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NEBRASKA POWER REVIEW BOARD ORIENTATION MANUAL

TABLE OF CONTENTS

Chapter 1: BOARD ROLES AND RESPONSIBILITIES
Chapter 2: HISTORICAL PERSPECTIVE
Chapter 3: THE ELECTRIC INDUSTRY IN NEBRASKA
Chapter 4: HOW THE BOARD OPERATES
Chapter 5: PRB PLANNING AND REPORTS
Chapter 6: PRB POLICIES
GLOSSARY

CHAPTER 3
THE ELECTRIC INDUSTRY IN NEBRASKA

INTRODUCTORY OVERVIEW

There are several different categories of power suppliers in Nebraska. These include:

Municipalities

Most of the municipalities are relatively small in size and provide power to their communities by purchasing it at wholesale and then selling it to the municipality’s customers at retail. Several dozen municipalities own generation units intended only to be used during peak periods. A few of the municipalities, such as the City of Lincoln and the City of Grand Island, own large baseload generation facilities or the rights to output from other generation facilities.

Agencies formed under the Nebraska Municipal Cooperative Financing Act

Currently, the only agency formed under the Nebraska Municipal Cooperative Financing Act is the Municipal Energy Agency of Nebraska (MEAN). MEAN is part of the Nebraska Municipal Power Pool. It was organized in 1980 to secure power supply for its members and provide related administrative and technical services. MEAN combines the capacities of a number of municipally-owned plants with WAPA power and purchased power. It supplies power and energy to approximately 40 municipalities in Nebraska, Colorado and Kansas. MEAN owns several generating facilities, including a 10.5 megawatt wind farm near Kimball, Nebraska, and has capacity rights to output from generating facilities such as the coal-fired Laramie River Station. NMPP supplies related energy services to approximately 75 municipal systems in Nebraska, Colorado, Iowa, Kansas, South Dakota and Wyoming.

Non-profit cooperatives and rural public power districts

The cooperatives and rural public power districts both operate in the same basic way, purchasing their electric power needs at wholesale from large generators and then distributing the electrical energy to their customers at retail. Public power districts are political subdivisions of the State, while cooperatives are not-for-profit private entities. Most of the geographic territory of the state is served by cooperatives and rural public power districts.

Tri-State Generation and Transmission Association, Inc., a non-profit wholesale electric energy supplier headquartered in Denver, Colorado, furnishes wholesale power to six of the power suppliers located in the far western part of Nebraska.

Large Public Power Districts with Generation Facilities

Nebraska Public Power District is the largest wholesale supplier of electricity in Nebraska. It furnishes wholesale energy to 24 of the rural public power districts and cooperatives. It also provides electricity at wholesale to 52 municipal systems, and at retail to approximately 85 municipal systems. NPPD has nuclear, coal, natural gas and wind generation resources.

The Omaha Public Power District (OPPD) is the largest retail public power district in the state. Although it is primarily a retail power supplier, it owns numerous generation facilities and has some wholesale customers. OPPD serves all or part of 13 counties in the southeast portion of the state. It has nuclear, coal, oil, gas-fired and landfill gas resources, and purchases power from the Western Area Power Administration (WAPA).

Loup River Public Power District owns two hydroelectric generation facilities in eastern-central Nebraska, although the district purchases most of its power from NPPD. Loup’s retail service area includes the City of Columbus, Nebraska, and other municipal systems in the nearby area.

Public Power and Irrigation Districts

Central Nebraska Public Power and Irrigation District generates electricity through hydroelectric sources such as Kingsley Dam. It sells its entire output to NPPD and has no retail customers. It also operates an irrigation and canal water distribution system that serves 119,000 acres.

Distribution

Distribution entities provide power to the ultimate consumer at retail. In some cases, these are the same entities that are involved in the generation and transmission of power as well. Distribution utilities have service areas in which they have the exclusive right to provide service, and also have a general obligation to provide service to all customers.

The rural public power districts and electric cooperatives supply the majority of the rural areas in Nebraska. At the present time, there are 32 rural electric systems headquartered in Nebraska. Except for Norris Public Power District (Norris PPD) and Cedar-Knox Public Power District, the rural electric systems have joined together to obtain their power supply through two generation and transmission cooperatives, Tri-State G & T for western Nebraska and Nebraska Electric Generation & Transmission Cooperative (Nebraska G&T) for the eastern two-thirds of Nebraska.

Many municipalities own their distribution system and lease the facilities to the power supplier providing retail service to that municipality. These are known as “leased towns.” In 1972 bonds issued to purchase facilities of privately-owned companies were retired. Some municipal electric systems were taken over by municipalities. Most of the towns leased their facilities to NPPD or the utility then serving the town. In 1999 NPPD and its rural wholesale customers underwent a “realignment” whereby NPPD transferred its service area right to municipal systems to the local rural public power districts in whose service area the town was located. The contracts involved typically provide the municipalities that lease their distribution system with about ten percent of the retail revenues as a lease payment.

Related Support Organizations

These organizations were established to negotiate costs for power and provide numerous services to their members. They consist of:

Nebraska G & T purchases power for 24 rural electric systems.

Nebraska Rural Electric Association (NREA) provides administrative and technical services to most of the rural public power districts and cooperatives.

League of Nebraska Municipalities provides administrative and technical services to its municipal members.

Nebraska Power Association (NPA) was established to provide a forum for Nebraska’s electric utility industry to discuss issues, work cooperatively, and provide services to all utilities in the State. It also works directly with the Board to complete statutorily-mandated power supply plans and transmission and energy conservation studies. It is also a forum through which the power industry can take a collective stance on pending legislation.

Additional related organizations include:

Rural Electric Supply Cooperative (RESCO), Federated Rural Electric Insurance Exchange, American Public Power Association (APPA), National Rural Electric Cooperative Association (NRECA), Electric Power Research Institute (EPRI), Mid-Continent Area Power Pool (MAPP), Southwest Power Pool (SPP), National Rural Utility Cooperative Finance Corporation, Western Area Power Administration (WAPA), and Mid-West Electric Consumers Association.

Some of the services provided include employee training services, joint power supply planning, governmental services, power contracting, software development, central purchasing and legal services.

ACRONYMS FOR ELECTRIC INDUSTRY

State Entities

Regional Entities

Federal Entities and National Organizations

Federal Entities and National Organizations (continued)



Nebraska Power Review Board
301 Centennial Mall South
P.O. Box 94713
Lincoln, NE 68509-4713
PH: (402) 471-2301
Fax: (402) 471-3715

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