Kevin Gaden, Director of Wholesale Operations for the Municipal Energy Agency of Nebraska discusses issues involved in municipalization for a Boulder, CO audience. Following the expiration of a franchise agreement with Xcel Energy, Boulder is considering municipalization.

1. Nebraska Municipal Power Pool (NMPP)
Municipal Energy Agency of Nebraska (MEAN)
City of Boulder, Colorado
January 27, 2011
Kevin Gaden
Director of Wholesale Electric
Operations
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2. NMPP Energy
NMPP Energy is a nonprofit, member-owned
organization providing electricity, natural gas and
utility related services to nearly 200 member
communities across seven Midwestern and
mountain states. NMPP Energy promotes the
benefits of joint action and local utility control
among its member communities. NMPP Energy
consists of four entities:
Nebraska Municipal Power Pool (NMPP)
Utility-related services
Municipal Energy Agency of Nebraska (MEAN)
Wholesale electric supply
National Public Gas Agency (NPGA®)
Wholesale natural gas supply
Public Alliance for Community Energy (ACE)
Retail natural gas choice
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3. MEAN
 Formed in 1981 under provisions of the
Municipal Cooperative Financing Act and is a
political subdivision of the State of Nebraska
 Provides wholesale power supply to public
entities throughout the region via the
Electrical Resources Pooling Agreement
(ERPA)
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4. MEAN’s Primary Mission
 To provide long-term, reliable and economical
power supply resources and utility-related
services to MEAN member communities
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6. Advocacy
 MEAN membership and active involvement in outside
organizations
 American Public Power Association (APPA)
 Utility Wind Integration Group (UWIG)
 Western Area Power Administration (WAPA)
 Colorado Association of Municipal Utilities (CAMU)
 Solar Electric Power Association (SEPA)
 Western Electricity Coordinating Council (WECC)
 Transmission Access Power Study Group (TAPS)
 Western States Power Corp (WSPC)
 Rocky Mountain Generation Coop (RMGC) suspended
 Rocky Mountain Reserve Group (RMRG)
 Southwest Power Pool (SPP)
 Midwest Independent Transmission System Operator (MISO)
 State and federal legislation
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7. = Member Generators
= Baseload resources
= Future resource (WEC 2)
SOUTH DAKOTA
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East Side
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8. BLANK SLIDE
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9. MEAN is a leader in Nebraska public
power renewables.
 Built the first wind farm in Nebraska MEAN Wind
Project at Kimball (Kimball, NE in 2002)
 MEAN owns, participates in, and purchases 43.5
MW nameplate capacity
 Largest proportion of renewable energy (both in
terms of system capacity and energy) among all
Nebraska utilities
 There are currently no State or Federal mandates
applicable to MEAN, however
 Aspen, CO (Service Schedule M Participant) was the winner
of the 2008 Wind Power Pioneer Award, given annually by
the US Department of Energy
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10. Transmission
 MEAN is transmission dependent
 Utilize 8 different transmission systems to serve
member loads
1. NPPD
2. OPPD
3. Tri-State G&T
4. Western - Rocky Mountain Region
5. Western - Salt Lake
6. Xcel Energy – Colorado
7. Black Hills Power & Light
8. MidAmerican Energy
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12. Macro issues to consider in
municipalizing an electric utility
 Acquisition issues
 Costs (state regulated)
 Service area (state regulated)
 Finance
 Bond ratings
 Official statements
 Business plans
 Governance
 City council
 City council over Board of Utilities
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13. Macro issues to consider in
municipalizing an electric utility
 Autonomous Board of Utilities
 How is governing body selected
Elected vs. appointed
 Power Supply
 There are applications for all types of resources
 But there are limits
 Can’t store electricity
 Must produce and deliver simultaneously
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14. Operational Issues
 Power Supply
 Types of Resources
 Natural gas
 Coal
 Nuclear
 Renewables
 Hydro
 Demand Side Management
 Types of Power Suppliers
 Investor owned – PSCO
 Rural cooperative G & T – TSGT
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15. Operational Issues
 Municipal Joint Action
 MEAN
 Platt River
 Independent Power Suppliers
 Calpine
 Southwest Generation
 Municipal Self Supply
 Colorado Springs
 Lincoln, NE Electric System
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16. Operational Issues
 Length of Supply Agreements
 Short-term (1-5 years)
 Medium-term (5-20 years)
 Long-term (20 years or more)
 Each has pros and cons
 Distribution System (115kV & below)
 Ring Bus is like expressway
 System sectionalizing
 Improve reliability
 Reduce outage times
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17. Operational Issues
 Distribution substations
 Loading too high/too low
 Distribution feeders
 Overhead vs. underground
 Service drops to customers
 Metering
 Smart metering
 Changing technologies
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18. Operational Issues
 Transmission Issues: (115 kV & up)
 Who will transmission supplier be?
 Xcel
 TSGT
 WAPA
 Who will maintain equipment
 Specialized trade
 Specialized equipment
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19. Other Operational Issues
 Staffing
 Where will they come from
Might need 200+ employees
 Utility management structure
 Utilities management experienced at what
Generation
Transmission
Distribution
Business management
All or some of the above
 Safety
 How will staff maintain safe system
 How will you comply with NERC standards
Growing issue
 Mutual aid
Who will help in a storm
» Snow / wind / tornado / ice
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20. Finance
 How will utility cash flow?
 Bad debts / write-offs
 Payment lag timing
 Bond reserves
 Debt service coverage
 Bond ratings affect cost of debt
 Rating agency relationships
 Asset management
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21. Finance
 Office Operations
 Metering tied to billing system
 Implement new billing, business management system
 Service disconnect policies
 Customer service obligations
 Where does utility obligation for infrastructure end and then
begin for customer
Consistent with Xcel?
 Office and maintenance shop locations
 Where
 How many
 Hours of operations
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22. Summary of Issues
 Operational Issues (safety and reliability)
 Power Supply
 Transmission
 Acquisition Issues
 Long-term Operational Issues
 Business Management Issues
 Finance
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23. Summary of Discussion
 The power business is a very complex business.
 People depend on you 24/7
 Most take it for granted until it fails
 Business is getting more complex
 Customers
 Colorado PUC
 FERC
 NERC
 Financial community
 State laws on carbon
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24. Who can help?
 Initially
 Consultants – CAMU
 Lawyers
 Other municipals
 Specialized contractors
 Acquisition team
 Finance experts
 Power suppliers
 Trade associations
 APPA
 CAMU
 NMPP Energy
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25.  This is a very significant effort to undertake.
 Some of your customers will not help.
 Power suppliers can’t do it all.
 Most supply is bid to meet RFP standards
 Others will quietly hurt your efforts.
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26. Questions?
Kevin Gaden
kgaden@nmppenergy.org
www.nmppenergy.org
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