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The greening of the OPPD board bodes for a more clean energy focused utility


The greening of the OPPD board bodes for a more clean energy focused utility

©by Leo Adam Biga

Appearing in the April 2019 edition of The Reader (www.thereader.com)

 

Polls show most Americans are now sold on climate change as real and requiring action. Thus, green’s no longer the new red bait.

Consistent with the public’s reset on greater environmental stewardship, the Omaha Public Power District’s board of directors has a new green majority after this last election cycle. Newly elected directors Eric Williams, Janece Mollhoff and Amanda Bogner have joined holdovers Rick Yoder and Craig Moody as ardent clean energy advocates. It’s not as if this potential voting bloc is so far apart from the other three directors, led by chair Anne McGuire. Indeed, there’s consensus to continue OPPD’s already impressive gains on the renewables front. Differences come down on how far, how fast the utility goes from here.

Regardless of where OPPD lands in its push toward renewables, it’s clear this billion dollar company reflects its customers micro energy concerns. Now that environmental engagement is cool, more folks are doing their part to reduce emissions by driving electric cars. More homes and businesses are going solar or using programmable timers to conserve usage,

Green-minded measures like these are one answer. But until entire communities and industries switch from fossil fuels reliance to clean energy sources pollutants and waste will leak out. The big frontier for sweeping impact is as close as the local electric utility. OPPD serves hundreds of thousands of customers in 13 counties with an energy profile mix that, while on an ever more renewable trajectory, is still largely dependent on coal-fired generating plants that release carbon.

“Utilities are clearly at the forefront of figuring out how we can have a reliable and affordable electricity energy system while mitigating and adapting to climate change,” Craig Moody said. “It’s difficult but probably the most important work I will do in my lifetime.”

 

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OPPD’s made clean energy a top priority through strategic directives set by its publicly elected board.

Moody, managing principal at sustainability consulting firm Verdis Group, feels he represents a broad cross-section of ratepayers in Subdistrict 5..

“Nobody wants pollution. But people also want a measured, deliberate, socially just transition to clean energy,” he said. “The reality in this state is that our economy is driven by agriculture, which can only happen with fertile soil, clean water and clean air.”

He sees rural constituents perhaps even more climate change-attuned than their urban counterparts.

“They get it. They see the risks. I mean, look at the flooding. It’s here now.”

Anne McGuire, representing Subdivision 2, has served on the board since 1996 and she said the utility’s made renewables a focus for 20 years. OPPD set its first hard renewable energy goal in 2010.

“Our goal was 10 percent renewable by 2020,” she said. “Everybody thought that was crazy. But we surpassed that last year at about 33 percent. At the end of 2019 we’re going to be about 40 percent renewable energy. It’s gotten less expensive to put up wind towers. They’re more efficient now, so it became far more viable and cost effective. We’ve always said we will adopt at the pace we can afford.”

“It’s gone much faster than most anyone really anticipated,” Moody said.

With carbon emission controls, LED street lights and a new community solar program,” Moody said, “we’re ahead of many other utilities when it comes to the pace at which we’ve continued to adopt renewables.” “I’m proud of how quickly it’s happened. Part of what we are trying to figure out as a utility is what’s next.”

 

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McGuire and Janece Mollhoff, who both have nursing backgrounds, echo health concerns over pollutants. Health and safety concerns extend to decommissioning the Fort Calhoun Station nuclear plant and the frequent flood threat posed to the Nebraska City Station.

McGuire feels the new board members will help move OPPD forward.

“They’re very engaged, very educated, very socially public-minded, and they know a lot about climate change,” she said. “So this will help us even more in bringing on more sustainable things.”

Moody sees things the board as a whole must address.

“Most electric utilities are seeing pretty flat if not declining growth as measured by demand from customers’ need for kilowatt hours. Ours is growing primarily due to data center activity in Papillion. So how we manage and meet that new demand while continuing to reduce carbon emissions is one of our bigger challenges in the coming years.”

He senses “alignment” by the board on the longterm vision for renewables. “The nuances are about pace and what that transition looks like from where we are today to what that vision is. We need to ensure a good amount of study and analysis goes into making decisions about how we will achieve that vision.”

Even seemingly small items like emissions measures – carbon intensity versus carbon ratio – are up for debate.

Agreeing on the particulars must happen within the board’s mandate of keeping energy affordable and reliable while maintaining environmental sensitivity. Easier said than done in a field dependent on both old and still developing new technologies and wide fluctuations in energy demands on the grid.

“It is a really difficult balancing act,” Moody said. “We often describe it as pulling levers. By focusing more on one issue, it’s going to create pressure on maintaining other aspects.”

Said McGuire, “You have to balance the scales. This is where we work on reaching compromises. It’s recognizing the fact you have to look at the entire company when you make changes.”

Balancing scales means tempering expectations.

Mollhoff (Subdivision 7) wants OPPD “to move away as quickly as possible from fossil fuels” but concedes that goal is subject to “fiscal responsibilities and making sure we’re not jeopardizing rates and our bottom-line.” She said the board must deliberately review and revise the 15 strategic directives previous boards put into place. “It’s too important we maintain stability to turn those all upside down and make it hard for staff and management to comply.”

Moody agrees, saying. “With an industry like this you don’t want to constantly be sending management new directions and be zig-zagging all over the place. That’s unhealthy, inefficient and not productive.”

Eric Williams (Subdivision 6), a natural resource planner at the Papio-Missouri River Natural Resources District, also believes due diligence serves the utility well.

“It’s not as if there could be an agenda item next month to vote on one hundred percent renewable energy. That is not how a utility operates, nor should it. There are a number of different times when different pieces will be up for public discussion. Those 15 strategic directives work together. All are very critical to the discussion about what is the total percentage of energy generated from renewable sources and how we’re going to continue increasing that.”

Williams views the board’s job as “working to understand this really complicated and complex set of parameters that guide how the utility operates, ways where we can make improvement and strategies we can use to work toward more clean energy. There’s a balancing between the different directives. For example, you could immediately jump to 100 percent clean energy, but that might be in conflict with cost effectiveness goals we currently have based on the price of technology available today.”

‘It’s easy to say we want to have a hundred percent clean energy and there are utilities – Mid-American and Xcel – who have said that. But if you ask them specifically how they’re going to get there I don’t think they have specific answers yet because transitioning to a hundred percent clean energy economy is a very long process. A lot of the technology we will need has not yet been developed.”

Amanda Bogner (Subdivision 1), an engineer by trade, knows this territory well.

“I would like to see OPPD’s renewable capacity increase to meet 100 percent of electric demand with renewables. This will become feasible as utility-scale energy storage becomes economically viable,” said Bogner, whose business Energy Studio makes buildings more energy efficient.

Bogner is concerned that two bills introduced in the Nebraska Legislature, LB 155 and LB 700, “will undermine our state’s potential to generate wind energy.” “Wind energy is a huge economic opportunity for our state. We need legislative action to encourage more wind energy development, not create roadblocks.”

While “wind and solar technologies are available in abundance in Nebraska,” Williams said, “they are intermittent, which is used as a criticism often of clean energy.” Williams regards such criticism as “a short-sighted view of how utilities function in general,” adding, “A utility is made of a number of generation assets all operating at different times, with different capacities, from different original energy sources and providing different benefits to the grid.”

Whatever the issue, the directives drive the change.

“In my view the most important job of our board is to get those strategic directives right,” Moody said. “Everything else the organization does flows into those strategic directives. Management is without question getting good guidance from those directives and often refers back to them as they think about what they’re doing.”

Anne McGuire describes the directives as “a living, breathing document we’ll alway revisit.” Added McGuire, “It’s important to have that broad policy because things are always changing. There’s going to be new technologies. These broad policies allow us as a company to be flexible when dealing with change.”

OPPD has an innovation team tasked with future solutions. Whether present or future-directed, Williams said “the board is responsible for understanding all of the different values of the district to provide affordable and reliable and environmentally sensitive energy and to make decisions guiding the district towards getting to those outcomes over time.” That means “understanding the technologies available.”

Williams said those technologies include clean energy generation at the utility-scale. It also mean distributed energy production, such as solar or wind, vent-metered at a house or business with excess sent back to the grid. There’s also energy storage with batteries, demand management programs and smart business maps.

“All of those work together to get a picture of the total generation and demand at the utility,” he said. “I am particularly interested in seeing us move toward more clean energy and more efficiency and becoming a part of and a leader in the new energy economy. But we do need to keep in mind we have come a long way and there are things that take awhile to transition.”

As more clean energy comes online, there’s bound to be displacement.

“We need to make sure as we transition we’re creating growth in other parts of the economy that fill the gap for skills and jobs lost in that transition,” said Janece Mollhoff. “I think it’s an important part of our work.”

Subdivision 4 director Rick Yoder  a Nebraska Business Development Center consultant, champions Nebraska taking more advantage of the new energy economy.

“This is a wonderful opportunity to distribute the benefits of business to landowners around rural areas of Nebraska,” Yoder said. “I represent seven of the 13 counties OPPD has from Sarpy County all the way to the Kansas line. There are plenty of acres there. We are losing out in terms of job growth, business impact by not being more aggressive in pursuing the clean energy economy. The opportunity is there to invest in energy efficiency, housing and the construction jobs that would make that happen.”

 

 

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Eric Williams advocates a big picture view as well.

“I think the board is generally in agreement that we should continue to develop clean resources in our state that have benefit to the locations where they’re constructed as well as the ratepayers in the utility.”

Mollhoff regards wind farms good investments, whether OPPD builds them or enters purchase power agreements with third parties, as long as it’s “wind sited in places that meet demand without having to invest too much more in infrastructure, transmission and distribution lines.” For example, she said, “bringing wind energy here from the Sandhills doesn’t make sense.”

The volatile nature of agriculture and climate, Yoder said, makes the case for urgency.

“We’ve seen prices go up and down and major floods. There’s land that does not always offer a strong income for the landowners. This is a great opportunity to diversify and to make our system more reliable and more resilient than it already is. OPPD and other utilities along the Missouri River should by now recognize the risk associated with recurring flood waters. A central hub and spoke system is not as resilient, reliable or risk-less as distributed energy generation.”

How OPPD’s adapting to the new energy economy depends on what lens you look through.

“If you use a Nebraska-only lens,” Yoder said, “I think OPPD is on the leading edge. It’s exciting the energy sector is transforming with the greatest wealth creation opportunity in my lifetime. The new technologies will enable us to extract resources rich to Nebraska that don’t run out – wind and solar. They have to be managed appropriately and we still have some technical issues we have to watch out for.

“But OPPD has certainly installed a ton of wind or partnered with companies installing wind here, I don’t just mean power purchase agreements with companies that install wind towers. There’s also the new Sarpy County resident (Facebook) building wind to offset the coal it purchases from OPPD. So wind expansion is happening because of OPPD above and beyond everybody else in the state, and that’s a good thing.

“OPPD is slower on solar, but I think now that it’s got its toe in the water it’s going to see the advantages there.”

Williams describes the community solar program coming online in April as “an opportunity for people to participate in local community clean energy even if they can’t install it directly on their home.”

Compared to nearby states and the country. Yoder believes Nebraska is “lagging” in new tech adoption.

“I think we’re losing economically because of it. Some people don’t use that as a measure. They use environmental measures. In either case, there’s a real urgency to make some change.”

Yoder calls for reducing “the amount of bureaucracy it takes to install solar for households and small businesses.” “The cost of when someone puts in solar is argued unfairly as a disadvantage to other users in the system. We’re working on what is the right rate for that user to pay to stay connected to the grid.”

Whatever the technology, Williams said, “we need to make sure we’re looking long-term while providing stability and certainty in the short-term.” He cautioned, “You want to be careful about saying something about a long-term vision without having fully understood the steps necessary to get there.”

Mollhoff describes a push-pull at work. “Management’s being pushed by entities like Facebook that want renewables,” she said, “and it’s important to recognize that management will respond to external forces probably as much as they’ll respond to the board. I want to make sure that whatever we do as a board we don’t tip that balance and put us on a path that isn’t sustainable or reliable. W

“e’re not trying to micromanage and yet we want them to move in a certain direction. It’s really the most we can do. We set rates and these strategic directives, but we don’t run the organization. We have to let management and staff do their jobs in a way that meets those strategic directives.”

 

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So how well poised is OPPD to make bigger strides in clean energy?

“That’s where we have the greatest need for discussion between board and management,” Yoder said. “They’re much closer to the actual changes and smarter about the time and resources needed to make the change than the board.”

Yoder said unless or until the board sets more specific clean energy directives, “we don’t have those policies pushing management right now.” He added, “That’s really where the board has an opportunity to more deeply engage and I think we all recognize that’s what we need to do. The change we’re talking about is seen as disruptive, but I think there is an organizational culture change happening.”

Underpinning any change, Yoder said, “we have to have the right data to make decisions.” He feels comprehensive data “hasn’t always been” available. “So we’re asking for larger time spans for the reporting and better measures of what’s being reported. That will allow us to make better policy decisions.”

Another area he’d like OPPD to explore is “shaping the load by working with customers to reduce when they choose to use electricity, so that demand that requires generation is spread out more evenly.” Doing that, he said, will take “a more modernized distribution system, which will require an investment.”

“The real tension for the board and management is where does the money come from, how do we do this, what is the return on investment if we choose to encourage more people to manage their load. Not everybody’s going to want to do that, so how do we find technologies that put in a default option for users.”

A more pro-active approach would be a start.

“As a utility we have not demonstrated an interest in helping people save their energy costs,” Yoder said. “The Austin, Texas electric utility raised its rate but worked with ratepayers to reduce the amount of energy they use, so monthly bills ended up the same. We could do that here if we chose to compete on efficiency rather than on price. When you compete on efficiency you compete on technologies, know-how, building practices. You’re no longer just a utility – you partner with the sectors of the economy for community betterment.”

Then there are meeting restrictions imposed by state Sunshine laws and differing agendas..

“We work the best we can through the meetings we set up,” Yoder said. “It is a struggle. But there’s a good amount of collegiality. I think we all have the same vision of where we’re going. The struggle we have is some of us are more focused on the outcome and others on the process to get there. Some understand it takes several steps to get to where we want to go and others, like     myself, want to see it happen now.

“It’s a tough tension.”

Moody cites the fluidity of new tech and impinging climate change as making everything move faster. “The utility industry historically has been pretty slow to change,” he said, “because it takes a lot of time, study, energy, resources, money to put in new transmission- distribution, to build new generating plants. That meant it went very slow. It’s not slow any longer.”

Something McGuire doesn’t want lost in all this is the “valued” work done by OPPD employees who operate the coal fired units that still energize the district. “They’re the ones that really keep the lights on 24/7 and we have to respect them and their important role in this,” she said “If we didn’t have that we wouldn’t have the reliable resilient energy we have right now.”

As the utility prepares for a greener future, McGuire said, “There’s discussion and compromise, but in the end we’re all after the same goal, and we all respect each other. This is not Congress.”

Moving forward, Moody said, “it will be a collaborative effort by those some describe as the green majority and the other members of the board and management.”

Read more of Leo Adam Biga’s work at leoadambiga.com.

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