the next five or six years.

“This is an exciting time for us to be a growing utility, but it’s also a difficult one,” said OPPD President and CEO Javier Fernandez. “Putting together these puzzle pieces in a way that meets the needs of all of our stakeholders is not an easy task, but we have the best team to do this.”

To prepare for the rapid growth, OPPD needs to expand its generation portfolio, with a special focus on renewable energy to provide reliable, affordable power, with a smaller environmental impact.

OPPD’s plan calls for 1,000 to 1,500 megawatts of renewables (wind and solar); these totals include generation from Power with Purpose that has yet to be sourced. The plan also includes up to 125 megawatts of battery storage, 600 to 950 megawatts of thermal power (such as natural gas), at least 32 megawatts of demand response (shifting or shedding electricity demand to help balance the grid) and approximately 320 megawatts of added fuel capability and fuel oil storage at existing generation facilities – essentially, upgrading current facilities to allow for additional winter and resilient capacity.

The utility has presented the plan to OPPD’s Board of Directors, which will consider it at an upcoming meeting.

By 2030, OPPD is projected to nearly double its nameplate capacity.

Maintaining reliable service

To be clear: New homes, schools and small businesses will receive reliable, affordable service as soon as they’re built.

But extremely large customers with huge demand are challenging OPPD to plan generation needs further ahead. Some larger firms that will consume a lot of electricity will need to work earlier and more closely with the utility to prepare for future operations. OPPD leaders are working proactively to address the anticipated demand and keep the region flourishing.

“As long as we’re intentional about this and thinking long-term, we should be able to navigate these challenges pretty readily,” said Troy Via, OPPD’s COO and Vice President of Utility Operations. “We’ve managed many challenges over our history, and we’ll continue to do that as we move forward.”

Current projects that support this work include the new Standing Bear Lake Station and Turtle Creek Station natural gas facilities, plus the new Platteview facility, a utility-scale solar array to be energized beginning in 2024. Both projects are on schedule and working through the federal regulatory approval process.

OPPD is also piloting the new BRIGHT battery project to help store more electricity and the Sarpy Southwest Transmission Project, which will add high-voltage transmission lines to support the region’s power needs. The utility is also starting the process to route a 345-kilovolt transmission line that will run from OPPD’s Cass County Station to the new Turtle Creek Station.

Those are just a few of the many infrastructure projects underway to meet rising needs.

However, OPPD leaders said they need to plan even further ahead for the district’s fast-growing needs and to account for regulatory hurdles that might slow the development of more generation, plus global supply chain challenges. OPPD is now planning for anticipated growth through 2032.

Factors at play

Eastern Nebraska’s explosive load growth is coming primarily from industrial customers, but residential and commercial customers are a substantial contributor as well, said Ryan Stigge, OPPD’s program manager for decarbonization. As a public power utility, Stigge said, OPPD has a legal obligation to serve all customers in its district.

But local growth isn’t the only factor driving OPPD’s plans. The utility also needs more generation resources (capacity) to stay in compliance with the requirements of the Southwest Power Pool (SPP), a regional transmission organization that reports to the Federal Energy Regulatory Commission. The SPP stretches from Texas to North Dakota.

The Southwest Power Pool now requires its member utilities to maintain enough capacity to meet its net peak demand for electricity, plus an extra margin of 15%. That’s up from 12% previously, as utilities nationally work to enhance reliability amid the prospect of extreme weather.

“It’s important that we have the generation available to serve our territory, plus a planning reserve margin for when the unexpected happens,” Stigge said. “We want to make sure we’re ahead to maintain our tireless commitment to reliability.”

What’s driving load growth

Factors driving the load growth are wide-ranging and include customer movement toward more electrification, such as electric vehicles, and an expanding economy.

Thanks to a strong business climate, many companies are eager to move here, make huge investments in new facilities and provide high-paying jobs.

The list of businesses is big and diverse: manufacturers, biotech firms, data centers, medical facilities, warehouse distribution hubs, food processors and little mom-and-pop shops, among others. Right now, Nebraska has billions of dollars of projects in its pipeline.

Others that are here already want to expand. And as more people arrive, the need for electricity will continue to grow. Last year, the Omaha area alone drew 61 new projects totaling $2.1 billion in capital investment.

OPPD’s proposal calls for an estimated capital investment of $2 billion to $2.2 billion by 2030 to build everything that’s needed. Annual operating and maintenance costs would grow by approximately $310 million by 2030.

The new load, driven by the area’s growth, could generate an extra $450 million in annual retail revenue by 2030. Customer rates could increase an estimated 2.5% to 3% per year from 2027 to 2030 to pay for the projects and meet the surging demand for electricity, but those estimates could vary based on each project’s timing. Utilities nationwide are facing similar rate pressure as they wrestle with rising costs and growing demand for electricity.

Economic growth

Access to affordable, reliable power ranks among the biggest factors companies consider when looking to add new locations or expand existing ones. Thus, it’s a big driver of the economic growth that’s key to helping communities thrive.

OPPD’s blend of competitive rates, renewable energy generation and reliability has helped make the region an attractive place, said Brook Aken, Director of Economic Development and External Relations at OPPD.

Increasing the load demand across industries and sectors also helps keep rates low across OPPD’s customer base of residential, commercial and industrial customers. OPPD’s retail rates are 27.3% below the national average.

“We as a state have performed amazingly well in terms of economic development wins,” Aken said.