Essent
Our Product is Energy
Our Mission is Service
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Essential news for NMPP Energy members
March 2016 Vol. 41 Issue 3
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Nebraska Municipal Power Pool
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Municipal Energy Agency of Nebraska
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INSIDE
PUBLIC POWER: Local control
remains a valuable asset for electric
utilities...........................................Page 3
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National Public Gas Agency
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Public Alliance for Community Energy
Pipeline rate case adds layer of complexity
to upcoming Choice Gas selection period
ACE will work to assist customers in making an informed choice
The two-week Nebraska Choice Gas selection period
is quickly approaching (April 15-28) and, like every year
since the late 1990s, community-owned and not-for-profit
ACE is gearing up to assist residential and commercial
customers in making an informed choice and to offer competitive pricing options.
The good news for this year is natural gas prices are
expected to remain near historical lows, providing customers with continued overall low retail rate options from
which to choose.
For ACE and other competing suppliers, this year’s
selection period also comes with a challenge: Offering
pricing options without knowing the full cost of delivering
natural gas to customers.
This scenario was brought on by a pipeline rate case
working its way through the Federal Energy Regulatory
Commission (FERC). The rate case, filed by Tallgrass
Interstate Gas Transmission (Tallgrass), is not expected
to have a final ruling until after the selection period. This
leaves ACE and the other suppliers in the position of offering natural gas rates without knowing the total transport costs to deliver the natural gas.
All natural gas delivered to customers in the Choice
Gas program is shipped through the Tallgrass pipeline
system regardless of supplier selected.
Understanding transport cost
Included on each customer’s natural gas bill are
several cost components for the delivery of natural gas.
One of these components is the transportation cost of
shipping natural gas by pipeline from its origin to homes
and businesses. The transportation cost is divided into two
sections:
1) From the well head to the city gate using the interstate pipeline system (Tallgrass). This cost is embedded in
the supplier rate for natural gas and is listed as “commodity
charge” on natural gas bills.
2) From the city gate to your community for delivery
to homes/businesses using the local distribution system
(Black Hills formerly SourceGas). This is a separate charge
by Black Hills/SourceGas and is listed as a “distribution
charge” on natural gas bills.
See ‘PIPELINE RATE CASE’ on page 2
Transport costs from the wellhead to your home...
Rate case pending
for transport costs
on this section
Storage
City Gate
1
Natural gas is transported from the wellhead through the Tallgrass
interstate pipeline system. This cost is embedded into the supplier rate
and listed as “commodity charge” on bills.
2
It then travels from the city gate to the community for
delivery to homes/businesses through the Black Hills
(formerly SourceGas) local distribution system. This is
the “distribution charge” on bills.
Pipeline rate case
Continued from page 1
The rate case
In October 2015, Tallgrass filed a rate request
with FERC to update its rate design, tariff and
transportation and storage rates. The rate increase
request is significant—the average increase is
approximately 80 percent higher than Tallgrass’
current transport rate. This is the first time in 17
years Tallgrass has filed such a case.
Timing of rate case ruling
Since a final ruling on the rate case is expected
after the selection period, this puts ACE and other
suppliers in the position of having to factor an
unknown pass-through cost into pricing options.
Impact on Choice Gas
suppliers and customers
The ruling on this case likely will result in
increased transportation costs for suppliers, and as
a pass-through cost, ultimately end-use customers.
The unknown cost likely will add some complexity
and confusion into selecting a supplier. Each supplier will have its own pricing structure to address
the unknown pipeline cost. ACE is taking steps to
educate customers prior to the selection period and
will be actively educating and informing customers
during the selection period so they can ultimately
choose the best rate and price option for them.
ACE is here to help
As each supplier will have its own pricing
options to address the uncertainty of the Tallgrass
rate filing, this year could be more confusing for
customers who call suppliers seeking competitive
pricing options. Some suppliers may quote lower
rates based on current pipeline transportation costs
but prices will likely increase once the pipeline
rate case is settled. Other suppliers may quote
prices based on anticipated pipeline transportation
cost increases.
ACE encourages all customers to ask suppliers
if their price quotes are subject to change throughout the gas year, which runs from June 1, 2016 to
May 31, 2017.
How ACE is addressing
the issue with rate options
ACE will offer customers its traditional per
therm pricing options (fixed, market index and
ACE WeatherShield™) for 1 or 2 years. Each of
these options will be divided into a guaranteed
per therm rate option for the year and a rate
with a “plus” option that accounts for the added transport cost after the rate case is settled.
For example, for a fixed rate option a
customer has two options:
• Guaranteed Fixed Rate (1 or 2 years) or
• Fixed Rate Plus Pipeline Charges (1 or
2 years)
Each option has a pro and con for customers to consider:
Guaranteed Fixed rate does not change
for the entire gas year.
PRO: Customers know exactly what their
rate is for the year.
CON: Because this rate includes a built-in
cost for the unknown transport component,
the customer’s fixed rate will be slightly higher
if the rate case settlement amount is less than
the built-in cost.
Fixed Rate Plus Pipeline Charges includes
an adder to account for the pass-through transport cost once the rate case ruling is settled.
PRO: Customers receive a lower fixed rate to
start, before the transport cost adder is eventually
added to the rate. The result: customers pay only
for the exact amount of natural gas they use.
CON: Customers have some initial uncertainty locking in their fixed rate due to the
transport cost adder being unknown until the
pipeline rate case is settled.
And as always, ACE is here to assist Choice
Gas customers in making an informed decision.
Customers are encouraged to call ACE at (800)
454-4759 if they have questions. ACE is happy
to help customers in explaining the issue and in
selecting the best option for them.
There is good news regarding natural gas prices...
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March ‘16
The good news for the Choice Gas selection period this year is natural gas prices are
expected to remain near historical lows, providing customers with continued overall low retail
rate options from which to choose. The selection period is set for April 15-28.
Local control remains benefit amid change
There are significant changes occurring within the electric energy industry. Granted,
there is always a certain level
of evolution in From the
any industry,
Executive
Director
but the speed
and amount of
change happening currently
in the energy
industry is more
than what I’ve
experienced in
my two-plus
decades in the By Bob Poehling
industry.
These changes include:
• Restructuring wholesale
power markets and the way
electric generation is centrally
coordinated, dispatched and
transmitted;
• Significant integration
of renewable energy onto the
electric grid;
• Increased distributed generation (behind-the-meter solar
and wind);
• Increased environmental
regulations such as the Clean
Power Plan; and
• Increased compliance
regulations to strengthen grid
reliability.
Amid these changes, challenges to the not-for-profit public power business model have
cropped up.
A recent report released by
the Platte Institute for Economic Research questioned public
power’s affordability in this new
energy landscape. Individual
private investment interests
are knocking on public power’s
doorstep in Nebraska, claiming
they have a better path—one
which boasts of short-term
benefits and is likely motivated
by opportunities for profit but
would come at the expense of
surrendering local control.
Fortunately, public power
utilities possess one of the best
assets to address those challenges: the power to chart their own
destiny through local control.
Public power utilities’ special relationship with their customers helps them set a course
that best serves their individual
community’s interest.
Public power is accountable
to elected peers through city
councils, boards or commissions
that directly chart the course of
the local utility. These elected
representatives of the public
make key decisions regarding
power supply and rates. They are
highly accessible because they
live and work in the community
they serve – they are neighbors,
fellow grocery shoppers, fellow
school sports fans and business
owners and community supporters.
Public power has served
utilities in this region extremely
well over the past 80 years. For
decades, public power utilities in
this region provided some of the
most economical electric rates
in the country and they continue to do so. According to the
American Public Power Association, Nebraska’s publicly-owned
utilities overall average revenue
per kilowatt was 8.8 cents in
2014, which is highly competitive regionally and nationally.
This doesn’t mean there
aren’t challenges ahead as the
previous list indicates.
Through local control, customers of public power utilities
have a voice as to how future
challenges are addressed. This
fact, combined with competitive rates, a long track record of
reliability, customer responsiveness and not-for-profit status,
remains a significant value and
a keystone that has made public
power such a long-term success
story.
Next Essent newsletter to be published in May
Due to the Annual Meeting & Conference scheduled for March
29-31, the Essent newsletter will not be published in April. The next
issue will combine April/May and be published in early May.
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March ‘16
ACE board
approves
distribution
to member
communities
The ACE (Public Alliance
for Community Energy) board
of directors recently approved
distributing $200,000 to its 72
Nebraska member communities
of the not-for-profit, community-owned natural gas supplier.
The board may authorize
returning any excess revenue
beyond the cost of operating
the organization to its member
communities. Since forming in
1998, ACE has returned more
than $1.6 million back to its
Nebraska members. The funds
are used in various ways to
This
month’s
benefit each ACE member community.
“Along with ACE’s mission of
providing competitive pricing in
the Nebraska Choice Gas program
and to serve as an advocate for
Choice Gas customers, ACE gives
funds back to benefit Nebraska
communities,” said Beth Ackland,
ACE director of retail gas services.
“It really is a win-win situation for
Nebraskans.”
The Choice Gas selection
period is set to begin April 15 and
run through April 28. Selections
may be made online through April
28 using ACE’s Web site (www.
ACEenergy.org) or by phone at
(800) 454-4759. Selection forms
will be mailed out to all eligible
customers prior to the beginning
of the selection period.
More information about
ACE and its role in the Nebraska
Choice Gas program is available
at www.ACEenergy.org.
Featured Champion Business
Salt Creek Software specializes in municipal, utility-related software
Salt Creek Software, Inc. specializes in the
development and support of load management,
accounting, and customer information software
applications. These
applications are
designed to meet the
needs of municipalities and municipal utilities. Salt Creek Software,
formed in 1997, is an experienced company located
in Lincoln, Neb. All their employees have vast
expertise in developing and supporting customized
municipal and utility related software.
Salt Creek has enjoyed a partnership with NMPP
Energy for many years since the development of PowerManager®, a software suite of municipal accounting
and customer information applications. These applications are being used throughout the nation.
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March ‘16
One of Salt Creek’s specialties is their friendly,
personalized customer support. Every year some of
their employees attend the PowerManager® Users
Group (PMUG) Annual Conference and PowerManager® refresher classes to listen to users’ needs,
give presentations and provide training updates.
Salt Creek Software is keeping pace with technology by updating their development tools and
incorporating these advances into their software
products. At present, they are working to move
PowerManager® into a client server environment.
This major improvement is scheduled to be ready for
testing in 2016.
Whether developing new products, providing
customer support or making customized modifications to meet the needs of a specific user, Salt Creek
Software is there when you need them.
For a complete listing of NMPP Energy Champion Businesses, see page 7
2016 NMPP Energy Annual Meeting & Conference
March 29-31 Midtown Holiday Inn - Grand Island, Neb.
It’s not too late to register!
Online registration ($160) at www.nmppenergy.org
Complimentary Registrations
Up to two complimentary registrations provided to elected officials with every paid member
registration.
Lodging Information
NMPP Energy Annual Meeting & Conference
Midtown Holiday Inn, Grand Island, Neb.
2503 S. Locust Street – (308) 384-1330
Please call Laurie at (800) 234-2595 for more information
MEAN Board approves wholesale power agreements
The Municipal Energy
Agency of Nebraska (MEAN)
Board of Directors approved
five-year wholesale power
supply contracts with the Village of Snyder, Neb., and the
City of Lake View, Iowa, at
their board meeting in North
Platte, Neb., Jan. 21. Both
contracts begin June 1, 2016
and end May 31, 2021.
With a population of
about 300 residents, Snyder
has an approximate peak elec-
tric load of two megawatts.
It is located in northeast
Nebraska. Lake View (pop.
1,128) is located in West
Central, Iowa, and has an approximate peak electric load
of five megawatts.
MEAN currently serves
65 participants in Colorado,
Iowa, Nebraska and Wyoming
with reliable and economical
power supply and utility-related services.
“We’re pleased to welcome Snyder and Lake View
as wholesale power participants of MEAN and to a
broader extent as members of
the Nebraska Municipal Power Pool,” said Tim Sutherland,
MEAN’s director of wholesale
electric operations. “We look
forward to a positive relationship in which we can serve
those communities with their
wholesale electricity needs
and other services.”
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March ‘16
Where the Clean Power Plan goes from here...
The Environmental Protection Agency’s (EPA) highly
contentious Clean Power Plan
was put on hold after a 5-4
ruling on Feb. 9 by the U.S.
Supreme Court that granted a
stay on the regulation until legal
challenges have played out.
The ruling came after the
D.C. Circuit Court of Appeals
denied a request to stay the regulations in January. A coalition
of 25 states, including Nebraska,
appealed to the Supreme Court
for the stay request.
The Clean Power Plan
targets an overall nationwide
32 percent reduction in carbon
emissions from the power sector by 2030. Under the plan,
the EPA has assigned an emissions target for each state. The
reduction target for Nebraska
NDEQ postpones statewide meetings
The Nebraska Department of Environmental Quality
announced the postponement of scheduled meetings in nine
communities throughout the state to share information and
gain feedback on the Environmental Protection Agency’s Clean
Power Plan.
The Supreme Court’s ruling “undercuts any urgency states
have to submit a plan in September 2016,” NDEQ director Jim
Macy said in a statement. The meetings were scheduled from Feb.
16 through March 3. Representatives from the Municipal Energy
Agency of Nebraska planned to attend several of the meetings.
and Colorado seperately is 40
percent. Iowa’s target is 42 and
Wyoming’s is 44 percent.
The next legal stop for the
Clean Power Plan is a hearing at
the D.C. Circuit Court of Appeals on June 2 and then ultimately it will likely be appealed
back to the Supreme Court.
If the rule is eventually
upheld, the Supreme Court’s stay
most likely would impact the
plan’s initial compliance timelines,
which called for state plans to be
submitted by September 2016,
with an optional two-year extension to September 2018.
Scalia’s death adds uncertainty to plan’s process
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The sad and unexpected
death of U.S. Supreme Court
Justice Antonin Scalia in February presents a sudden vacancy on
the court that impacts the Clean
Power Plan.
Legislative
President
Notes
Obama said he
plans to nominate a candidate
for the vacancy
soon. Republican
leadership in
Congress, however, want to wait
By Chris Dibbern
until after the
next presidential
election. With only eight justices,
the court may opt to delay certain
arguments and rulings until there is
a full bench, which will move back
compliance deadlines, if the plan is
ultimately upheld.
With the Supreme Court
granting a temporary stay of
the plan prior to Scalia’s death,
many states postponed public
meetings to discuss the plan.
Each state makes its own
decision regarding whether to
continue working on individual
state plans or to put their work
on hold until the courts ultimately resolve the issue.
Nebraska and Colorado put
on hold public hearings scheduled for spring. Iowa held its
first public hearing Feb. 22 and
its second hearing is slated for
March 22 in Des Moines.
Energy bills in Nebraska
Two bills in the Nebraska
Legislature (LB 824 and LB
1068) are taking time, energy
and effort.
LB 824, named as a committee
priority bill, would allow private
renewable energy development in
the state for export to other states.
The Natural Resources Committee
may move the bill to the floor with
a divided outcome. There are many
aspects to the bill to consider such
as private large wind farms paying
local property taxes for developed
projects, local transmission and
eminent domain impacts.
LB 1068, a bill to regulate
public power by a state-wide regulatory body, died in committee.
Daniel Ortiz, city administrator
for the City of Kimball, Neb., was
among those testifying against the
bill siting local control and the
fact the bill adds an unnecessary
layer of regulation around Kimball’s electric rates. A study resolution on rate regulation is expected.
Champions are businesses and organizations
that support NMPP Energy’s effort to provide
products and services to members. Consider
these businesses when your utility or municipality
has a business need. If your business is interested
in becoming an NMPP Energy Champion, call
Andrew Ross at (800) 234-2595.
Champions Business Directory
Financial Services
Ameritas Investment Corp............................................................................................................... Omaha, Neb.
D.A. Davidson & Co. ......................................................................................................................... Omaha, Neb.
UNICO Group, Inc. and Midlands Financial Benefits ...................................................................Lincoln, Neb.
Nebraska Energy Federal Credit Union ................................................................................... Columbus, Neb.
RBC Capital Markets ..........................................................................................................................Denver, Colo.
Smith Hayes Financial Corp. .............................................................................................................Lincoln, Neb.
Utility Services & Supplies
EnergySolutions, Inc. ....................................................................................................................... Omaha, Neb.
Hometown Connections, LLC ....................................................................................................Lakewood, Colo.
JK Energy Consulting, LLC ................................................................................................................Lincoln, Neb.
Kriz-Davis Co...............................................................................................................................Grand Island, Neb.
NovaTech...............................................................................................................................................Lenexa, Kan.
PDS, Inc. .............................................................................................................................................. Omaha, Neb.
Protective Equipment Testing Laboratory............................................................................. Great Bend, Kan.
REM Electric, Inc. ..................................................................................................................... Nebraska City, Neb.
RESCO (Rural Electric Supply Cooperative) .................................................................................. Ankeny, Iowa
Solomon Corporation .................................................................................................................... Solomon, Kan.
Computer/Technology Services
VentureTech ........................................................................................................................................Lincoln, Neb.
Salt Creek Software, Inc. ....................................................................................................................Lincoln, Neb.
Engineering Services
EPSIM Corporation ...........................................................................................................................Boulder, Colo.
HDR ..................................................................................................................................................... Omaha, Neb.
JEO Consulting Group, Inc. ............................................................................................................. Wahoo, Neb.
Lutz, Daily & Brain, LLC ......................................................................................................... Overland Park, Kan.
Olsson Associates ...............................................................................................................................Lincoln, Neb.
Sega Inc. ................................................................................................................................................Stilwell, Kan.
Stanley Consultants, Inc. ..............................................................................................................Muscatine, Iowa
Legal Services
Chapman and Cutler, LLP .......................................................................................................Salt Lake City, Utah
Gilbert Hamberg Law Office ...............................................................................................................Yardley, Pa.
Spiegel & McDiarmid ...................................................................................................................Washington, D.C.
Telecommunication Services
River Oaks Communications Corp. .......................................................................................... Centennial, Colo.
Upcoming Meetings
March 29-31 - NMPP Energy Annual Meeting & Conference, Grand Island, Neb.
March 29 - ACE Board (at NMPP Energy Annual Conference)
March 30 - NMPP Members Council & Board (at NMPP Energy Annual Conference)
May 18-19 - MEAN Committees and MEAN Board/Mgmt. Committee, North Platte, Neb.
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March ‘16
8377 Glynoaks Drive
Lincoln NE 68516
NON PROFIT ORG
U.S. POSTAGE
PAID
PERMIT 402
LINCOLN, NE
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Employment
Lineman Apprentice
The City of Wray, Colo., has an
immediate opening for a lineman
apprentice within the Public Works
Division. This position is responsible
for the operation and maintenance of
the municipal distribution system (approx. two square miles) serving 2,300
residents.
Essential job duties include but
are not limited to:
• Working outdoors in all types of
weather conditions;
• Design ability - recommend
electric supplies and replacement;
and
• Subject to call out and overtime
hours.
Successful applicant will have
knowledge of electrical safety programs, be qualified to complete an
apprentice program, have strong
A complete list of current job openings in member communities
is available on NMPP Energy’s website: www.nmppenergy.org
interpersonal skills and a valid driver
license and able to obtain Class A
Commercial Driver License. Prefer
lineman experience with municipal
systems.
The City of Wray offers a competitive compensation package that
includes PERA, paid leave, and
health care benefits. Salary is negotiable depending on education and
experience. Applications available at
www.cityofwray.org. Position open
until filled. The City of Wray is an
Equal Opportunity Employer. Send
applications/resumes to: City of Wray,
P.O. Box 35, Wray, CO 80758.
NMPP Employment
NMPP Energy currently has employment openings for:
• Computer Support Technician
• Manager of Resources and
Transmission
For job descriptions and application information, go to www.nmppenergy.org and click on the “NMPP
Energy Job Opportunities” link on the
home page.
To submit an ad: NMPP members can advertise job openings for free in the Essent newsletter and on the
nmppenergy website. E-mail your job opening to: info@nmppenergy.org.
Essent is published as a service to NMPP Energy members. The subscription rate for nonmembers is $50 per year. Copyright 2016, Nebraska Municipal Power Pool.
Send comments to: Essent, Attn: Editor, 8377 Glynoaks Drive, Lincoln, NE 68516 or e-mail: kwickham@nmppenergy.org;
phone: (800) 234-2595 • Fax: (402) 474-0473 • www.nmppenergy.org
Publisher: Robert L. Poehling, Executive Director, NMPP Energy
Editor: Kevin Wickham, Communications Specialist