NPPD Annual Report 2009

2008financial report

Nebraska Public Power District2009 Annual Report

P.O. Box 499 | 1414 15th Street | Columbus, NE 68602-0499 | 1-800-282-6773www.nppd.com

Nebraska Public Power District is Nebraska’s largest electric generating utility with a chartered territory including all or parts of 91 of the state’s 93 counties. It was formed on January 1, 1970, through the merger of the former Consumers Public Power District and Platte Valley Public Power and Irrigation District. The merger also included the assets of the Nebraska Public Power System.

A public corporation and political subdivision of the state, NPPD is governed by an 11-member Board of Directors popularly elected from NPPD’s chartered territory.

The District’s revenue is primarily derived from wholesale power supply agreements with 52 towns and 25 public power districts and/or cooperatives that rely totally or partially on NPPD’s electrical system. NPPD also serves at retail 80 communities consisting of approximately 89,000 customers. More than 5,100 miles of transmission lines make up the NPPD high-voltage, electrical grid system.

NPPD uses a mix of generating facilities to meet the needs of its customers. NPPD also purchases electric energy from the Western Area Power Administration and from Omaha Public Power District’s Nebraska City Unit 2 Power Plant.

Working in partnership with Nebraska’s public power districts, cooperatives and municipalities, NPPD helps serve more than an estimated 1 million Nebraskans with retail or wholesale electric power and energy-related services.

C o r p o r a t e P r o f i l e

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Message from the President & CEO and Board Chairman

Balanced Generation2009 Big Stories

Reliable InfrastructureSatisfied Customers

Service Area MapsSenior Management Team

Board of DirectorsWe Light Up Lives

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Ta b l e o f C o n t e n t s

Cover photo: McCook Line Technician Kyle Kohtz
















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P r o g r e s s E x e c u t i v e S t a f f R e l i a b l e I n f r a s t r u c t u r e S a t i s f i e d C u s t o m e r s

A message from ...

Ronald D. Asche,

President & CEO

and Dennis L. Rasmussen,

Board Chairman (left)

A can-do spirit and an unyielding focus on customers enabled the Nebraska Public Power District to take many steps forward in 2009. Among those ingredients essential to progress is acquiring necessary generation resources to meet the energy needs of our customers. In 2008, NPPD entered into an agreement for power produced at the Elkhorn Ridge Wind Farm. The privately owned, 80-megawatt wind generation facility near Bloomfield began commercial operation in 2009. We also expanded our base load generation resources by beginning in 2009 to receive approximately 24 percent, or about 160 megawatts, of the energy generated at Omaha Public Power District’s new, coal-fired, Nebraska City Unit 2 power plant. These two facilities, when added to our existing generation resources, help ensure a stable supply of electricity for our customers.

Further enhancing the stability and diversity of NPPD’s generation mix, our colleagues at

Cooper Nuclear Station continued the station’s drive toward excellence. A successful refueling outage, good progress in the 20-year license extension process and extending (to 2029) our management support services agreement with Entergy Nuclear help assure Cooper’s place as a vital, non-carbon emitting component of NPPD’s generation resources.

After carefully evaluating various options on how to best serve customers in an evolving energy marketplace, NPPD joined the Southwest Power Pool in 2009. SPP is a regional transmission organization mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of electricity, adequate transmission infrastructure and competitive wholesale prices for power. Joining SPP is a significant change and being part of a broader, regional entity should provide additional benefits.

Another important step forward in 2009 was completing and energizing a new, 80-mile segment of high-voltage transmission line (345,000 volts) between Columbus and Lincoln. NPPD also began several transmission projects termed “Grid Essential.” These include new, 115,000-volt transmission lines to support pumping stations for a crude oil pipeline being built across Nebraska; expanding the 115,000-volt transmission system in South Sioux City to meet the rapid growth of demand for electric energy in the area; and a new, 345,000-volt

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Our Vision:Dedicated to enhancing the quality of

life for Nebraskans through our people and other public power assets.

Our Mission:Safely generate and deliver low-cost,

reliable energy and provide outstanding customer service.

P r o g r e s s E x e c u t i v e S t a f f R e l i a b l e I n f r a s t r u c t u r e S a t i s f i e d C u s t o m e r s

A message from ...

Ronald D. Asche,

President & CEO

and Dennis L. Rasmussen,

Board Chairman (left)

A can-do spirit and an unyielding focus on customers enabled the Nebraska Public Power District to take many steps forward in 2009. Among those ingredients essential to progress is acquiring necessary generation resources to meet the energy needs of our customers. In 2008, NPPD entered into an agreement for power produced at the Elkhorn Ridge Wind Farm. The privately owned, 80-megawatt wind generation facility near Bloomfield began commercial operation in 2009. We also expanded our base load generation resources by beginning in 2009 to receive approximately 24 percent, or about 160 megawatts, of the energy generated at Omaha Public Power District’s new, coal-fired, Nebraska City Unit 2 power plant. These two facilities, when added to our existing generation resources, help ensure a stable supply of electricity for our customers.

Further enhancing the stability and diversity of NPPD’s generation mix, our colleagues at

Cooper Nuclear Station continued the station’s drive toward excellence. A successful refueling outage, good progress in the 20-year license extension process and extending (to 2029) our management support services agreement with Entergy Nuclear help assure Cooper’s place as a vital, non-carbon emitting component of NPPD’s generation resources.

After carefully evaluating various options on how to best serve customers in an evolving energy marketplace, NPPD joined the Southwest Power Pool in 2009. SPP is a regional transmission organization mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of electricity, adequate transmission infrastructure and competitive wholesale prices for power. Joining SPP is a significant change and being part of a broader, regional entity should provide additional benefits.

Another important step forward in 2009 was completing and energizing a new, 80-mile segment of high-voltage transmission line (345,000 volts) between Columbus and Lincoln. NPPD also began several transmission projects termed “Grid Essential.” These include new, 115,000-volt transmission lines to support pumping stations for a crude oil pipeline being built across Nebraska; expanding the 115,000-volt transmission system in South Sioux City to meet the rapid growth of demand for electric energy in the area; and a new, 345,000-volt

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Our Vision:Dedicated to enhancing the quality of

life for Nebraskans through our people and other public power assets.

Our Mission:Safely generate and deliver low-cost,

reliable energy and provide outstanding customer service.

the non-firm, wholesale market were lower than budgeted. Our revenues were further challenged by a cool, wet summer that lowered the state’s overall demand for electric energy. However, at year’s end, energy use by our native load Nebraska customers had climbed back to 96 percent of budget. Also, we trimmed our revenue deficit by deferring some capital projects and implementing an array of savings and cost-cutting measures. As a result, we recorded an end-of-year shortfall of only $4.3 million (on a pro-forma rate basis), even though revenues from energy sales were $58.6 million under budget.

The year 2009 brought economic challenges and successes for NPPD and our customers. While not immune to hard times, NPPD remained steadfast to those components essential to progress, i.e., listening to our customers, making prudent investments in infrastructure, seeking new, renewable energy resources, and implementing new work processes and technologies to make us more efficient.

Ronald D. Asche President and CEO

Dennis L. RasmussenChairmanBoard of Directors

P r o g r e s s B a l a n c e d G e n e r a t i o n R e l i a b l e I n f r a s t r u c t u r e S a t i s f i e d C u s t o m e r s

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transmission line from Axtell to the Nebraska/Kansas border to ease regional transmission congestion and enhance the transmission system’s reliability.

With an eye to the future, NPPD implemented an EnergyWiseSM Pricing Pilot Program to evaluate the feasibility of residential and commercial time-based rates; began construction of a consolidated operations, maintenance and customer service facility in Norfolk; continued installing smart meters; and teamed with state government to develop a statewide radio system. We also explored potential, renewable energy resources in 2009, and we evaluated almost two dozen proposals for future wind projects.

By year’s end, the NPPD Board of Directors — adhering to its goal of generating 10 percent of NPPD’s energy from new, renewable resources by 2020 — had approved NPPD’s participation in an 80-megawatt wind facility at Petersburg and was considering proposals for an 80-megawatt wind farm at Broken Bow.

Internally, our most noteworthy success in 2009 was an outstanding safety record. We increased our efforts to reduce accidents and exceeded our corporate safety performance goals.

Financially, 2009 proved to be a challenging year for NPPD. Because of a weak national economy, prices for energy NPPD sold in

2 0 0 9 N P P D A n n u a l R e p o r t

O u r g o a l i s t o p r o v i d e 1 0 p e r c e n t o f o u r c u s t o m e r s ’ e n e r g y n e e d s f r o m n e w, r e n e w a b l e e n e r g y r e s o u r c e s b y 2 0 2 0 .


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Rick HolmesRenewable Energy TechnicianAinsworth Wind Energy Facility

A key component to NPPD’s ability to provide customers with safe, reliable electric energy is to achieve and maintain power generation diversity. Currently, NPPD’s generation mix includes coal, nuclear, natural gas, diesel, oil, hydro and wind. Utilizing our Integrated Resource Plan developed in 2008, NPPD continued its pursuit of maintaining an adequate and diversified electric supply for customers at the least possible cost. The IRP provides an analytical framework to support informed decision-making by NPPD’s Board of Directors on long-term power supply resources. It also serves as a communication vehicle to engage customers in NPPD’s resource planning process by providing information about the risks and uncertainties facing our industry and allowing them to participate in the planning process and influence its outcome.

The IRP identifies and evaluates several cost and risk factors, including native load growth, increasing cost and volatility of wholesale energy markets and fuel markets, and environmental regulation of carbon dioxide and other greenhouse gases.

Although there was market and regulatory uncertainty in 2009, NPPD took steps to assure adequate energy resources were available to meet customers’ needs. One such resource addition is a portion of the output from Omaha Public Power District’s new, coal-fired Nebraska City Unit 2 power plant. This investment, along with our expanded energy conservation programs, a reduced demand for energy and expiration of several participation sales agreements have helped NPPD defer the projected need to build more base load generation resources until the 2020s. NPPD’s power plants operated safely and reliably throughout the year, with nearly all of NPPD’s generating stations exceeding their annual

Nebraska CityUnit 2NPPD begins receiving a portion of the output from OPPD’s new, coal-fired power plant, Nebraska City Unit 2.

Gerald Gentleman StationGGS sets annual generation record exceeding 10 million megawatt-hours.

Cooper Nuclear StationCNS returns to Column 1 of the NRC’s Reactor Oversight Process Action Matrix.

Elkhorn Ridge Wind FarmElkhorn Ridge, near Bloomfield, begins commercial operation in March.


Diane Zerbe, left, customer contact specialist from Norfolk, and Wilma Werner, right, nuclear support at

Cooper Nuclear Station, helped bring this year’s refueling outage at CNS to a safe and successful conclusion.

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availability goals. Our power plants were ready to perform when our customers needed energy. Ongoing maintenance and upgrades help ensure that availability. For example, Sheldon Station completed a large-scale, station water treatment project and replaced the plant’s Unit 2 cooling tower.

Employees at Gerald Gentleman Station maintained the facility at a high level of availability, which enabled the station to set an annual generation record, producing 10,000,998 megawatt-hours. The previous record was set in 2008 at 9,830,574 megawatt-hours. Unit 2 at GGS set a record for 412 continuous days of generation, bettering the previous record of 239 days set by Unit 1 in 2001.

2 0 0 9 N P P D A n n u a l R e p o r t P r o g r e s s B a l a n c e d G e n e r a t i o n R e l i a b l e I n f r a s t r u c t u r e S a t i s f i e d C u s t o m e r s

Best of all, GGS colleagues accomplished these milestones in 2009 safely, with no days-away-from-work, personal injury incidents.

At Cooper Nuclear Station, employees and contract workers completed the plant’s 25th refueling and maintenance outage in 41 days. During the outage, major plant upgrades were performed, including replacement of four feedwater heaters, the main turbine digital control system and the main turbine lubricating oil filtration system.

Also, CNS returned to Column 1 (the best column) of the Nuclear Regulatory Commission’s Reactor Oversight Process Action Matrix during the third quarter of 2009, and progress was made on the construction of the plant’s on-site, dry cask, used fuel storage project. CNS personnel continued their ongoing work in support of the application, filed with the NRC in 2008, for the station’s operating license renewal until 2034, and colleagues continued to focus on safety and human performance while working to improve station reliability.

NPPD’s Ainsworth Wind Energy Facility and the privately owned Elkhorn Ridge Wind Facility (which began commercial operation in March) recorded end-of-year capacity factors of 36 and 28 percent, respectively, in 2009.

Wind turbines, like this one at NPPD’s Ainsworth Wind Energy Facility, generated carbon-free, renewable energy.

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NPPD sought to add renewable energy in the state by sending out requests for proposals for renewable energy projects and identified Petersburg and Broken Bow as potential sites for wind development. NPPD made progress

toward our goal of having new, renewable energy resources provide 10 percent of our customers’ energy needs by 2020.

Legislation promoting investment in wind generation in Nebraska was enacted by the legislature in 2009. One change streamlined approval of wind projects of more than 10


A mix of generation resources enhances NPPD’s electric system reliability and helps balance our environmental goals with the obligation to serve more than 1 million end-use customers in NPPD’s service area.

megawatts by providing an exception to the Nebraska Power Review Board’s traditional “least cost” standard, instituting a new standard allowing Nebraska utilities to gain Power Review Board approval of renewable energy

projects of up to 10 percent of the utility’s annual energy sales. We also participated with the Nebraska Legislature in a study of issues related to private expansion of wind generation in Nebraska for export to other states.

On the federal level, we are watching and evaluating possible changes in environmental

Gerald Gentleman StationCoal-fired power plant

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Beatrice Power StationNatural gas, combined-cycle power plant

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regulations which may impact the cost of energy for our customers. Some examples of these regulatory changes include modifications to the Clean Water Act regarding fish protection, and the possibility of a switch in the Environmental Protection Agency’s classification of fly ash to hazardous waste from its current status as solid waste.

To learn more about issues dealing with climate change and greenhouse gases, NPPD became a member of the Partnership for Carbon Dioxide Capture, investing in research being performed by the Energy and Environmental Research Center at the University of North Dakota. NPPD is also exploring new energy technologies such as compressed air and the use of biomass products as potential fuel sources. By participating in research of advanced electric


generating technologies, NPPD will be better prepared to understand and promote evolving energy solutions that will benefit our customers.

NPPD is monitoring other environmental issues, including potential changes in national air quality standards, climate change legislation and EPA regulations regarding greenhouse gases. NPPD will track these issues with a goal of minimizing risks and responding in a manner that best serves our customers’ long-term interests.

NPPD was a good steward of the environment in 2009. We performed our operations within parameters established by our regulating entities, and we participated in several environmental outreach programs across the state.

Two examples of these outreach programs were the Elkhorn H2O Daze in Norfolk and the Recycle Your Cycles event in Scottsbluff. We also participated in the annual Nebraska Rural Electric Energy Camp in Halsey and the Summer Orientation About Rivers program.

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After nearly a decade of drought, Nebraska’s rivers and lakes returned to more normal conditions in 2009. Lake McConaughy in western Nebraska ended the year with more than 1 million acre feet of water in storage — levels not seen since 2002. “Big Mac,” Nebraska’s largest reservoir and an important component in NPPD’s water system, supplemented cooling water to Gerald Gentleman Station, while supplying hydro power and irrigation.

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P r o g r e s s B a l a n c e d G e n e r a t i o n 2 0 0 9 B i g S t o r i e s S a t i s f i e d C u s t o m e r s

M a n y 2 0 0 9 e v e n t s a f f e c t e d

b o t h N P P D a n d o u r c u s t o m e r s . A m o n g b i g s t o r i e s w e r e a m i l d , r a i n y

s u m m e r ; e n e r g i z i n g t h e E l e c t r i c Tr a n s m i s s i o n R e l i a b i l i t y p r o j e c t ; j o i n i n g t h e S o u t h w e s t P o w e r P o o l ;

p a r t i c i p a t i n g i n O P P D ’ s N e b r a s k a C i t y U n i t 2 p o w e r p l a n t a n d i t s s t a r t u p o n M a y 1 ; a n d b e n e f i t t i n g f r o m c o m m e r c i a l

o p e r a t i o n o f t h e E l k h o r n R i d g e W i n d F a r m . E v e n m o r e e v e n t s t o a d d t o t h e y e a r ’ s m i l e s t o n e s i n c l u d e d b r e a k i n g

g r o u n d a t t h e n e w N o r f o l k O p e r a t i o n s C e n t e r ; r o l l i n g o u t t h e G r i d E s s e n t i a l t r a n s m i s s i o n p r o j e c t s ; c o n s t r u c t i o n o f a n e w c o o l i n g t o w e r a t S h e l d o n

S t a t i o n ; a n d a r e f u e l i n g a n d m a i n t e n a n c e o u t a g e a t C o o p e r N u c l e a r

S t a t i o n .

Thomas Henning, inset photo, is president of Cash-Wa Distribution, a broad-line food service distributor that serves all or parts of nine central U.S. states. In 2009, Cash-Wa expanded its capabilities by adding a 71,300 square foot frozen food warehouse and truck terminal to its Kearney facilities. NPPD employees assisted with the project’s design and energy efficiency options and performed a significant amount of work on the area’s electric distribution system to support the expansion.

Cash-Wa Distribution Co.

P r o g r e s s B a l a n c e d G e n e r a t i o n R e l i a b l e I n f r a s t r u c t u r e S a t i s f i e d C u s t o m e r s2 0 0 9 N P P D A n n u a l R e p o r t

I n f r a s t r u c t u r e i s t h e b a c k b o n e u p o n w h i c h e x c e l l e n t s e r v i c e i s b u i l t . P r u d e n t , l o n g - t e r m i n v e s t m e n t i n t h e ‘ n u t s a n d b o l t s ’ o f o u r i n d u s t r y e n h a n c e s s y s t e m r e l i a b i l i t y.

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Electric Transmission Reliability Project

Another element essential to NPPD’s progress is a strong and robust infrastructure. At NPPD, that refers to power plants, lines and associated electric system facilities. In 2009, NPPD’s electric delivery system operated reliably and efficiently, primarily because of investments in maintenance, delivery system upgrades and new system additions.

NPPD entered a new era in 2009 as we joined the Southwest Power Pool. SPP is a Regional Transmission Organization tasked by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale prices for electric energy. As a North American Electric Reliability Corporation regional entity, SPP oversees compliance enforcement and reliability standards development for its member utilities and market participants. In the six months leading up to the transition to SPP, NPPD colleagues completed thousands of activities needed to integrate NPPD’s reliability coordination, generation reserve sharing, transmission rates and tariff administration, energy market participation and transmission planning functions into SPP. NPPD’s participation in SPP is expected to have benefits including favorable wholesale market energy prices, low administrative costs and transmission revenue sharing with other SPP members. In addition, enhanced transmission coordination across SPP’s region should lower risk associated with transmission line loss and congestion, resulting in more efficient operation of the electric grid.

In response to a change in federal compliance regulations pertaining to reliability of the transmission grid, NPPD increased emphasis on

Southwest Power PoolSPP membership enhances NPPD’s operational flexibility.

Electric Transmission Reliability ProjectA new, 80-mile, 345,000-volt transmission line in eastern Nebraska enhances the transmission system’s ability to meet growing loads.

Statewide radio networkNPPD, the Nebraska State Patrol and other first responders team up for statewide radio coverage.


Bryce Stoltenberg, apprentice line technician at Scottsbluff, helped NPPD ensure the reliable delivery of

electric energy to our customers in 2009.

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General System Investments

compliance efforts in 2009. We formed and staffed a compliance department and created board and executive oversight committees, ensuring we are allotting the appropriate resources to this important part of our business.

In December 2009, NPPD energized a new 345,000-volt transmission line between Columbus and Lincoln. The $140 million (estimated) project, including associated substation construction and expansion, filled a

gap in the regional high-voltage transmission grid and strengthened the electric system. The new line, energized about six months ahead of its initial schedule, will help to ensure the continued reliable delivery of low-cost energy to NPPD’s customers.

Another notable transmission project completed in 2009 was NPPD’s Harbine to Steele City Project. This 18-mile, $8.4 million, 115,000-volt transmission line project and two, new substations were energized in October. The project will supply electric energy to Norris Public Power


District, the area’s retail electric supplier and NPPD wholesale customer, to meet power requirements of two, crude oil pumping stations near Steele City. The pumping stations are part of the TransCanada Keystone and Keystone XL crude oil pipelines.

During the year, NPPD began planning for a series of four transmission projects under the umbrella “Grid Essential.” These new projects include: 1) an expansion of the 115,000-volt transmission system in South

Sioux City; 2) a 115,000-volt transmission substation to support a planned wind energy project near Petersburg — and potentially a line to serve a second wind project under consideration near Broken Bow; 3) a 345,000-volt transmission line from a substation near Axtell to the Nebraska/Kansas border; and 4) three 115,000-volt transmission lines in central Nebraska to support pumping stations for a second crude oil pipeline project in the state.

The oil pipeline portion of the “Grid Essential” projects calls for new transmission lines to provide energy to three, NPPD wholesale


A robust infrastructure for the delivery of electricity is essential to meeting customers’ growing and changing needs.

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customers to serve three crude oil pumping stations at about 25 megawatts each. Throughout the year, NPPD enhanced the reliability of our electric system by approving approximately $23 million for multiple transmission and distribution refurbishments.NPPD substation and line construction crews completed expansion of a substation and related electric facilities to serve Nebraska’s largest ethanol plant, the Archer Daniels Midland Co.’s new dry-grind facility and cogeneration plant. Also, a new, 115,000-volt substation was built near Stanton, and two, new, subtransmission projects were completed in O’Neill and Norfolk. NPPD installed two-way, automatic communication system meters in several Nebraska communities served at retail by NPPD. In a move to strengthen the state’s emergency response capabilities, NPPD teamed with state government to conceive and begin building a statewide radio network. By working together, it is estimated the shared costs will save the citizens of Nebraska approximately $20 million. The new

Nebraska Governor Dave Heineman attended the rollout of a new, statewide radio network. The collaboration between state government and NPPD will provide interoperable communication among an array of Nebraska first responders including the Nebraska State Patrol and others.

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radio system to be used by NPPD and others, including the Nebraska State Patrol and the Nebraska Emergency Management Agency, is expected to become fully operational by the end of 2010.

These are but a few of the many examples of NPPD colleagues working hard to create and maintain essential infrastructure that ensures

the reliable delivery of electric energy to our customers every day. As we prepare for 2010, through planning, prudent investment and a workforce committed to customer service, we continue to proudly live up to our motto: “Always there when you need us.”


T h e s p a r k o f u n d e r s t a n d i n g i n a c h i l d ’ s e y e s , a s h e o r s h e g r a s p s a n i d e a , i l l u m i n a t e s o u r f u t u r e .

S a t i s f i e d C u s t o m e r s S e r v i c e A r e a M a p s S e n i o r M g t . Te a m & B o a r d o f D i r e c t o r s

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Columbus Middle School

Communication, open and often, helps NPPD develop solid relationships with customers. Understanding this, we met frequently with wholesale and retail customers throughout the year to discuss topics of interest, such as future generation strategies, rates, transmission projects, and environmental and regulatory issues. Just as it is every year, keeping customers’ costs low was a key goal in 2009, especially in light of the overall weak economy. However, due to necessary capital additions and improvements, the NPPD Board of Directors approved an electric rate increase, effective January 2010. Retail customers were to see an average rate increase of 5.7 percent, while the increase for wholesale customers was an average 5.9 percent.

The increase in rates helped to finance construction of the new, approximately $140 million, 80-mile, high-voltage transmission line between Columbus and Lincoln and an investment of $198 million as our shared cost of Omaha Public Power District’s Nebraska City Unit 2 power plant.

Another factor adding to the need to increase electric rates was a soft wholesale market into which NPPD typically sells excess generated energy. While we did manage — in the off-system wholesale energy market — to sell close to the number of megawatt-hours planned in our budget, prices were weak, and sales trailed revenue expectations by almost 50 percent.

In addition, NPPD’s in-state customer energy use slipped slightly because of the recession’s impact on the regional economy and reduced ethanol production. Also, a mild summer lowered energy sales for air conditioning and irrigation pumping.

To keep rate increases as low as possible, NPPD made reductions in planned material and supply purchases, use of contractor services and other programs in 2009, and we

EnergyWiseSM

(Year two)Investment in energy efficiency and conservation tops $2.2 million.

Planning for the futureNPPD extends support for Nebraska Center for Energy Sciences Research an additional five years.

Educational OutreachCollaboration with institutions of higher education creates new energy curriculum and Energy Sciences minor degree at UNL.

Pricing PilotResidential and commercial customers sign up for phase 1 of the EnergyWiseSM pricing pilot project focused on time-of-use rates.


Power Drive, a program where high school and college students design, build and drive electric cars,

continued to be very popular in 2009. Rallies were held at sites across Nebraska.

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cut our 2010 day-to-day operating budget by about $32 million. Other 2010 cost control actions were employed, including a freeze on executive salaries and a deferral of employee salary and benefit increases. An additional $60 million in deferrals was made to the 2010 capital budget.

NPPD promoted energy efficiency and conservation with the second year of our EnergyWiseSM Energy Efficiency Program.

Our investment in energy efficiency initiatives topped $2.2 million for the year, leading us to project a savings of more than


Vireo Resources, a manufacturer that processes and packages human nutritional and animal health care products, moved to Plattsmouth in 2009. At left, Seth LeGrand, site manager.


As a public power utility, NPPD’s progress can be best measured by how well we serve.

200,000 megawatt-hours over the life of the improvements and shaving almost 4,500 kilowatts of peak demand. Specifically, the Refrigerator Recycling Program resulted in the collection of 1,817 units in 2009, while a total of 232 low-interest loans for energy improvements were issued at an investment of $500,000. In 2009, NPPD provided research grant funding for 11, new, energy science research

projects through the Nebraska Center for Energy Sciences Research which is a partnership with the University of Nebraska-Lincoln. Based on the early successes of the Center in the areas of energy efficient technologies, renewable fuels and the development of value-added co-products from the biofuels industry, NPPD agreed to extend our research collaboration with UNL to 2016. This commitment of $5 million over an additional five years will continue funding research that produces new technologies, processes or systems, which, in turn, provide new or significantly enhanced energy sources and improve the quality of life and economic opportunity for Nebraskans.

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NPPD’s energy research efforts also included funding eight, new, Internal Domestic Energy Research and Application Initiative Projects. Focus areas of the research and demonstration projects included clean coal technologies, wind monitoring and wind turbine control technology, a solar photovoltaic demonstration facility at NPPD’s new Norfolk Operations Center, a compressed air energy storage study, and the EnergyWiseSM Pricing Pilot Program.

Helping Nebraska communities position themselves and their regions for economic growth, assisting in the expansion and retention of existing industry, and working to attract new businesses to our service area support NPPD’s vision. Our professional economic development consultants collaborate with Nebraska’s communities and state and national partners to grow the state’s economy. These efforts in 2009 resulted in 568 direct jobs, 376 indirect jobs, and $44.8 million of direct investment in NPPD’s service area. For the second year in a row, NPPD was recognized by Site Selection Magazine as one of the nation’s top utility economic development programs. NPPD’s service area fared much better than the national economy, with unemployment rates and job losses well below the national average. The area’s strong showing was due primarily to relatively strong performances by corn and soybean producers and by the region’s financial services sector. In 2010, NPPD’s economic development efforts will continue to emphasize recruitment of wind industry and other renewable energy-related firms, as well as the retention and expansion of existing business within NPPD’s service area.

Always seeking ways to best serve our customers, NPPD launched an 11-month Retail EnergyWiseSM Pricing Pilot Program. In the fall of the year, residential and commercial customers in three retail communities signed up for the first phase of the pilot which included a trial using time-of-use rates. With TOU rates, customers pay a higher rate for energy during heavy usage times of the day (i.e., on-peak) and a lower rate when demand for energy on the grid is less (i.e., off-peak). A second phase of this pilot will be offering critical peak pricing in the


Ground was broken in May 2009 for NPPD’s Norfolk Operations Center. The LEED Certified Gold facility will house operations, maintenance, material storage and customer service in one location, enhancing efficiency.

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summer of 2010. At the end of the program, results will be analyzed to see if expansion of this program is warranted.

Education is a cornerstone of progress, and educational programs played an important role in 2009. NPPD expanded its outreach to Nebraska teachers and helped create a summer, energy-related course and workshop at the University of Nebraska-Kearney. We also contributed to the creation of a new energy sciences minor degree at UNL through the University’s Nebraska Center for Energy Sciences Research program.

Furthermore, NPPD collaborated with Northeast Community College-Norfolk and Southeast Community College-Milford to offer students new programs of study related to renewable energy, including wind operator and technician courses.

2 0 0 9 N P P D A n n u a l R e p o r t S a t i s f i e d C u s t o m e r s S e r v i c e A r e a M a p s S e n i o r M g t . Te a m & B o a r d o f D i r e c t o r s

A panoramic view of NPPD’s Centralized Customer Care Center. In 2009, customer contact specialists at the Call Center answered 244,037 calls. The calls came from NPPD end-use customers and from customers of 22 of our wholesale partners. Calls ranged from billing inquiries to outage reports to questions about new NPPD projects. The Call Center employs, on average, 43 colleagues, and it operates 24 hours a day, seven days a week. With one toll-free call to 1-877-275-6773, electric customers from around the state can receive prompt, knowledgeable service.

As a public power entity, we believe there is no such thing as “too much” feedback from customers, and we employ many types of communication vehicles. For example, one of our vital modes of communication, NPPD’s Centralized Customer Care Center in Norfolk, handled a total of 244,037 calls in 2009 from our end-use customers and customers of our public power partners. This was an increase of nearly 10,000 calls from 2008. Calls typically can range from billing inquiries, to change-of-service calls (hookups or disconnects), to outage reports and questions about NPPD projects.

Public meetings were another method we used to reach out to customers. Meetings were held to exchange information dealing with topics like our new transmission projects, Cooper Nuclear Station’s license renewal and the siting of new, wind energy facilities.

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—Ron Asche President & CEO”


P r o g r e s s e n t i a l sN P P D ’s

S e n i o r M a n a g e m e n t Te a m

L e a d e r s h i p i s t h e t a s k o f a l i g n i n g o u r c u s t o m e r s ’ n e e d s w i t h N P P D ’ s c o r p o r a t e g o a l s a n d t h e n i n s p i r i n g o u r c o l l e a g u e s t o a c h i e v e t h e m .

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”R o n A s c h eP r e s i d e n t &

C h i e f E x e c u t i v e O f f i c e r

Tr a c i B e n d e rV i c e P r e s i d e n t ,C h i e f F i n a n c i a l

O f f i c e r & Tr e a s u r e r

P a t P o p eV i c e P r e s i d e n t &

C h i e f O p e r a t i n g O f f i c e r

E d Wa g n e rV i c e P r e s i d e n t ,

C u s t o m e r S e r v i c e s

S t u M i n a h a nV i c e P r e s i d e n t ,

N u c l e a r &C h i e f N u c l e a r O f f i c e r

J o h n M c C l u r eV i c e P r e s i d e n t ,

G o v e r n m e n t a l A f f a i r s & G e n e r a l C o u n s e l

R o y S t e i n e rV i c e P r e s i d e n t ,

H u m a n R e s o u r c e s & C o r p o r a t e S u p p o r t

—Ron Asche President & CEO”


Board of Directors, back row, left to right: Darrell Nelson, Broken Bow, Subdivision 5; Ron Larsen, Kearney, Subdivision 3; Mary Harding, Lincoln, Subdivision 2; Wayne Boyd, South Sioux City, Subdivision 11; Ed Schrock, Holdrege/Elm Creek, Subdivision 6. Middle: Larry Linstrom, North Platte, Subdivision 4; Dennis Rasmussen, Lincoln, Subdivision 1; Ken Kunze, York, Subdivision 7; Virgil Froehlich, Norfolk, Subdivision 10. Front: Jerry Chlopek, Columbus, Subdivision 9; Gary Thompson, Beatrice, Subdivision 8.

(A) Cheyenne County - excludes Sidney (B) Box Butte County - excludes Alliance (C) Otoe County - excludes Nebraska City (D) Dodge County - excludes Fremont (E) Washington County - excludes Blair

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105

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3

9

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N P P D , w o r k i n g t o g e t h e r w i t h l o c a l p u b l i c p o w e r p r o v i d e r s , w e l i g h t u p l i v e s .


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NPPD Annual Report 2009

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