The Rest of the Story...NPPD's response to the Center for Rural Affairs' claims

If you have worked in Nebraska's public power industry, you know three things for sure:

reliable electricity helps run the state's economy and enhances our quality of life;

Nebraska's not-for-profit utilities are obligated to keep rates low; and

Mother Nature is often unpredictable.

She can bring ice storms, tornados and 100-degree drought, as we saw this past July. Air conditioners and irrigation pivots ran at levels never seen before, and NPPD's system set more than 40, new, anytime peaks between the end of June and mid-August. Unfortunately, the wind doesn't blow as much in Nebraska during the summertime; and there are times when it doesn't blow at all.

To ensure reliable service for the 600,000 Nebraskans needing electricity in July, NPPD relied heavily upon its coal-fired power plants to meet the load. Powered by low-sulfur, Wyoming coal, these units generate low-cost electricity and lots of it.

That's why, when we hear proposals that utilities should produce electricity using primarily wind generation, we pause. Wind can be an excellent fuel source for power generation, yet when you carry the responsibility for generating and delivering electricity to hundreds of thousands of Nebraskans, you want options.

NPPD believes a diverse generation mix serves customers best.

NPPD provides the total power supply for 52 municipal utilities and 25 public power districts and cooperatives in the state. NPPD also serves 80 municipalities at the retail service level. In total, more than 400 municipalities and more than half of the rural area in the state receive their power supply through NPPD.

The Center for Rural Affairs doubts NPPD's commitment to renewable generation. The organization claims we are "misleading" in how we calculated the cost of wind energy and communicated it with more than 500 people at 10 open house sessions held this spring to gather public input about our generation mix.

At these meetings, we compared two options for generating 1,365 megawatts of electricity, which is the amount of electricity produced by NPPD's largest generating plant, Gerald Gentleman Station.

The first option explained NPPD could continue to operate GGS and add $1.5 billion in environmental control equipment to ensure the facility meets future Environmental Protection Agency regulations. The investment would add to NPPD's current environmental compliance and capitalize on the multi-million dollar investment our customers have made in GGS since its construction.

The second option depicted how we could produce the same amount of energy with wind, instead of coal. NPPD's research indicates it would take 683, two-megawatt wind turbines and a new 1,365-MW, natural gas plant to replace GGS's output. Why both?

Unfortunately, wind energy only has an average energy production of up to 50 percent, so, when the wind isn't available, an equal amount of megawatts from a back-up resource--the natural gas plant--would be needed. NPPD's studies indicate the latter option would cost $4 billion. In short, the first option would cost customers less, deliver the same amount of power, and meet future environmental regulations.

The Center implies NPPD lacks commitment to wind energy. On the contrary, NPPD helped construct the first wind facility in Nebraska at Springview in 1998. In 2005, we constructed and continue to operate the state's largest, public-power owned, wind farm south of Ainsworth. We have a goal to generate 10 percent of customers' electricity with new, renewable energy (most likely wind) by 2020. To achieve this, NPPD negotiates power purchase agreements with private entities who can take advantage of federal production tax credits that subsidize the construction cost of building wind facilities. By the end of this year, NPPD will be involved in the development of six wind farms in the state.

As NPPD continues to collect customer input on our 20-year, integrated resource plan, we promise wind generation and energy efficiency will remain valuable resources in our mix. So will nuclear, natural gas, coal, and water -- and hopefully new alternatives like the compressed air energy storage facility NPPD is evaluating in Western Nebraska. In the end, we believe this diverse energy mix will ensure the reliability, diversity, sustainability and affordability our customers deserve.

PAT POPE

President and CEO

Nebraska Public

Power District