Energy
in the
GOOD LIFE
What’s inside:
32 SENIOR MANAGEMENT TEAM &
BOARD OF DIRECTORS
2 ECONOMIC STABILIT Y
10 SERVICE TO SOCIET Y
22 ENVIRONMENTAL STEWARDSHIP Financial Repor t Back Pocket Inser t
Corporate Profile
Nebraska Public Power District (NPPD), a public
corporation and political subdivision of the State
of Nebraska, operates an integrated electric utility
system including generation, transmission and
distribution facilities.
NPPD uses a mix of generating facilities and a
variety of fuels to meet customers’ electric energy
needs. We operate 5,214 miles of transmission
and sub-transmission lines and 2,684 miles of
distribution lines.
Revenues are primarily derived from wholesale
power supply agreements with 51 municipalities
and 25 public power districts and/or cooperatives.
NPPD also ser ves 89,600 customers in 81 Nebraska
communities at retail.
Formed by a merger on Jan. 1, 1970, NPPD works in
par tnership with Nebraska’s public power districts,
cooperatives and municipalities to help ser ve more
than 600,000 Nebraskans with retail or wholesale
electric power and energy -related ser vices.
Control of NPPD and its operations is vested in an
11-member Board of Directors, popularly elected
from within NPPD’s char tered territor y including all
or par ts of 86 of Nebraska’s 93 counties.
Our History Nebraska Public Power District
SERVING NEBRASKANS RELIABLY FOR DECADES
1974
Cooper Nuclear Station,
near Brownville, was
synchronized to the
nation’s power grid on
July 1, 1974.
1970
1970
Nebraska Public
Power District was
formed Jan. 1, 1970,
by a merger of the
Consumers Public
Power District and
Platte Valley Public
Power and Irrigation
District with assets
from the Nebraska
Public Power System.
1993
NPPD’s Control Center
began monitoring the
transmission grid system.
1980
1979
Unit I of Gerald Gentleman Station
began commercial operation on
April 2.
1982
Gerald Gentleman Station Unit 2
teamed with Unit I. Today, the plant
is the state’s largest generating
facility, capable of producing 1,365
megawatts of electricity.
2000
Nebraska Public Power
District’s Centralized
Customer Care Center
started answering calls from
customers all across the state.
1990
1998
The Springview Wind
facility began converting
the power of wind into
electricity. The twin,
750-kilowatt turbines
were a demonstration
project.
2008 2013
Since 2008, we have
contracted with eight new
wind farms in the state,
including Steele Flats which
began operating in 2013.
2006
On December 30, 2006,
a blanket of thick ice and
40 mph winds crippled
central Nebraska.
2000
2005
Beatrice Power
Station was put into
commercial service on
January 7, 2005.
2010
2005
The Ainsworth Wind
Energy Facility began
commercial operation
September 15, 2005.
2013
2010
The 87,000 sq. ft.
Norfolk Operations
Center consolidated
four locations into one
and uses a photovoltaic
array to help power the
building.
A Message
FROM THE PRESIDENT & CEO
and BOARD CHAIRMAN
PERFORMANCE IS MORE
THAN A NARRATIVE
Always there when you need us
Our tagline embodies NPPD’s commitment to
Nebraskans. It speaks to the 24x7 shifts of power plant
and system control operators, is reflected in our 20-year
integrated resource plan, and echoed in each meeting
with a wholesale partner utility or every customer’s call.
We are dedicated to enhancing the quality of life for
Nebraskans, and we have been for 43 years. We proudly
accept our
responsibility as
stewards of the
This report highlights
environment,
our efforts to remain
and we know
sustainable in a
price matters.
changing industry.
This report
highlights our
efforts in 2013 to
remain sustainable in a changing industry. Our definition
of sustainability is a practice that balances environmental,
economic, and societal needs, now and in the future.
If you are a regular recipient of our annual report, you
may find this year’s chronicle looks different. It’s more of
a graphical look at who we are, what we do, how we serve
our customers and this state. We wanted to illustrate our
performance is more than just a narrative, and we wanted
to demonstrate ours is a performance that endures.
Thank you for your support of NPPD and your shared
interest in ensuring we deliver on our mission to safely
generate and deliver reliable, low-cost, sustainable energy
and provide outstanding customer service.
Sincerely,
Patrick L. Pope, President & Chief Executive Officer
Nebraska Public Power District
Ron Larsen, 2013 Board Chairman
Economic
Stability
Turbine blades at Gerald
Gentleman Station
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SUSTAINABILITY Report
Provide low-cost power to
enhance the quality of life
ENERGY AFFORDABILITY
2013 sees $60 million surplus
Cost cuts and strong revenues resulted in
NPPD’s Board announcing there would be
no rate increase for customers in 2014.
At the start of the year, we anticipated a
two percent rate increase, but high summer
loads and employee efforts to reduce
costs returned a year-end surplus of more
than $60 million, $5 million of which was
represented by our Retail business unit.
This surplus, along with a payroll
reduction of nearly 107 positions from
voluntary early retirement incentive plans,
will help lower 2014 operational costs and
decrease the need for future rate increases.
More than $10 million cut in inventory
Excess inventory can be problematic for
a utility trying to cut costs. It consumes
working capital, makes less cash available,
and is inefficient to store.
Knowing this, we set a goal to reduce
inventory by making tough decisions and
changing mindsets. The result? More than
$10.5 million was removed from inventory
by the end of the year.
With better management alignment and
new inventory software, we will carry this
discipline into 2014.
In addition to equipment inventory,
NPPD’s transportation fleet has made a
concerted effort to retire and not replace a
number of assets.
Since 2012, NPPD has sold 236
transportation assets at auction and
eliminated 96 of them from the fleet. Their
sale generated $1 million in revenue and
removed $147,146 per year in repair and
maintenance costs. Collectively, these
efforts represent more than $6 million in
cost savings.
Whether turbine blades,
voltage dials, or digital
annunciators, NPPD’s
equipment reliability is
managed with a comprehensive
asset management plan,
preventative maintenance,
testing, and proactive planning
for upgrades and replacements.
FINANCIAL ASSISTANCE
Pennies help customers pay the bills
Keeping rates low is as important to us as
helping customers in need.
In 2013, 280 customers received $45,537
in financial assistance from NPPD’s Pennies
for Power™ program to help pay their
electric bills.
Administered by the United Way, the
energy assistance program is voluntarily
funded by customers and employees.
Customers gain savings with grants
Approximately $20 million in Rural Energy
for America Program grants were awarded
in 2013 to more than 225 Nebraska
businesses, including 75 agricultural
producers. NPPD and our wholesale utility
partners played a role in helping customers
obtain those grants.
Together, we performed energy audits
for customers with business, agricultural
Asset Inventory Reduction Saves Millions
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3
operations and building projects. The efforts
garnered 90 grants totalling more than
$6 million or about 30 percent of the state’s
total award funding.
Applications varied from irrigation and
grain drying upgrades to commercial
building and equipment improvements.
Energy projects related to the installation of
solar, wind, geothermal or other renewable
energy equipment were also eligible.
Energy efficiency upgrades
NPPD’s Energy Efficiency teammates
provide more than 50 different technical
services to industrial, commercial,
agricultural and residential customers
served by NPPD or any of its wholesale
partner utilities throughout the state.
2013 EnergyWise℠ Investments Per Program
One such example took place in June
when McCook’s St. Patrick School received
a check for $3,656 to fund a lighting
installation project. The school replaced
251, T12 fluorescent light fixtures with
more efficient, T8 fluorescent fixtures.
The new lights are expected to save the
school 28,250 kilowatt-hours annually and
reduce demand for energy by 6.4 kilowatts,
which equates to an estimated annual
savings of $2,825.
Nearly all of NPPD’s EnergyWise℠
Program budget was used in 2013 to fund
more than a dozen incentive programs and
efficiency initiatives. By partnering with our wholesale utilities,
we helped customers save 3.1 megawatts
(MWs) of electricity and slightly more than
17,164 megawatt-hours (MWh) of energy in
2013. See the budget breakdown to the left.
CONSTANT ENERGY
Good equipment delivers reliability
Electricity has to be available 24 hours
a day, seven days a week, 365 days a year.
And our workhorses - Gerald Gentleman
Station, Sheldon Station, and Cooper
Nuclear Station - make sure it is.
In 2013, Cooper set an all-time generating
record of 6,804,022 MWh, and GGS set
new, monthly generation records in January,
May and July. Collectively, our power plants
helped NPPD produce 20,830 gigawatthours of electricity.
Sheldon’s capacity factor exceeded
budget by 34 percent, indicating it
dispatched well in the energy market. The
availability factors for Canaday Station and
Beatrice Power Station were 97 and 98
percent, respectively, meaning the units
were available when we needed them.
This solid performance relies upon sound
equipment, proactive maintenance, and
continual assessment of our assets.
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SUSTAINABILITY Report
During GGS’s Unit 1 spring maintenance
outage, we replaced the burner
management and turbine controls systems
and did a partial replacement of the boiler
wall tubes.
Our wind generation assets performed
well, too. We addressed the root cause of
generator failures at our Ainsworth facility
in the first half of 2013 and significantly
reduced the generator failure rate.
At-the-ready with rental generation
Temperatures and drought can tax
Nebraska’s farms and our transmission
assets.
We saw this in 2012 when electrical load
on our transmission system in north central
Nebraska hit record levels. We had to curtail
some load to maintain reliability.
To avoid a repeated situation in 2013,
NPPD made various substation line and
equipment upgrades. We also rented and
installed mobile diesel generators at key
locations to inject up to 40 MWs of energy
into the electric system, if it would be
needed.
Fortunately, Mother Nature was kind and
only $3 million of an anticipated $7.9 million
in supplemental generation costs was used.
NPPD will re-install 24 MWs of mobile
generation in 2014, and until a new highvoltage transmission line between Hoskins
and Neligh is operational in 2016.
Customers help reduce generation
While ensuring enough power is available
to meet customer demand, we also
recognize the valuable role our customers
play in controlling their end-use loads and
reducing demand on the system during peak
times.
Irrigation represents 98 percent of the
load controlled by our utility partners. In
2013, this represented 573 MWs, which is
approximately the size of one unit at
GGS.
Over the past five years, the total
amount of connected irrigation
load has increased from 1,562 MWs
in 2008 to 1,936 MWs in 2013, an
average increase of 4.4 percent.
Millions of dollars
are spent annually
on new transmission
line construction,
refurbishments, and
preventative maintenance.
Building reliable infrastructure
As a member of the Southwest
Power Pool (SPP), NPPD plans
for both near- and long-term
transmission projects that will
provide greater reliability for our
customers.
Projects approved by SPP and
in development in 2013 were the
R-Project, Hoskins-to-Neligh line,
and Stegall-to-Scottsbluff line.
The R-Project is a 220-mile,
345-kilovolt transmission line
that will run north from Gerald
Gentleman Station to the Thedford
substation. It will then cross over to
the Wheeler/Holt/Antelope County
area and tie into a 345-kV line
owned by the Western Area Power
Administration.
Not only will the line increase
reliability throughout the state,
it will relieve congestion in the
transmission system and support
future renewable energy projects.
Total cost of the project is
estimated at $313 million, with an
in-service date of January 2018.
In 2013, NPPD held two rounds of
open houses to collect public input.
The Hoskins-to-Neligh, 345-kV
transmission line will connect a
substation located south of Hoskins
to a new substation near Neligh.
This $98.7 million project received
final approval in the fall of 2013 and
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Transmission towers exemplify not only the complexity of delivering power but the interconnectivity required.
NPPD measures its
service interruptions
to end-use customers
in terms of outage
duration and
frequency. Our
performance beats
both goals by good
margins.
should be in service by mid-2016. It will
relieve loading constraints experienced in
north central Nebraska in recent years.
At year-end, the Keystone XL Pipeline
Transmission Project was awaiting
presidential approval; SPP had approved
plans for a $32 million and 42-mile, 115-kV
line to address voltage issues in the Ord/
Broken Bow area; and SPP had given NPPD
notice to build a new 23-mile transmission
line from Stegall to Scottsbluff.
This latter project, expected to cost
$39 million, will reinforce the grid between
Scottsbluff and a substation near Stegall
owned by Basin Electric Power Cooperative.
System Average Interruption
Duration Index
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SUSTAINABILITY Report
NPPD will follow its public outreach
process again in 2014 to collect landowner
and public input regarding the siting of our
transmission lines. This process has resulted
in 98 percent of landowners voluntarily
signing easement agreements.
What does reliability look like?
To help prove our reliability, we
benchmark our outage performance against
public and private peer utilities.
On the distribution level for end-use
customers, we measure “how often” the
average customer is interrupted over a
one-year period. We also measure “how
System Average Interruption
Frequency Index
Transmission Average
Circuit Outage Frequency
long” in minutes the average customer is
interrupted in a year. As indicated in the
metrics to the left, NPPD’s performances in
frequency and duration for 2013 were well
within the first quartile.
We also measure the outage frequency
on our high-voltage transmission lines, or
how much our transmission circuits are
available over a one-year period. Like the
averages for our distribution system, this
metric to the right mirrors a better-thangoal performance.
Critical systems are in compliance
The results of NPPD’s third triennial
compliance audit conducted by the Midwest
Reliability Organization in 2013 were
excellent. NPPD received no violations in
either the Critical Infrastructure Protection
or Operations and Planning areas, ensuring
NPPD has met the North American Electric
Reliability Corporation standards and
requirements.
The first week of the onsite audit focused
on the physical and electronic protection
of NPPD’s critical cyber assets that operate
the bulk electric system. The second week
included an audit of NPPD’s Operations and
Planning area. The audit teams reviewed
a total of 39 reliability standards and 119
requirements.
Ready for the new, integrated market
“March 1, 2014” was branded in the
minds of hundreds of NPPD employees in
2013. It was the date NPPD expected to
enter a new energy market. Preparations
included learning new, day-ahead bidding
processes and operating under one
balancing authority.
SPP’s new Integrated Marketplace will
determine which generating units are
dispatched the next day for maximum costeffectiveness. Participants will gain access
to reserve electricity, improved regional
balancing of supply and demand, and the
integration of renewable resources.
As a member of SPP, NPPD expects to
reap the benefits of reduced transmission
congestion and the sale of our low-cost
generation to others, while delivering the
lowest-cost power to customers.
NPPD measures the
performance of its
high-voltage system
as well. Again, our
reliability beats the
set goal.
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7
Keeping the lights on.
That’s what we have done
for more than 40 years.
Cooper travels “Road to Excellence”
As a complement to more than
$600 million invested in Cooper over the
last several years, the plant’s employees
traveled a “Road to Excellence” in 2013.
Focused on organizational alignment,
corrective action, program performance,
modification implementation, radiological
performance, and outage execution, Cooper
enters 2014 standing in Column 1 of the
Nuclear Regulatory Commission’s (NRC)
Reactor Oversight Action Matrix and ready
for its refueling outage and evaluation by
the Institute of Nuclear Power Operations.
Cooper’s 2013 Industry Performance Index
FOCUSED ON LONG-TERM
POWER SUPPLY
Customers to help develop future contracts
More than 50 percent of NPPD’s existing
debt expires after 2021, which coincides
with the current expiration date of our
wholesale power contracts.
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SUSTAINABILITY Report
Knowing contract renewals are essential
to our ability to issue long-term debt,
NPPD organized customer teams to solicit
suggestions for what would be included
in a new agreement. The ideas varied
from retaining the current agreement to
developing a cafeteria plan of services in
conjunction with power supply.
NPPD wants to pursue long-term
commitments with our wholesale
customers to:
• save money by solidifying NPPD’s
good credit ratings and ensure we get
the lowest interest, tax-exempt bonds
possible;
• make the best, long-term generation
resource planning decisions for all our
customers, whether a municipality or
public power district;
• provide financial protection and
fairness for all customers served; and
• keep NPPD’s wholesale power rates
competitive in the region.
We will continue discussions started with
customers in 2013 and promise partnerships
with them that result in economic stability
for all of us and those we serve.
Public power is a good business model
for this state, and NPPD wants to ensure
we continue to provide the value we have
delivered to our customers long into the
future.
Uncertain costs curb nuclear uprate project
After years of economic analysis, NPPD’s
Board decided to not pursue an extended
power uprate at Cooper.
Our nuclear plant is a valuable asset and
a large contributor to NPPD’s carbon-free
generation, so adding another 146 MWs
with a power uprate was attractive. Yet,
initial cost estimates of $250 million grew
by mid-year to as high as $409 million, and
other utilities’ uprate project experience
indicated it could be even higher. Holding steady on wind projects
At of the end the year, NPPD was within
45 MWs of reaching its strategic goal to
generate 10 percent of its electricity by
2020 with new, renewable resources.
NPPD has excess power generation in
its portfolio, so the Board of Directors
decided to defer additional power purchase
agreements for wind projects proposed in
2013 wanting to take advantage of available
production tax credits set for expiration at
the end of the year.
With excess energy, it did not make sense
to ask customers to fund projects that
would produce even more energy than they
needed or used.
Sustainable financial performance
NPPD’s mission to safely generate and
deliver reliable, low-cost, sustainable energy
and provide outstanding customer service is
best reflected in customers’ pocketbooks.
The 10-year look at NPPD’s financial
performance below reveals a few challenging
years but an overall track record of pursuing
financial stability for customers. And we will
work hard over the next 10 years to keep
low-cost energy a benefit of living Nebraska’s
good life.
Scottsbluff businessman
Don Overman depicts
energy in Nebraska’s
good life by promoting
public power’s low
electric rates for
economic growth and
stability.
10-Year Surplus/(Deficit) Performance
SUSTAINABILITY Report
9
Service to
Society
More than 200
employees are
members of NPPD’s
fire brigades. Many
also volunteer to
serve their local
fire and rescue
departments.
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SUSTAINABILITY Report
Support communities; provide
outstanding customer service
PUBLIC SAFETY & HEALTH
Emergency Response Plans
Every NPPD facility has an emergency
response plan; we drill and conduct various
exercises to test ourselves; and we take the
safety mindset into our communities.
More than 200 employees serve on our
power plant fire brigades, with at least two
dozen more employees throughout the
state volunteering as community EMTs, first
responders or fire fighters.
NPPD knows it is our responsibility
to protect the people we serve and the
assets for which we are responsible, and
we do so with plans, practice, and calm
professionalism.
We simulate blackout scenarios to the
electrical grid, and Cooper employees
perform numerous annual emergency
preparedness exercises to protect the public
in case an event ever took place at our
nuclear power plant.
In 2013, we completed a comprehensive
review of our emergency response plan
for weather-related crises; conducted a
tabletop drill about a dam breech; and
performed an intruder exercise with the
Nebraska State Patrol at GGS.
This round globe
is one of 25 lights
installed around
Lake Maloney Dam
to enhance security
and increase boaters’
awareness of the
dam at dusk.
hardened containment vents; spent fuel
instrumentation; and our Emergency
Preparedness Plan.
We are also participating in the
Nuclear Energy Institute’s FLEX plan to
stage emergency equipment for potential
use at strategic locations. The cost of
implementing these safety enhancements
is currently estimated at more than
$78 million.
Statewide communications network
What began five years ago as an idea
to share a statewide radio network with
Nebraska’s public safety agencies, such
as the Nebraska State Patrol, Nebraska
Game and Parks Commission (NGPC), and
State Fire Marshal, has developed into an
operational system of radio base station
towers, consoles, mobiles, and portables
that keep NPPD’s transmission and
distribution crews connected.
In 2013, we completed a major software
upgrade to the system which is supported
by more than 600 mobile/portable radios
in NPPD’s trucks and vehicles. We will
continue to increase the reliability of
CNS Safety Enhancements Following Fukushima
Nuclear safety enhancements continue
Following the 2011 accident at the
Fukushima Daiichi power plant in Japan,
nuclear facilities have conducted numerous
evaluations to prove they can withstand
similar types of devastating accidents.
Cooper is complying with the NRC’s
orders and guidance for assessing seismic
and flood hazards; loss of on- and offsite power; events beyond CNS’s design;
SUSTAINABILITY Report
11
statewide coverage in 2014 by adding three
new radio base station sites to the system’s
established radio tower sites.
Water and recreational safety
A lineman’s boots
depict years of
serving Nebraska’s
customers.
NPPD frequently communicates the
importance of electrical safety, but when
it comes to public recreation, NPPD does
even more to protect customers and
recreationalists.
Avid boaters and vacationers are attracted
to the campsites, ramps and docks on or
near reservoirs and canals around our
power plants, especially during the summer.
We encourage water safety and work in
partnership with the NGPC to promote the
benefits of keeping boats clean of zebra
mussels.
One specific investment we made in 2013
involved installing 25 lights for safety and
security along Lake Maloney dam, a 1,650acre, regulating reservoir for the North
Platte Hydropower Plant. We also invested
in new equipment to clean the beach of
litter, broken glass and debris.
EMPLOYEE SAFETY, HEALTH
AND WELLNESS
NPPD’s first value: safety
NPPD’s safety performance improved
from 2.61 injuries per 100 employees in
OSHA Recordable Incident Rate
2003 to 1.44 injuries per 100 employees in
2013 – a decrease of more than 40 percent
in 10 years.
NPPD reached a safety milestone when it
was recognized as the top performer in the
American Public Power Association’s annual
safety contest for large utilities in 2011.
Since then, our performance has remained
in the top decile, but we saw our ranking,
as measured by OSHA recordable incidence
rates, inch up slightly.
To improve future safety performances,
our 2014 business plan includes improving
hazard recognition and response,
strengthening procedures, understanding
and reducing musculoskeletal disorders,
improving the safety culture, teaching
supervisors and leaders how to be better
coaches, and building on the recent success
of supervisor safety observation initiatives.
NPPD’s corporate safety campaign,
CHOOSE TO BE SAFE, is founded on the
principle that forethought and choice go
hand-in-hand everyday; and, as employees,
we choose to be safe for our teammates
and our families.
Employees share “My Safety Stories”
In addition to regular training, procedures,
job briefs, frequent safety reminders, and
making safe choices daily, NPPD employees
share their own safety stories with
each other via video.
Testimonial topics have ranged from
the importance of seatbelts, to the
risks of grilling with propane and the
dangers of working alone to complete
what are perceived to be simple,
household tasks.
Nuclear staff achieves milestone
Cooper employees’ dose
performance in 2013 has industry
peers talking. Plant staff finished the
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SUSTAINABILITY Report
year with their lowest cumulative radiation
exposure in the station’s 40-year history.
Additionally, Cooper did not experience
a single personnel contamination event
during the year.
The milestones exemplified Cooper’s
“Road to Excellence” action plan to improve
the site’s performance in several areas,
including radiological safety.
The plan, which will carry over into 2014,
engages all employees to set goals, use
industry metrics, rely upon their training,
and hold each other accountable.
Employees are SimplyWell™
NPPD’s wellness program, SimplyWell™,
offers health action plans specific to each
participating employee, based upon the
results of an individual screening. The
aggregate data for all employees is compiled
to identify top potential health risks of
NPPD’s employee population and offer
solutions or support.
For instance, to help employees lose
weight, NPPD implemented Zap the Pounds,
a friendly weight-loss competition among
employee teams.
Other initiatives for NPPD teammates
include Exercise Across Nebraska, a wellness
program where participants voluntarily log
daily exercise.
While health care costs continue to
increase, these programs, as well as the
customized approach and attention to
each employee’s well being, has expanded
participation and raised employee
awareness about the importance of their
health and its value to the organization.
CLASSROOM TO CAREER
Gloves, glasses and
a safety harness are
only part of a job’s
requirements. A “Choose
to be Safe” mindset has
to come first.
An educated workforce produces
results. That’s why we connect with young
students, recruit college graduates, support
utility-related college curriculum, and
hire individuals who embrace our mission
of delivering safe, low-cost, reliable and
sustainable energy to Nebraskans.
Creating excitement, K-12
Connecting with kids starts as early as
kindergarten, but ramps up when students
enter junior and senior high school.
NPPD’s Energy Education and Career
Outreach representatives meet with school
counselors and teachers to discuss electric
Career and Energy Education
5-Year Reach
industry careers and create sparks of
excitement about building electrical circuits,
wind and water turbines, and transforming
energy from one source to another.
Curriculum ideas and classroom
activities targeting Nebraska’s standards in
science, technology, engineering and math
are available at learn.nppd.com.
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13
Southeast Community
College’s Energy Generation
Operations program gives
students the skills needed
to become power plant
operators. Photo credit:
Southeast Community
College.
Extracurricular activities such as the
Power Drive electric car competition and the
VEX Robotics design competition advanced
energy education out of the classroom and
into real life in 2013.
College connections, job experience
NPPD takes advantage of the reputable
utility line and wind technician programs
at Northeast, Metropolitan Technical and
Western Nebraska Community Colleges
when hiring many of our technicians.
We also benefit from the Energy
Generation Operations program at
Southeast Community College for power
plant operators. Students in this program
learn how to operate wind farms,
hydropower and fossil-fueled plants, nuclear
reactors or biofuels production facilities.
NPPD supplies adjunct instructors and job
shadowing experiences.
We also work with a variety of engineering
programs at in-state and regional colleges
and universities and offer internships and
co-op opportunities.
Internships are typically available in
the fields of engineering, information
technology, renewable energy and line/
substation operations. Our engineering
co-op program is open to full-time college
sophomores, juniors and seniors with a
minimum 2.5 grade point average.
NPPD has supported 107 internships and
34 co-op engineering students the past five
years.
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SUSTAINABILITY Report
Education for energy research
Developing clean, efficient, renewable
energy sources for Nebraskans has been
a rewarding partnership between NPPD
and the University of Nebraska-Lincoln
since 2006. The genesis for the partnership
was a pledge by NPPD to invest $1 million
annually for 10 years for energy research.
What emerged was the Energy Sciences
Research Center at UNL, which supports
interdisciplinary research on renewable
energy, energy efficiency, conservation,
and economic opportunity. The Energy
Center annually funds seed grants that
enable UNL faculty to conduct innovative
research to develop or enhance clean
energy technologies. The funding for project
proposals is awarded through a competitive
process.
Research projects in 2013 focused on
super capacitor applications, methane
production, algae for biofuel production,
and improving the efficiency of water use
with irrigation systems.
Research projects for 2014 include such
initiatives as improving the heat transfer
capabilities of materials through the use
of laser surface processing, improving the
competitiveness of microbial biofuels and
developing low-cost components for organic
solar cells.
The collaboration between NPPD and
UNL spurred the development of an energy
science minor at UNL. The minor involves
a comprehensive overview of energy in
society, fundamental energy principles, the
economics of energy and environmental
issues related to producing and using
energy. Any UNL student in any major
course of study can declare this minor.
As of 2013, more than 300 students
have completed courses offered as part of
the program. Another 200 graduate and
postdoctoral students have also participated
in the Center’s research.
Supervisory Skills Program, and since 2004,
579 teammates have participated in NPPD’s
Leadership Development Workshop.
Technical talent for a complex business
The technical training for more than
500 line technicians and facility operations
personnel runs parallel to the testing,
SKILLED, EDUCATED
certifications and qualifications of hundreds
PROFESSIONALS
more teammates in specific positions.
Skill building and career development
NPPD employs more than 170 operators,
opportunities are plentiful for NPPD
some of which are licensed by the NRC.
employees. From new employee orientation
They undergo stringent instruction, testing,
to pre-planning for retirement, NPPD
and annual re-qualifications necessary for
teammates can take advantage of a variety
operating a nuclear reactor. Other operators
of programs throughout their careers.
do not require a license and work at our
We have a strategic goal to develop
nuclear, fossil or hydropower plants, system
and hire 80 percent of our leaders from
control center, or in other NPPD business
within NPPD. Over the past seven years,
units.
118 employees have completed NPPD’s
Approximately 105
employees hold professional
Employees by Job Category
certifications, such as
our engineers. Other
employees are certified in
human resources, auditing,
supply chain or project
management.
We measure our
retention rates for new
employees and have
done well in engaging
our professional, exempt
positions to stay past the
five-year mark.
NPPD Full-Time Employees
Every employee is
expected to live the
corporate values of safety
first, integrity, environmental
stewardship, employees/
teamwork, customer focus,
excellence and public
service. In turn, NPPD
rewards them with pay-forperformance compensation.
SUSTAINABILITY Report
15
October
tornados
snapped
transmission
poles like twigs
outside of
Wayne.
COMMUNITY SUPPORT
Mutual aid for Nebraskans
October told a tale of two seasons in one day. As a severe
winter storm punched the northwest corner of the state, leaving
customers in Chadron without power, tornados struck the
northeast. Three of NPPD’s transmission lines were impacted,
yet it was our wholesale partner utilities of Northeast Nebraska
Public Power District and the City of Wayne, who received the
bulk of the tornados’ wrath.
NPPD crew members from 13 communities quickly responded
to help our wholesale customers restore service and rebuild
their damaged infrastructure. Providing mutual aid to each other
in times of need, sharing resources, and planning for the future
to best serve Nebraskans is what public power is all about.
NPPD answers calls for customers
NPPD’s Centralized Customer Care Center representatives
provide after-hours call answering for 24 other public power
utilities in Nebraska. It is a service we offer to meet the
needs of our residents around the clock, and it is one way we
demonstrate we are always there for our end-use customers and
those served by our public power partners.
Answering the Call
Arapahoe becomes
seventh O&M
customer
In addition to serving
81 communities at
retail and paying
annual lease payments
to them, NPPD
also has operation
and maintenance
agreements with six
other towns.
In October, NPPD
signed a five-year
agreement with the
city of Arapahoe.
Crews will report to
city officials, handle
system planning,
engineering, and
capital improvements, as well as call answering services.
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SUSTAINABILITY Report
Payments provide financial value
NPPD leases the electrical infrastructure
in 81 communities and makes annual
payments to the cities. We also pay millions
of dollars every year in the form of in-lieuof-tax payments and gross revenue tax. The
communities use the money for various
improvements and/or societal needs.
These dollars contribute significantly to a
community’s financial stability.
In 2013, cities, towns and counties
served by NPPD received approximately
$37.2 million in financial value.
Lease Payments to
Retail Communities
Payments in
Lieu of Taxes
Employees voluntarily support
community charities
As a political subdivision of the state,
NPPD cannot make a corporate pledge to
philanthropic causes with ratepayer dollars,
but our employees can. NPPD employees
voluntarily support the United Way
chapters, as well as numerous Community
Health Charity organizations, in more than
12 locations across the state. Over the past
five years, their contributions total nearly
$512,000.
Voluntary Employee Contributions
to United Way and Community Health Charities
COMMUNITY INVOLVEMENT
York hosts eighth Arbor Day celebration
Every year, NPPD holds an Arbor Day
celebration in a community we serve to
support the Tree Line USA program and
share our commitment to the environment
with elementary and middle school
students.
Held at the Dog Park in York, the 2013
celebration represented our eighth program.
Approximately 75 students participated,
including these two young men to the right.
The celebration involves community
leaders and other environmental agencies,
such as the Nebraska Forest Service,
that help us promote proper vegetation
management and safety around trees and
electrical power lines.
SUSTAINABILITY Report
17
Kearney water trails gain approval
ECONOMIC DEVELOPMENT
In August 2013, the City of Kearney and
NPPD signed a recreational use agreement
for the development of a half-mile segment
of the Kearney Hydro Canal Tailrace for
recreational water activities.
Starting in the spring of 2014, the Kearney
Whitewater Association will promote the
availability of the new water trail free of
charge for kayaking, canoeing and tubing.
We dig doing business in Nebraska
Public input: our way of doing business
In 2013, NPPD held public meetings with
customers on more than 50 occasions.
The Board of Directors’ regular monthly
meetings were enhanced by 11 special
forums held with customers
throughout the state.
At least 16 regularly scheduled
and special sessions were held
to discuss rates, power resources
and contracts with our wholesale
customers, and we hosted
more than 20 open houses,
public hearings and meetings to
collect our customers’ input on
transmission line routes, rates and
our integrated resource plan.
In May 2013, Agrex, Inc.,
a full-service agricultural
commodity trading
company and a major
exporter of U.S. feed
grains, broke ground on a
2.6 million bushel loading
facility at Laurel, Neb.
Centrally located and
ideal for food processors,
Nebraska is a great place
for businesses. NPPD’s
targeted studies, like this
one, give communities
a calling card when
recruiting businesses to the
state.
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SUSTAINABILITY Report
When you deliver wholesale and retail
power to approximately 400 communities
and 600,000 Nebraskans, you are a partner
in the state’s future. That’s why we support
our communities in their goals to retain,
recruit, and expand business so they can
continue to provide a high quality of life for
current and future residents.
NPPD’s Economic Development team
assists both communities and businesses
with retention and expansion, research and
studies, strategic planning sessions and
other business outreach activities. In the
last two years alone, we have provided at
least:
• 40 strategic planning sessions and
multiple training opportunities for
community, chamber, and economic
development representatives;
• 50 trend reports and impact or labor
studies for publication;
• 150 businesses with retention and
expansion interviews; and
• 150 communities with support or
development of their web presence.
During this same time period, NPPD
assisted in such projects as the relocation
of Omaha Steel to Wahoo, the recruitment
of Central American Foods to Columbus,
Agrex, Inc. and Laurel BioComposites to
Laurel, and the new call center of xtDirect,
LLC to Beemer.
This rate, which is subject to change, is
available for the first five years of service for
new companies or existing companies with
additional load of at least 10 megawatts,
with a 75 percent monthly load factor, and
receiving incentives under the Nebraska
Advantage Act.
The latter half of 2013 was also colorful
for renewable energy advocates. In
November, NPPD’s retail customers were
given the opportunity to be a little more
“green” when the Board of Directors
approved NPPD’s Green Club program and
green rate.
NPPD’s end-use customers can invest
in renewable energy by purchasing blocks
of green energy representing 100 kilowatthours (kWh) of electricity above what they
are billed under their regular base rate.
The surcharge is NPPD’s additional cost to
generate green energy.
Growing Nebraska via GROW Nebraska
A unit of 100 kWh was available in 2013
Seventy-four Nebraska communities are
at $1.80 (plus sales tax and bill adjustments
home to 350 member-businesses of GROW
as applicable) per
Nebraska, a nonblock. That unit
profit organization
charge is subject to
focused on creating
NPPD offers “green”
change on a yearly
sustainable economic
rates to wholesale
basis, with the
development
utility partners and
new rate typically
and supporting
end-use
customers.
being determined
entrepreneurs and
in the November
small businesses
timeframe. Retail
throughout the state.
customers
can
purchase
as many blocks of
In total, these businesses provide
green energy as they desire.
1,600 full-time and 1,400 part-time jobs.
The retail program complements
Approximately 63 percent of these sell
NPPD’s wholesale green energy program,
their products out of state and more
established in 2012. The latter allows
than 21 percent sell their commodities
wholesale utilities to purchase 1,000 kWh
internationally.
blocks of green energy from NPPD, with a
NPPD is a member and holds a seat on
commitment of purchasing for one year.
GROW Nebraska’s advisory board.
On behalf of the customer making the
Economic, Green rates approved
purchase, NPPD retires the renewable
In the fall, NPPD’s Board approved a
energy credits generated by its renewable
cost decrease in the wholesale economic
energy facility(ies).
development incentive rate to 2.4 cents.
SUSTAINABILITY Report
19
GreenSchools™ empowers students
Close scrutiny of
issues and research
possibilities has always
been part of NPPD’s
culture. Like the
texture of a turbine
spoke up close, we like
details.
PARTNERSHIPS AND
COLLABORATION
Partnering with others is an important
aspect of being a public power utility. And
in this all public power state, we will be
among the first to roll up our sleeves, find
a solution, or address a crisis in order to
enhance the quality of life for others.
Proceeds promote education
Scholarship recipients
Lucas Gruber from
Northeast Community
College and Carrie
Taulbee from Central
Community College
are pictured here with
local TV personality
John Knicely at the 2013
Nebraska Open golf
tournament.
The Nebraska Open and its Pro-Am event
has raised $1.1 million in scholarship money
awarded to 11 community college campuses
in NPPD’s service territory since it began
in 1991. In 2013, the Nebraska Community
College Foundation received a record
$80,000 to use for student scholarships.
The tournament brings business leaders,
professional athletes, and educational
representatives together for a good cause.
NPPD coordinates the event which is
endorsed and administered by the Nebraska
Section of the PGA and the Nebraska Golf
Association. The tournament will be one of
Nebraska’s largest golf events in 2014.
In the fall, the Nebraska Department
of Environmental Quality (NDEQ)
partnered with NPPD for the state’s first
GreenSchools™ workshops in Kearney, with
others scheduled in Norfolk, Auburn and
Ogallala next year.
GreenSchools™ is
for K-12 students
who want to
take personal
responsibility for
improving the
environmental
quality of one’s
school, home and
community.
The program consists of five, studentled investigations carried out in the
school setting, but applicable to home
environments. Students use diagnostic
tools to assess energy usage in their school,
which serves as a learning lab. The program
improves students’ academic performance
in STEM (science, technology, engineering
and math) and uses action plans to reduce
energy usage, increase energy efficiency
and improve environmental quality.
Project SHINE pumps up teachers
For the fourth year in a row, NPPD
participated in Project SHINE (Shaping
Highly Integrated Nebraska Education),
a two-week, hands-on program for
teachers. Grant-funded by the National
Science Foundation and hosted by Central
Community College in Columbus, the
program provides high school and middle
school teachers opportunities to see how
the subjects they teach are applied by
workers in business and industry. Teachers
develop lesson plans and share them online
with each other.
20
SUSTAINABILITY Report
NPPD participates in electric car study,
remains dedicated to storage research
NPPD is completing a two-year
demonstration study to learn how electric
cars will perform on real roads. Participants
include General Motors, the Electric Power
Research Institute and 49 other electric
utilities across the U.S. and Canada.
We also continue to evaluate various
generation and storage options, such
as a potential compressed air energy
storage project in western Nebraska.
While currently on hold due to cost
constraints, NPPD still believes the
geological composition of a former natural
gas production and storage site has the
potential to be a future resource, when time
and economics are right.
Public power booth wins honors
For the third year in a row, public power
was invited to be a partner at the Nebraska
State Fair. Nearly 335,000 people attended
the 11-day event, and more than 150
volunteers representing 21 NPA electric
member utilities promoted the booth’s
interactive displays and activities.
This year’s theme was “The Public
In Public Power,” and video and poster
testimonials from Nebraskans throughout
the state promoted the benefits of local
control and reliable customer service at
not-for-profit rates. The public power booth
won “Outstanding Outdoor Exhibitor.”
The Scott family
below represents
three generations
of public power,
as employees of
Gerald Gentleman
Station.
NPPD participates in Nebraska’s water
funding task force
The Nebraska Legislature established
a Water Funding Task Force in 2013, and
two NPPD employees served on the team.
Water is critical to NPPD’s operations and is
an important natural resource for all users.
At year-end, the Task Force recommended
an annual budget of $50 million for
water projects starting in 2015 to ensure
the sustainability of Nebraska’s water
resources for future generations. The
group also recommended 2014 funding
for existing projects, a governing board
structure, and evaluation criteria for use in
determining projects to be funded. In its
2014 session, the Legislature will decide
whether to implement the Task Force’s
recommendations.
PUTTING THE “PUBLIC” IN
PUBLIC POWER
One of the best partnerships NPPD has
is our membership in the Nebraska Power
Association. The entity represents every
public power utility in the state.
SUSTAINABILITY Report
21
Environmental
Stewardship
Baghouses at Sheldon Station
are made up of wire frames
inside cloth vacuum bags that
remove particulate matter from
the exhaust stacks before it
leaves the stacks.
22
SUSTAINABILITY Report
Reduce our environmental
footprint
We live here, too
Power Summit attracts record number
Protecting the state’s environment while
meeting the energy needs of its citizens go
hand in hand for NPPD.
Our robust Environmental Management
Plan encompasses a broad mix of programs
for protecting and preserving the state’s
natural resources.
Using leading industry principles we
manage everything from air emissions to
waste. Consideration of the environment
is incorporated in every proposed
transmission line and equipment upgrade,
yet the most tangible example of our
commitment is a generation portfolio that
was more than 40 percent carbon-free in
2013.
One high point of the NDEQ/NPPD
partnership is the annual Power Summit
which brings together power industry peers
and representatives from several regulatory
agencies to discuss environmental
regulations and their effects on power
production and other Nebraska issues.
This year, a record number of
84 participants attended the summit to
learn about the NDEQ’s evaluation of the
Keystone XL Pipeline; South Platte River
flooding and water quality; an update from
the Legislative Water Funding Task Force;
the Nebraska
Center for
NPPD’s Generation Resources - 2013
(Total Resources)
Energy Sciences
Hydro
Wind
Research,
2.5%
4.6%
Power
sponsored by
Purchases
5.5%*
NPPD and UNL;
and NPPD’s
Carbon Capture
Nuclear
Coal
Pilot Project,
30.0%
56.6%
which seeks
*
a potential
commercial
solution for
Natural
Gas/Oil
reducing
0.8%
greenhouse gas
* Purchases = 4.3% WAPA @ 795 Gwh
1.2% Others @ 212 Gwh
emissions from
coal-fired power
NPPD’s carbon-free
plants (see p. 24).
generation was more
than 40 percent in 2013,
NPPD, the NDEQ, USDA Rural
which is double the
Development, and the Nebraska Energy
20 percent recorded
by neighboring states
Office also met to discuss a shared interest
and at least 10 percent
in potential methane recovery projects from
better than the state
and national averages.
livestock operations.
Environmental partnerships
NPPD and the NDEQ work together to
achieve a sustainable Nebraska.
Both organizations devote significant
manpower to maintaining the state’s
precious environmental resources, and our
partnership is reflected in decisions that
meet Nebraskans’ needs.
Each year, the NDEQ and NPPD, the
regulator and the regulated, tackle
traditional and emerging issues like regional
haze, mercury, carbon sequestration, and
water policies. We also collaborate on
annual events, such as Elkhorn Water Daze,
which, in 2013, attracted 438 fifth grade
students from northeast Nebraska and the
annual, Recycle Your Cycles event, hosted
by the Keep Scottsbluff/Gering Beautiful
organization.
The Spencer
Hydropower Plant
uses water from
the Niobrara
River to generate
3 megawatts of
renewable electricty.
42%
CARBONFREE
SUSTAINABILITY Report
23
GOOD GREENHOUSE
NEIGHBOR
Nuclear benefits the state
Sitting quietly in the southeast corner
of the state is Cooper Nuclear Station, a
single unit, nuclear power plant capable of
generating 810 MWs of reliable, emissionfree electricity for Nebraskans.
Over the years, NPPD has invested
hundreds of millions of dollars to improve
the facility’s operations, knowing it provides
approximately 30 percent of NPPD’s power
and is our greatest contributor from a lowcarbon footprint standpoint.
The year 2013 represented Cooper’s
best year in its 40-year lifespan. We set a
new generation record of 6,804,022 MWh
of electricity - 10,000 MWh more than
Cooper’s previous record - and recorded our
highest performance indicator numbers, as
measured by other nuclear industry groups.
We are reducing emissions
Wind turbine towers are
typically seen standing
vertically along a horizon.
Here is a glimpse at one
from the inside, laying flat.
24
approximately 65 percent on Unit 1 and 55
percent on Unit 2; and
•over-fire air systems on Sheldon’s
Unit 2, reducing NOx emissions by
approximately 70 percent.
In 2013, we installed an over-fire air
system on Sheldon’s Unit 1, which is
expected to reduce NOx emissions at least
50 percent, once final tuning is complete.
These investments are expected to result
in an annual reduction of approximately
19,000 tons of NOx.
In 2014, NPPD will begin installing systems
to control mercury emissions at both
stations. These systems, in combination
with the baghouses, will reduce our
mercury emissions by more than 90
percent.
Piloting carbon capture
In October, GGS began participating
in a $20 million demonstration project
funded, in part, by the U.S. Department
of Energy. Working with ION Engineering,
NPPD uses low-sulfur Powder River Basin
coal at both Gerald Gentleman
Station and Sheldon Station.
Nebraska Public Power District
This low-sulfur fuel emits
Wind Generation Resources to Date
sulfur dioxide (SO2) at
approximately 50 percent of
GGS’s permitted emission rate
and 75 percent of Sheldon’s.
NPPD has also initiated
several projects to reduce
the nitrogen oxides (NOx) and
particulate matter (PM) of
these generation assets. Over
the years, we have installed:
• high-efficiency baghouses
on both power plants,
removing approximately
99.4 percent of PM from the
Becton Dickinson will purchase 30 megawatts of renewable energy
flue gas;
credits from Steele Flats for 20 years.
• low-NOx burners on both
Broken Bow II is expected to come online in 2014.
GGS units, reducing emissions
SUSTAINABILITY Report
Inc., of Boulder, Colo., and the University
of Alabama Department of Chemical and
Biological Engineering, NPPD will test ION’s
unique technology for capturing carbon
dioxide emissions.
The project is a product of the
Partnership for CO2 Capture Program
and will be conducted in three phases
(site prep/design; construction; testing/
deconstruction) with each phase lasting
approximately 15 months.
NPPD volunteered for the project because
our fossil generation resources bring
significant value to our customers, and we
want technologies that capture CO2 in a
cost-effective manner. NPPD worked with the NDEQ to secure
the permits needed for the pilot, and
will provide engineering, construction,
operations, maintenance, safety, and
security oversight for the project which
should conclude June 30, 2017.
By the end of 2014,
NPPD will be within 22
MWs of its strategic
goal to produce
10 percent of its
generation with new,
renewable resources by
2020.
NPPD is achieving
this goal by owning and
operating the Ainsworth
facility, signing power
purchase agreements
with private developers
for the other amounts,
and sharing the output
with other public power
utilities to benefit all
Nebraskans.
Solar panels for
irrigation
The state’s first commercial, solarpowered center pivot irrigation project
Eight wind farms in our portfolio
is up and running near Lindsay. Used to
By the end of 2013, NPPD’s generation
help pump water and propel the center
mix included 282 MWs of wind generation
pivots for a large family farm owned by
available for production from seven
brothers Terry and Mike
Nebraska-based wind
Beller, the 25-kilowatt
farms.
NPPD
has
been
photovoltaic array is
NPPD has been
adding
wind
forecasted to generate
adding wind
40,000 kilowatt-hours
generation to its
generation to its mix
per year or 109 kWh per
for more than 15
portfolio for more
day on average.
years.
than 15 years.
Loup River Public
The most recent
Power District and
wind generation was
NPPD supported the installation in early
added in November when the Steele Flats
2013. A $17,000 USDA Rural Energy for
wind farm in southeast Nebraska began
America Program grant, as well as financial
commercial operation.
assistance from the Lindsay Corporation,
The Steele Flats project is also unique
a worldwide supplier of center pivot and
in that Becton Dickinson and Company, a
lateral irrigation systems, funded the effort.
leading global medical technology company
The project is expected to pay for itself in
based in Nebraska, will purchase 30 MWs of
approximately seven years.
renewable energy credits from the site for
20 years.
Third-generation farmers,
Terry and Mike Beller,
installed a 139-foot,
25-kilowatt photovoltaic
panel to power their
irrigation system. When
excess energy is generated,
it is net-metered back to
Loup River Public Power
District, one of NPPD’s
wholesale utility partners
in Columbus.
SUSTAINABILITY Report
25
According to the NGPC,
the Sutherland Reservoir
next to Gerald Gentleman
Station saw an average
of 37,500 visitors per year
between 2009 and 2013.
The numbers - collected
via car counts, camping
registrations, and daily park
pass sales - change, based
on weather conditions.
For decades, the Platte
River has been the fuel
behind our hydropower
generation facilities in
central Nebraska. In
addition, Lake McConaughy
stores 125,000 acre-feet
of water NPPD supplies to
irrigation canals. As with
any renewable resource,
we are subject to water’s
availability.
WATER AVAILABILITY
NPPD uses Platte River water to produce
electricity at Gerald Gentleman Station—
NPPD’s largest generating facility—and
nearly all of it is returned to the river
system—not consumed. In fact, less than
one percent of the water passed through
the plant’s once-through cooling system is
lost to evaporation.
Our hydropower facilities are similar,
using the resource before sending it on
its way to serve other needs such as
recreation, community water systems,
agriculture, and wildlife.
We researched the use of water
Could we increase the amount of power
produced with Nebraska’s water resources?
To answer this question, NPPD conducted
a statewide assessment in 2013 to identify
potential sources for traditional hydro
generation and evaluate the potential of
conduit, low-head or hydrokinetic options.
Lake McConaughy Elevation
1941 to Present
Enhancements to existing hydros were also
considered, as was the ability to integrate
hydro with wind energy production.
The study’s results revealed limited
opportunities for efficiencies at the North
Platte, Kingsley, Monroe and Columbus
hydropower facilities, and no opportunities
were identified to integrate hydro and
wind together. New technologies, such as
hydrokinetics, also did not show promise
due to a lack of depth and velocity in
Nebraska’s canals and rivers.
Four sites were identified as having
suitable topography for pumped storage,
but they were small, had operational
hurdles, and needed additional assessment.
Ten sites were identified for new
hydropower facilities, with the potential of
generating 31 MWs of capacity in total.
The study was funded by NPPD’s Domestic
Energy Research and Application Initiative,
a program established in 2005 to learn how
domestic energy resources can be used in a
clean, low-cost way.
We monitor and use our wells wisely
Balanced use of Nebraska’s surface
and groundwater resources involves a
variety of stakeholders, from irrigators to
municipalities, recreationalists to power
producers.
NPPD has 27 wells available for the
purpose of supplying cooling water for
GGS in the case of extreme drought or
prolonged high-temperature conditions.
For environmental reasons, we ensure the
26
SUSTAINABILITY Report
small municipal wastewater
water discharged from the plant back into
treatment facilities, which
the system does not exceed 94 degrees.
typically devote 20-60
NPPD monitors and models the
percent of their budgets to
groundwater levels at and around the plant.
energy costs.
We also work with a group called the GGS
With Region VII of the
Landowner Committee, because we know
Environmental
Protection
water for their crops is as important to them
Agency and the University
as electricity is to our customers.
of Nebraska’s Partners
Sheldon Station’s underground wells
in Pollution Prevention
supply water to the facility and cooling
Internship Program, the
towers dissipate the waste heat from the
team performs energy
turbines. The plant’s state-of-the-art drain
efficiency
piping system and
assessments
pond treatment
NPPD
is
at selected
facilities condition
conservative in
wastewater
the water and ensure
how we monitor,
treatment
its quality before
facilities to identify ways to
manage, and
discharging it into the
prioritize their investments
Big Blue River nearby.
use our water
to save energy and money.
At Cooper, we
resources.
In 2013, the communities
installed seven
of Scribner and Snyder were
new, groundwater
recipients
of
the
assessments. Ten Nebraska
monitoring wells on the east side of the
communities have benefitted from the
plant in 2013 to improve our monitoring
program since its start in 2010.
capabilities of radioactive isotopes,
including those that occur naturally.
Water quality sampling
In all well uses, NPPD is conservative in
The NDEQ ensures Nebraska’s lakes are
how it monitors, manages and uses the
ready for public use.
water resources needed to produce power.
In 2013, NPPD assisted the NDEQ by
collecting, testing and submitting water
WATER QUALITY
samples from Lake North, a recreational
Wastewater treatment audits increase
facility outside of Columbus, managed by
As part of its Partnership Agreement,
Loup River Public Power District.
NPPD and the NDEQ established a program
Regular collection and
testing of Nebraska’s
waterways help ensure
our recreational facilities
are safe for the public to
enjoy, and our power plant
operations are efficient and
compliant.
to assess how energy use can be reduced at
SUSTAINABILITY Report
27
Whether it’s a fish salvage
during canal maintenance,
like above, or preparations
for 316(b), an EPA
regulation related to the
Clean Water Act, NPPD
considers the impact of
our operations on fish and
aquatic life. In 2014, once
the final regulations on
316(b) are released, NPPD
will evaluate what studies
are needed and identify
our compliance options
regarding equipment,
operations and timelines.
28
Schramm Bluffs near Louisville next to the
Missouri River.
The financial amount was based upon
Cooper’s operational use of the Missouri
River and was supported by the U.S. Fish
and Wildlife Service (USFWS) and the NGPC.
The Nebraska Land Trust will oversee use of
the funds to ensure the area’s conservation.
The easement is part of an agreement
with local property owners who want to
conserve the land, protect its historic values
and benefit the endangered pallid sturgeon
that inhabit the area.
The easement includes river banks,
sand bars, chinquapin oaks, black oaks
and other tree species. Woodlands on the
property are a forest oasis for nesting and
migratory songbirds, hence its designation
as an important bird area by the National
Audubon Society.
Choosing the right place for power lines
Nebraska is a popular haven for hundreds
of thousands of migratory birds passing
NPPD coordinates with educational and
north and south throughout the year. So,
environmental entities to protect Nebraska’s
when siting a transmission line, NPPD
wildlife resources, whether fish, fowl or
follows standards established by the Avian
other friendly creatures.
Power Line Interaction Committee, a leader
for the electric utility industry in protecting
Preserving the trout population
avian species while enhancing reliable
NPPD annually studies the water flows
energy delivery.
in the North Platte River immediately
We identify wetland
below our Keystone
areas, and our
Diversion Dam to
Sutherland
Environmental staff
assess the water
Reservoir
attracts
walk and survey the
flows needed by
corridors where the
as many as 50,000
the rainbow trout
lines could be located
birds each year.
population in this
to identify areas
segment of the river.
expected to reduce bird
mortalities.
Protecting the pallid sturgeon
For example, the Sutherland Reservoir
In July, as part of the license renewal
attracts as many as 50,000 birds of varying
agreement for Cooper Nuclear Station,
species annually.
NPPD paid $250,000 for a perpetual
In 2013, NPPD needed to move a
conservation easement along 262 acres of
HABITAT & BIODIVERSITY
SUSTAINABILITY Report
transmission line away from one of GGS’s
ponds used to support the station’s
operational permits.
The initial move was expected to cost
approximately $1.8 million. Knowing this,
we reassessed our options and, following
our environmental stewardship principles,
paid an additional $1 million to move the
line to a location that reduced the risk of
bird interaction.
Providing home and habitat
NPPD is focused on reducing potential
impacts our water use may have on
threatened or endangered species that
claim the Platte River Basin as their home.
NPPD manages six sites (three river
islands and three sandpits) specifically for
least tern and piping plover nesting.
While the USFWS recently determined
least terns should be removed from the
endangered species list, NPPD plans to
continue managing the sandpits and islands.
The birds also benefit from NPPD’s
management of 2,650 acres of land we own
and manage along the Platte River. The
property serves as habitat for whooping
cranes, terns and plovers, and other
migratory birds. It also supports the
Platte River Recovery Implementation
Program’s goal to protect, restore and
maintain 10,000 acres of habitat.
NPPD and the NDEQ
participate on the
Nebraska Invasive
Species Council. NPPD
also works with the
Nebraska Game and
Parks Commission to
control the introduction
of invasive species in the
state’s waterways.
Studying impacts to grouse habitats
In the spring of 2013, academic
researchers began a two-year field study
at NPPD’s Ainsworth Wind Energy Facility
to determine if there were any potential
wind turbine and infrastructure effects
on habitat used by grouse during the
breeding season.
The study is a joint effort between
NPPD, NGPC, UNL, University of
Nebraska-Omaha, Creighton University,
and Boys Town National Research
Hospital.
The results, expected in 2015, will help
utilities, investors, planners and policy
makers identify locations for future wind
energy projects.
A least tern lifts its wings
to take flight.
Least Tern Fledglings
SUSTAINABILITY Report
29
Power line insulators lay lifeless after a thunderstorm. While we can do little to stop
Mother Nature, our asset management plan covering refurbishments, replacements
and/or additions to our distribution and high-voltage transmission system helps us
prepare and respond to her visits. Since 2004, we have invested nearly $800 million in
our transmission and distribution infrastructure.
WASTE MANAGEMENT
Ash disposal, market and compliance
We manage NPPD’s ash landfills
according to an operational plan specific
to each ash landfill.
The plans address the type of waste
in the landfill, along with various factors
such as groundwater monitoring,
leachate collection, security, hours of
operation, fugitive dust control, bank
erosion, weed/tree control, emergency
response, transportation and salvage
operations.
NPPD markets its coal ash (fly and
bottom ash), to reduce the amount
disposed of in the landfill.
Coal ash is used for roadbed
construction, slurry
fills, etc., which
NPPD markets
are all approved
its coal ash
by the NDEQ. The
which is often
commodity enhances
used for roadbed
recycling, waste
construction.
reduction, and adds
years to the life span
of the ash disposal
area, saving NPPD and
our customers money. Recycling ash is a
benefit to the environment.
The NDEQ inspects Sheldon and GGS’s
ash disposal areas every three months
to ensure NPPD is operating according to
our permit.
30
SUSTAINABILITY Report
Used nuclear fuel is managed, too
NPPD has constructed a used fuel
storage facility at Cooper due to the federal
government’s inability to complete the
national nuclear waste repository at Yucca
Mountain, Nev.
The first round of construction resulted
in eight horizontal storage modules, each
housing a canister containing 61 assemblies
of used nuclear fuel.
In 2013, to accommodate additional
used fuel, another 22 storage units were
constructed. Ten of these modules will be
filled over the spring and summer of 2014,
with the final 12 scheduled for loading in
2017.
Additional storage modules will be
constructed to house Cooper’s future used
fuel.
Our Green Team promotes three Rs;
investment recovery returns dollars
There are more than two dozen
members of NPPD’s “Green Team” at NPPD
locations throughout the state cultivating
NPPD’s corporate philosophy of pollution
prevention.
NPPD’s recycling results reflect the size
of each facility and its local workforce, the
materials used, and what recycling options
are available.
A variety of materials are targeted
and tracked each year, with hundreds of
thousands of pounds—even tons—recycled.
Stewardship comes with costs, however.
Time and labor are required, yet NPPD
wants to be a company engaged in doing
the right thing for the environment.
Our philosophy is three-fold and based
upon the three Rs – Reduce, Reuse, Recycle:
first, we don’t produce or generate waste,
if we don’t have to. Second, we minimize
the waste we do produce. Third, we look for
ways to recycle materials. When outside
recycling or disposal services are required,
we use reputed vendors with strong
track records of audited compliance and
experience in handling our waste streams.
In addition to our Green Team, two
individuals work full-time as investment
recovery coordinators, responsible for
identifying and eliminating outdated and
obsolete materials, while also collecting
items for resale or scrap. In 2013, NPPD’s
investment recovery efforts resulted in a
return of $1,672,012.
generates and delivers reliable, low-cost,
sustainable energy and provides outstanding
customer service. Every day and always.
It’s how we enhance the quality of life and
deliver on our promise to be “Always there
when you need us.”
NPPD Facility 2013 Recycling Results
Proving our sustainability every day
NPPD’s sustainability is more than our
dedication to the environment. It is also
our economic stability and our service to
society. As we define it, sustainability is a
practice that balances the environmental,
economic and societal needs of this state.
Investments in renewable energy and
the respectful management of our natural
resources, as well as the promotion of
energy efficiency are ways we demonstrate
our environmental stewardship.
By controlling costs, reducing waste, and
ensuring the reliable delivery of power, we
will meet our fiscal responsibility to keeping
rates low, even as this industry changes.
We know the regulations, infrastructure
investments, and a new integrated energy
market are all paid by our customers.
And interwoven between these
environmental and financial obligations is a
workforce dedicated to serving the public their friends and neighbors.
Nebraska is our home. We exist to serve
our customers, the public, and society,
and we work hard to ensure NPPD safely
This 40,000-pound transformer core of copper was sold on
auction. NPPD not only increases the equipment reliability
with upgrades and replacements, we sell what is not
needed and apply the revenues toward our operations,
reducing costs for customers. This transformer core
returned $18,000 to our Investment Recovery Program.
SUSTAINABILITY Report
31
NPPD BOARD OF DIRECTORS
Back row: (L to R) Ken Kunze, York; Thomas Hoff, Broken Bow; Fred Christensen, Lyons; Ed Schrock, Holdrege/Elm Creek
Middle row: Dennis Rasmussen, Hickman; Mary Harding, Roca; Virgil Froehlich, Norfolk
Front row: Gary Thompson, Beatrice; Ron Larsen, Kearney; Larry Linstrom, North Platte; Jerry Chlopek, Columbus
2013 SENIOR
MANAGEMENT
TEAM
Traci Bender
Vice President,
Chief Financial Officer
& Treasurer
Ken Curry
Vice President,
Customer Services
Tom Kent
Vice President &
Chief Operating Officer
Pat Pope
President &
Chief Executive Officer
Oscar Limpias
Vice President &
Chief Nuclear Officer
32
SUSTAINABILITY Report
John McClure
Vice President,
Governmental Affairs &
General Counsel
Roy Steiner
Vice President,
Human Resources &
Corporate Support
FinancialReport
2013
NEBRASKA PUBLIC POWER DISTRICT
Statistical Review 1
Management’s Discussion and Analysis 2
Statistical Review 1
Report of Independent Auditors 14
Management’s Discussion and Analysis 2
Financial Statements 15
Report of Independent Auditors 14
Notes to Financial Statements 19
Financial Statements 15
Notes to Financial Statements 19
2 0 1 3
Y E AYEAR
R A T
G L A N C E
2013
AT AA GLANCE
2013 YEAR AT A GLANCE
KILOWATT-HOUR SALES
OPERATING REVENUES
KILOWATT-HOUR SALES
COST OF POWER PURCHASED AND GENERATED
OPERATING REVENUES
OTHER OPERATING EXPENSES
COST OF POWER PURCHASED AND GENERATED
INCREASE IN NET POSITION
OTHER OPERATING EXPENSES
DEBT SERVICE COVERAGE
INCREASE IN NET POSITION
DEBT SERVICE COVERAGE
20.8 BILLION
1,106.3 MILLION
20.8 BILLION
614.1 MILLION
1,106.3 MILLION
327.8 MILLION
614.1 MILLION
97.4 MILLION
327.8 MILLION
1.73
97.4 MILLION
1.73
2013 STATISTICAL REVIEW
Average
Number of
Customers
SALES
Retail:
Residential
Rural and Farm
Commercial
Industrial
Public Lighting
Municipal Power
Miscellaneous Municipal
Total Retail Sales
68,775
3,159
15,223
57
194
184
2,012
89,604
829,141
80,490
916,107
1,238,762
18,990
29,053
140,779
3,253,322
Wholesale:
51 Municipalities (Total Requirements)
25 Public Power Districts and Cooperatives
(Total Requirements)
Total Wholesale Sales
(Excluding Sales to LES and Other Utilities)
Total Retail and Wholesale Sales
(Excluding Sales to LES and Other Utilities)
Nonfirm Sales
LES(1)
Other Utilities
Total Electric Energy Sales
Other Operating Revenues (Net of Deferred)
4.0 $ 103,674
0.4
9,278
4.4
91,039
5.9
74,155
0.1
3,184
0.1
2,830
0.7
10,079
15.6
294,239
(2)
12.50¢
11.53¢
9.94¢
5.99¢
16.77¢
9.74¢
7.16¢
9.04¢
118,393
10.7
6.13¢
7,955,005
38.2
465,692
42.1
5.85¢
9,887,273
47.5
584,085
52.8
5.91¢
878,324
79.4
116,890
10.6
37,631
3.4
74,430
6.7
1,107,275 100.1
(984)
(0.1)
6.68¢
2.58¢
3.10¢
3.82¢
5.32¢
$ 1,106,291
MWh
Amount
Production (Including Interchange)(2)
Power Purchased
Total Power Produced and Purchased
9.4
0.8
8.2
6.7
0.3
0.3
0.9
26.6
9.3
13,140,595
63.1
4,526,320
21.7
1,215,129
5.8
1,948,050
9.4
20,830,094 100.0
GENERATION
Revenue
Per kWh
1,932,268
Total Operating Revenues
(1)
Revenues from
Electric Sales
(000’s)
Amount
%
Electric Energy
MWh Sales
Amount
%
18,044,219
3,625,967
21,670,186
%
100.0
Production Costs
(000’s)
Amount
%
83.3 $ 465,064
16.7
148,986
100.0 $ 614,050
75.7
24.3
100.0
Sales to Lincoln Electric System (“LES”) include power and energy produced at Nebraska Public Power District’s Gerald Gentleman
Station and Sheldon Station.
Costs include only fuel, operation, and maintenance costs. Debt service and capital related costs are excluded.
Miles of Transmission and Subtransmission Line in Service
Number of Employees (Filled Full-Time and Part-Time Positions)
2013 Contractual and Tax Payments (000’s):
Payments to Retail Communities
Payments in Lieu of Taxes
5,188
2,076
$ 27,092
$ 10,130
SOURCES OF ENERGY - 2013
For service to retail and total
requirements wholesale customers,
and nonfirm sales (excludes sales to
LES and Other Utilities).
1
1
Nebraska Public Power District
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following Management’s Discussion and Analysis should be read in conjunction with the audited Financial
Statements and Notes to Financial Statements beginning on page 15.
OVERVIEW OF BUSINESS
Nebraska Public Power District (the “District”) operates an integrated electric utility system including facilities for
generation, transmission, and distribution of electric power and energy for sales to wholesale and retail
customers. The District is a summer peaking utility. An all-time system summer peak demand of 3,030 MW was
established in July 2012 for the District’s firm requirements customers. The District’s all-time winter peak demand
is 2,219 MW, which was established in December 2009. The District owns or has operating control over
30 generating plants, which had a combined accredited capacity during the summer of 2013 of 3,073.7 MW.
GENERATION PLANTS
Summer 2013
Number of
Accredited
Percent of
Plants(1)
Capability (MW)
Total
Type:
Coal - Gerald Gentleman Station
Coal - Sheldon Station
Gas - Beatrice Power Station
Gas/Oil - Canaday Station
Nuclear - Cooper Nuclear Station
Hydro
Diesel
Combustion Turbine
Wind
(1)
1
1
1
1
1
9
12
3
1
30
1,365.0
225.0
217.0
115.0
766.0
164.5
93.7
127.5
0.0
3,073.7
44.4
7.3
7.1
3.7
24.9
5.4
3.0
4.2
0.0
100.0
Includes six hydro plants and 12 diesel plants under contract to the District.
In addition to the above generating plants, the District purchases 447.8 MW of firm power from the Western Area
Power Administration and other energy on both a short-term and nonfirm basis in the wholesale energy market.
The District had other capacity purchases of 162.6 MW from Omaha Public Power District’s (“OPPD”) Nebraska
City Station Unit 2 (“NC2”) coal-fired plant. Of the total capacity resources, 371.7 MW are being sold via
participation sales or other capacity sales agreements. The District owns and operates 5,188 miles of
transmission and subtransmission lines, encompassing the entire State of Nebraska.
The District’s customer base for firm energy sales consists of approximately 89,604 retail customers plus
76 municipalities, public power districts, and cooperatives that are total requirements wholesale customers of the
District. In addition, the District has several participation sale contracts in place with other utilities for the sale of
power and energy at wholesale from specific generating plants. The District also sells energy on a nonfirm basis
in the wholesale energy market.
Nebraska Public Power District
22
CONDENSED BALANCE SHEETS
2013
2012
2011
Condensed Balance Sheets (000’s):
Current Assets
Special Purpose Funds
Utility Plant, net
Other Long-Term Assets
Deferred Outflows of Resources
Total Assets and Deferred Outflows
$
665,854
688,220
2,500,069
795,792
16,504
$ 4,666,439
$
608,912
744,982
2,513,511
729,867
18,066
$ 4,615,338
$
Current Liabilities
Long-Term Debt
Other Long-Term Liabilities
Deferred Inflows of Resources
Net Position
Total Liabilities, Deferred Inflows, and Net Position
$
$
$
352,229
1,845,244
1,109,567
180,637
1,178,762
$ 4,666,439
386,256
1,972,951
1,053,502
121,250
1,081,379
$ 4,615,338
567,237
790,264
2,402,025
706,816
7,091
$ 4,473,433
270,795
2,063,901
995,224
137,178
1,006,335
$ 4,473,433
CONDENSED RESULTS OF OPERATIONS
2013
Condensed Statements of Revenues, Expenses, and Changes in Net Position (000’s):
Operating Revenues
Operating Expenses
Operating Income
Investment and Other Income
Debt and Other Expenses
Increase in Net Position
2012
2011
$ 1,106,291
(941,887)
164,404
15,221
(82,242)
$
97,383
$ 1,080,998
(947,766)
133,232
31,112
(89,300)
$
75,044
$ 998,691
(902,523)
96,168
42,622
(93,053)
$ 45,737
2013
$ 878,324
37,631
191,320
59,162
(60,146)
$ 1,106,291
2012
$ 835,956
34,673
136,599
49,216
24,554
$ 1,080,998
2011
$ 755,984
33,633
183,759
40,811
(15,496)
$ 998,691
The sources of operating revenues were as follows (000’s):
Firm Sales - Wholesale and Retail
Participation Sales to LES
Sales to Other Utilities
Other Operating Revenue
Unearned Revenue
Total Operating Revenue
3
3
Nebraska Public Power District
Revenues from Firm Sales - Wholesale and Retail
Revenues from firm sales increased $42.3 million, or 5.1%, from $836.0 million in 2012 to $878.3 million in 2013.
This increase is due primarily to 3.75% wholesale and retail rate increases effective January 1, 2013, as a result
of increases in debt payments, current capital expenditures, and increases in operating costs. An additional
increase is due to a 1.2% increase in kilowatt-hour energy sales to retail customers. Revenues from firm sales
increased $80.0 million, or 10.6%, from $756.0 million in 2011 to $836.0 million in 2012. This increase is due
primarily to 6.5% wholesale and 6.7% retail rate increases effective January 1, 2012, as a result of increases in
fuel costs, related primarily to coal transportation, and infrastructure investments. An additional increase is due to
a 9.0% increase in kilowatt-hour energy sales to wholesale customers.
Revenues from Participation Sales to LES and Sales to Other Utilities
During 2013, the District made participation sales to LES from the capacity and energy produced at
Gerald Gentleman Station (“GGS”) and Sheldon Station; to KCP&L Greater Missouri Operations
Company (“KCPL”) from Cooper Nuclear Station (“CNS”); to Heartland Consumers Power District (“Heartland”)
from CNS; and to the Municipal Energy Agency of Nebraska (“MEAN”) from GGS and CNS. The District also
engaged in sales of energy with other utilities on a nonfirm basis.
Nebraska Public Power District
44
Revenue from participation sales to LES increased from $34.7 million in 2012 to $37.6 million in 2013. The
increase is due primarily to LES’ share of operating and maintenance costs related to Sheldon Station being
greater in 2013 than in 2012. Revenues from participation sales to LES increased from $33.6 million in 2011 to
$34.7 million in 2012. The increase is due primarily to LES’ share of fuel costs related to GGS being greater in
2012 than in 2011.
Sales to other utilities consist of participation sales to KCPL, Heartland, and MEAN and nonfirm off-system sales.
The Energy Authority (“TEA”), of which the District is a member, has energy marketing responsibilities for the
District’s nonfirm off-system sales and the related management of credit risks. Sales to other utilities increased
from $136.6 million in 2012 to $191.3 million in 2013, an increase of $54.7 million. This increase is due primarily
to additional revenue realized from nonfirm off-system sales as the result of excess generation being available to
sell on the open market, due to no refueling and maintenance outage at CNS in 2013, and higher nonfirm market
prices. Sales to other utilities decreased from $183.8 million in 2011 to $136.6 million in 2012, a decrease of
$47.2 million. This decrease is due primarily to reduced revenues realized from nonfirm off-system sales as the
result of a decrease in kilowatt-hour energy sales and a decrease in nonfirm market prices.
Other Operating Revenue
Other operating revenue consists primarily of transmission wheeling revenues and revenue from work for other
utilities. These revenues were $59.2 million, $49.2 million, and $40.8 million in 2013, 2012, and 2011,
respectively. The increases in 2013 and 2012 are due primarily to Southwest Power Pool (“SPP”) Schedule 11
revenues which represent costs paid by other transmission customers of SPP to the District for its qualifying
transmission upgrade projects.
Unearned Revenue
The District’s wholesale and retail electric rates are established on a prospective basis. The estimated revenue
requirements used to establish rates include operating expenses, excluding depreciation and amortization; debt
service requirements on revenue bonds; payments of principal and interest on subordinated debt; amounts for
capital projects to be paid from current revenues; amounts for reserves to pay future costs, such as future nuclear
facility decommissioning costs; and other postretirement benefit costs, net of revenue received from LES and
other utilities (nonfirm and other sales).
Under the provisions of the District’s wholesale power contracts, if the rates for wholesale power service in any
year result in a surplus or deficiency in revenues necessary to meet revenue requirements, such surplus or
deficiency, within certain limits set forth in the wholesale power contracts, may be retained in a rate stabilization
account. Any amounts in excess of the limits will be included as an adjustment to revenue requirements in future
rate periods. A similar process is followed in accounting for any surplus or deficiency in revenues necessary to
meet revenue requirements for retail electric service. Under generally accepted accounting principles for
regulated electric utilities, such surpluses or deficiencies are accounted for as “regulatory assets or liabilities.” The
District follows this accounting treatment.
The District recognizes all revenues in excess of revenue requirements in any year as a deferral or reduction of
revenues. Such surplus revenues are excluded from the net revenues available under the General Revenue Bond
Resolution (“General Resolution”) to meet debt service requirements for such year. Surplus revenues are
included in the determination of net revenues available under the General Resolution to meet debt service
requirements in the year that such surplus revenues are taken into account in setting rates. The District
recognizes any deficiency in revenues needed to meet revenue requirements in any year as an accrual or
increase in revenues, even though the revenue accrual will not be realized as “cash” until some future rate period.
Such revenue deficiency is included, in the year accrued, in the net revenues available under the General
Resolution to meet debt service requirements for such year. Revenue deficiencies are excluded in the
determination of net revenues available under the General Resolution to meet debt service requirements in the
year that such revenue deficit is taken into account in setting rates.
5
Nebraska Public Power District
During 2013 and 2011, revenues from electric sales to wholesale, retail, and other utilities exceeded actual
revenue requirements in each year. During 2012, actual revenue requirements exceeded electric sales to
wholesale, retail, and other utilities.
The District deferred or decreased revenues a net amount of $60.1 million in 2013. The District’s revenues in
2013 from electric sales to wholesale, retail, and other utilities resulted in a surplus, or over collection of costs, of
$60.8 million, which surplus amount was deferred (decrease in revenues). In addition, the wholesale rates that
were in place for 2013 included a refund of $0.7 million of surplus net revenues from past rate periods. Such
surplus had previously been accounted for as a reduction in revenue in the year(s) the surplus occurred.
Accordingly, the 2013 revenues from electric sales, which reflect the surplus being refunded, are offset by a
revenue adjustment (increase in revenues) for such amount.
The District recognized or increased revenues a net amount of $24.6 million in 2012. The District’s revenues in
2012 from electric sales to wholesale, retail, and other utilities resulted in a deficiency, or under collection of
costs, of $3.7 million, which deficiency amount was accrued (increase in revenues). In addition, the wholesale and
retail rates that were in place for 2012 included a refund of $20.9 million of surplus net revenues from past rate
periods. Such surplus had previously been accounted for as a reduction in revenue in the year(s) the surplus
occurred. Accordingly, the 2012 revenues from electric sales, which reflect the surplus being refunded, are offset
by a revenue adjustment (increase in revenues) for such amount.
The District deferred or decreased revenues a net amount of $15.5 million in 2011. The District’s revenues in
2011 from electric sales to wholesale, retail, and other utilities resulted in a surplus, or over collection of costs, of
$15.5 million, which surplus amount was deferred (decrease in revenues).
As of December 31, 2013, 2012, and 2011, the District had $101.9 million, $41.7 million, and $66.3 million,
respectively, of surplus unearned revenues yet to be applied as credits against revenue requirements in future
rate periods.
Operating Expenses
The following chart illustrates operating expenses for the years 2011, 2012, and 2013.
Total operating expenses in 2013 were $941.9 million, a decrease of $5.9 million from 2012. Total operating
expenses in 2012 were $947.8 million, an increase of $45.3 million from 2011. The changes were due primarily to
the following:
Purchased power and production fuel expenses were $366.2 million, $345.1 million, and $316.4 million in 2013,
2012, and 2011, respectively. These expenses increased $21.1 million in 2013 as compared to 2012 due
primarily to higher fuel costs as a result of increased generation and increased purchased power costs. These
Nebraska Public Power District
6
6
expenses increased $28.7 million in 2012 as compared to 2011 due primarily to increased native wholesale load
sales, higher fuel costs as a result of price increases in coal transportation costs, and increased purchased power
costs.
Production operation and maintenance expenses were $247.8 million, $285.0 million, and $265.9 million in 2013,
2012, and 2011, respectively. These costs decreased $37.2 million in 2013 as compared to 2012 due primarily to
the costs associated with a planned refueling and maintenance outage at CNS in 2012. No such outage occurred
in 2013. These costs increased $19.1 million in 2012 as compared to 2011 due primarily to additional costs
associated with a planned refueling and maintenance outage at CNS in 2012.
Transmission and distribution operation and maintenance expenses were $76.4 million, $61.9 million, and
$59.1 million in 2013, 2012, and 2011, respectively. These costs increased $14.5 million in 2013 as compared to
2012 and $2.8 million in 2012 as compared to 2011 both due primarily to increases in SPP wheeling and
Schedule 11 fees. The District’s firm requirement customers are charged on a load ratio share basis for other
SPP transmission owners qualifying transmission system upgrade projects.
Customer service and information expenses were $16.6 million, $16.7 million, and $19.6 million in 2013, 2012,
and 2011, respectively. These expenses did not vary significantly from 2013 to 2012. These costs decreased
$2.9 million in 2012 as compared to 2011 due primarily to decreases in energy efficiency payments, advertising
costs, and other customer service costs.
Administrative and general expenses were $59.7 million, $51.7 million, and $51.1 million in 2013, 2012, and 2011,
respectively. These costs increased $8.0 million in 2013 as compared to 2012 due primarily to increases in
healthcare costs and the funding of retiree postemployment benefits along with less administrative and general
costs being capitalized in 2013. These expenses did not vary significantly from 2012 to 2011.
Decommissioning expenses were $10.7 million, $25.4 million, and $33.8 million in 2013, 2012, and 2011,
respectively. Decommissioning expenses represent the net amount accrued each year for the future
decommissioning of CNS. Such expenses are recorded in an amount equivalent to the interest income on
investments in the nuclear facility decommissioning fund plus amounts collected for decommissioning in the rates
for electric service in such year. Decommissioning expenses decreased by $14.7 million in 2013 as compared to
2012 due to a decrease in interest income on investments. Decommissioning expenses decreased by $8.4 million
in 2012 as compared to 2011 due to a decrease in market value changes of investments. No amount for
decommissioning was collected through rates in 2013, 2012, or 2011.
To the extent that the accretion on the asset retirement obligation determined under Accounting Standards
Codification 410 is different from the total of amounts collected in rates and investment earnings on monies
accumulated in the decommissioning funds, the District will defer that difference as a regulatory asset or liability to
be recovered or refunded in future periods. Accretion for 2013, 2012, and 2011 was $46.0 million, $43.8 million,
and $41.6 million, respectively, and decommissioning expense was $10.7 million, $25.4 million, and $33.8 million,
respectively.
Depreciation and amortization expenses were $127.3 million, $126.5 million, and $123.1 million in 2013, 2012,
and 2011, respectively. These expenses did not vary significantly from 2013 to 2012. These expenses increased
$3.4 million in 2012 as compared to 2011 due primarily to recent investments at CNS.
Increase in Net Position
The increase in net position (net revenues) was $97.4 million in 2013, $75.0 million in 2012, and $45.7 million in
2011. The change in net position in 2013 as compared to 2012 was $22.4 million and reflects increases in
revenue requirements used to establish rates for 2013 for the purpose of increased construction from revenue
and commercial paper principal payments, along with a decrease in excess bond proceeds to pay interest,
partially offset by decreased revenue bond principal payments and an increase in depreciation expense. The
change in net position in 2012 as compared to 2011 was $29.3 million and reflects increases in revenue
requirements used to establish rates for 2012 for the purpose of increased construction from revenue and
revenue bond principal payments along with a decrease in excess bond proceeds to pay interest partially offset
by decreased commercial paper principal payments and an increase in depreciation expense.
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Nebraska Public Power District
CAPITAL REQUIREMENTS
The District’s Board of Directors (“Board”) authorized capital projects totaling approximately $78.9 million in 2013,
$124.5 million in 2012, and $287.1 million in 2011. The amount for 2013 included $27.1 million for replacement of
a low pressure turbine at GGS, $11.6 million for installation of stainless steel liners in coal silos at GGS, and
$7.7 million for fire protection upgrades at CNS. The amount for 2012 included $10.2 million for replacement of
service water discharge pipe at CNS, $9.6 million for replacement of a startup station service transformer at CNS,
$8.1 million for installation of horizontal storage modules at CNS, and $7.2 million for replacement of boiler
waterwall tubes at GGS. The amount for 2011 included $65.9 million for Phase II of construction of a high-voltage
transmission line from Axtell, Nebraska to the Kansas border, $50.1 million for construction of transmission lines
and substations related to the TransCanada Keystone XL Pipeline Project (this project has been put on hold as of
December 31, 2013), the majority of which will be reimbursed by TransCanada, $39.3 million for installation of low
nitrogen-oxide burners at GGS, and $9.2 million for Phase II of an electrical power back feed at CNS. The
remaining capital projects authorized in 2013, 2012, and 2011, which totaled $32.5 million, $89.4 million, and
$122.6 million, respectively, were primarily for renewals and replacements to existing facilities and other minor
additions and improvements. The Board-approved budget for capital projects for 2014 is $249.2 million, which
includes $98.3 million for construction of a high-voltage transmission line and related substations from Hoskins
Substation northeast of Norfolk, Nebraska to Neligh, Nebraska, $26.1 million to apply a protective coating to the
interior of the torus at CNS, and $7.1 million for installation of wet dust collectors in coal silos at GGS. The
District’s capital requirements are funded by a combination of monies generated from operations, issuance of
revenue bonds, issuance of short-term debt, and other available reserve funds.
Nebraska Public Power District
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FINANCING ACTIVITIES
Revenue Bonds
The District had $1.733 billion (par amount) of outstanding revenue bonds at December 31, 2013, as compared to
$1.888 billion (par amount) at December 31, 2012, and $1.954 billion (par amount) at December 31, 2011. The
revenue bonds outstanding are at fixed interest rates and were issued at premiums or discounts.
In October 2013, the District issued $118.3 million of tax-exempt revenue bonds to advance refund $154.9 million
of bonds.
In October 2012, the District issued $220.2 million of tax-exempt revenue bonds to advance refund $198.3 million
of bonds, to finance $35.0 million of the costs of certain generation and transmission capital additions, and to
refund $7.0 million of tax-exempt commercial paper (“TECP”).
In February 2012, the District issued $212.4 million of tax-exempt revenue bonds to advance refund
$167.2 million of bonds, to finance $40.3 million of the costs of certain generation and transmission capital
additions, and to refund $20.2 million of the tax-exempt revolving credit agreement (“TERCA”) indebtedness.
In May 2011, the District issued $61.4 million of tax-exempt revenue bonds to refund $64.2 million of taxable
commercial paper (“TCP”) notes.
The District retired $118.9 million, $133.1 million, and $120.8 million of General System Revenue Bonds in 2013,
2012, and 2011, respectively.
The District’s current credit ratings on its long-term debt are as follows:
Moody’s Investors Service
Standard & Poor’s Ratings Services
Fitch Ratings
A1
A
A+
(stable outlook)
(stable outlook)
(stable outlook)
Commercial Paper Notes
The District had outstanding $102.3 million of TECP notes at December 31, 2013, $102.3 million at December 31,
2012, and $110.0 million at December 31, 2011. The District is authorized to issue up to $150.0 million of TECP
notes and has a bank credit agreement, expiring August 1, 2014, maintained to support the sale of the
commercial paper notes. The District anticipates renewing this agreement prior to its August 2014 expiration.
Revolving Credit Agreements
In 2011, the District established tax-exempt and taxable revolving credit agreements. The District had outstanding
under the TERCA $109.0 million at December 31, 2011. The District had outstanding under the taxable revolving
credit agreement (“TRCA”) $149.4 million at December 31, 2013, $148.6 million at December 31, 2012, and
$6.1 million at December 31, 2011. The District is authorized to borrow up to an aggregate amount of
$200.0 million on the revolving credit agreements. Both the TERCA and TRCA have a bank credit agreement,
expiring August 31, 2015, maintained to support the lines of credit.
DEBT SERVICE COVERAGE
The District’s debt service coverage was 1.73 in 2013, 1.61 in 2012, and 1.65 in 2011. The coverage is provided
primarily by the amounts collected in operating revenues to fund the cost of utility plant additions, the amounts
collected in operating revenues for principal and interest payments on the outstanding commercial paper notes,
the amounts collected in operating revenues for principal associated with the 2008 Series A Bonds maturing
January 1, 2014 and the 2009 Series B Bonds maturing January 1, 2013 and 2014, and the amounts collected in
operating revenues to fund the cost of payments made to those municipalities served by the District under
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Nebraska Public Power District
long-term Professional Retail Operations Agreements. The District has established a goal in its planning process
to maintain a debt service coverage of approximately 1.5 times annual debt service.
CNS FUTURE OPERATION
Cooper Nuclear Station is currently licensed to operate until January 18, 2034.
The District entered into an agreement for support services at CNS with Entergy Nuclear Nebraska, LLC
(“Entergy”), a wholly-owned indirect subsidiary of Entergy Corporation, in October 2003. The Entergy agreement
was for an initial term ending January 18, 2014. The agreement was subsequently extended, effective January 1,
2010, to January 18, 2029. The agreement requires the District to reimburse Entergy’s costs of providing services
and to pay Entergy annual management fees. Since 2007, Entergy has been eligible to earn additional incentive
fees if CNS achieves identified safety and regulatory performance targets during each such year.
The District entered into agreements for the sale of capacity and energy from CNS to Heartland, to KCPL, and to
MEAN. The Heartland agreement provided for delivery of capacity and energy from January 1, 2004 through
December 31, 2013, in amounts ranging from 5 MW up to 45 MW. The KCPL agreement provides for delivery of
75 MW of capacity and energy from January 1, 2005 through January 18, 2014. The MEAN agreement, amended
on December 27, 2010, provided for delivery of capacity and energy from January 1, 2011 through the last day of
the month prior to the commercial operation of the Whelan Energy Center 2 (“WEC2”), a 220 MW coal-fired power
plant, of 45 MW, of which 29 MW was provided from CNS and 16 MW from GGS. MEAN has an ownership
interest in WEC2, which began commercial operation on May 1, 2011, and such agreement terminated on
April 30, 2011. On December 27, 2010, the District entered into a second MEAN agreement for the delivery of
capacity and energy from January 1, 2011 through December 31, 2023, of 50 MW, of which 26 MW will be
provided from CNS and 24 MW from GGS.
As a result of the failure of the Department of Energy (“DOE”) to dispose of spent nuclear fuel from CNS as
required by contract, the District commenced legal action against the DOE on March 2, 2001. In accordance with
a settlement agreement between the District and the DOE that was executed on May 18, 2011, the District has
received $87.4 million from the DOE for damages from 2009 through 2012. The settlement agreement addressed
future claims through 2013. In January 2014, the DOE extended the settlement agreement through 2016. The
District also reserves the right to pursue future damages through the contract claims process. The District plans to
use the funds to pay for future costs related to CNS.
RESOURCE PLANNING
The Board approved the 2013 Integrated Resource Plan (“IRP”) at the June 2013 Board meeting. The IRP
indicated that an extended power uprate at CNS appeared beneficial. In August 2013, after further investigation
and analysis of the costs and risks of an extended power uprate, the Board decided not to pursue this project.
The District is still well positioned to meet its firm load requirement needs for approximately the next 15 years.
After the commercial operation of the 75 MW Broken Bow II Wind Facility in Custer County, Nebraska, planned
for the first quarter of 2015, the District will be supplying its firm requirement customers with approximately 9% of
their energy usage from renewable wind as compared to the District’s renewable energy goal of 10% by 2020.
Renewable Additions
In January 2013, the District entered into a 25-year power purchase agreement with Steele Flats Wind Project,
LLC to purchase electric power from the 75 MW Steele Flats Wind Facility near Steele City, Nebraska, which
began commercial operation on November 1, 2013. The District is required to take all the capacity and energy of
this facility for the first twenty years of operation and one percent of the capacity and energy for the remaining
five years.
As of December 31, 2013, the District had entered into power purchase agreements with seven wind facilities
having a total capacity of 435 MW. These agreements are for terms ranging from 20 to 25 years and require the
District to purchase all the electric power output of these wind facilities. The District has entered into power sales
agreements to sell 155 MW of this capacity to four other utilities in Nebraska over similar terms.
Nebraska Public Power District
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In addition, the District owns and operates the 60 MW Ainsworth Wind Energy Facility and has 20-year
participation power agreements to sell 28 MW to four other utilities.
The District will pay only for energy delivered pursuant to such power purchase wind agreements and the cost of
the substation and transmission work to connect these facilities to the District’s electric system. Participating
utilities will pay their pro rata share of energy delivered from these facilities along with associated capital additions
for substation and transmission work.
ENERGY RISK MANAGEMENT PRACTICES
The nature of the District’s business exposes it to a variety of risks, including exposure to volatility in electric
energy and fuel prices, uncertainty in load and resource availability, the creditworthiness of its counterparties, and
the operational risks associated with transacting in the wholesale energy markets.
To help manage energy risks, the District relies upon TEA to both transact on its behalf in the wholesale energy
markets and to develop and recommend strategies to manage the District’s exposure to risks in the wholesale
energy markets. TEA combines a strong knowledge of the District’s system, an in-depth understanding of the
wholesale energy markets, experienced people, and state-of-the-art technology to deliver a broad range of
standardized and customized energy products and services to the District.
TEA has assisted the District in developing its Energy Risk Management (“ERM”) program and associated
ERM Governing Policy (“Policy”). The Policy, approved by the Board, establishes guidelines and objectives and
delegation of authorities necessary to govern activities related to the District’s ERM program. The objective of the
ERM program is to increase fuel and energy price stability by hedging the risk of significant adverse impacts to
cash flow. These adverse impacts could be caused by events such as natural gas or power price spikes or
extended unplanned outages. The ERM program has been developed to provide assurance to the Board that the
risks inherent in the wholesale energy market are being quantified and appropriately managed.
The District is a member of SPP, a regional transmission organization (“RTO”) based in Little Rock, Arkansas.
Membership in SPP provides the District reliability coordination service, generation reserve sharing, regional tariff
administration, including generation interconnection service, network, and point-to-point transmission service, and
regional transmission expansion planning. The District was able to participate in SPP’s energy imbalance market,
a real-time balancing market that provides members the opportunity to have SPP dispatch resources based on
marginal cost, through February 2014.
On March 1, 2014, SPP successfully implemented its integrated market which is expected to operate similar to
other RTOs that are currently in place throughout the United States. The goal of the SPP integrated market is to
reduce total production costs within the SPP region. TEA is registered as the market participant for the District in
the new SPP integrated market.
ECONOMIC FACTORS
The continuing strong overall performance of Nebraska’s agricultural sector, as measured by net farm income,
and recent growth in the state’s manufacturing sector, as measured by growth in employment, have both
contributed to the state’s positive economic performance. Nebraska and the Midwest region continue to
experience unemployment rates that are higher than pre-recession levels, but far below the national averages.
Nebraska’s unemployment rate decreased from an average of 4.0% for 2012 to an average of 3.9% for 2013 and
remained well below the 2013 national average unemployment rate of 7.4%, Nebraska’s seasonally adjusted
unemployment rate was 3.6% in December 2013, down from 4.0% in December 2012. Both numbers were well
below the national December seasonally adjusted unemployment rates of 6.7% in 2013 and 7.9% in 2012. For
December 2013, Nebraska was tied for the second lowest unemployment rate in the nation. The District continues
to monitor changes in national and global economic conditions, as these could impact cost of debt and access to
capital markets.
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Nebraska Public Power District
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
The District administers a single-employer defined benefit healthcare plan that provides lifetime healthcare
insurance for eligible retirees and their spouses. Eligibility and benefit provisions are established by the Board. In
addition, the District provides employees a $5,000 death benefit when they retire and substantially all of the
District’s retired and active employees are eligible for such benefit.
In 2008, the District established an irrevocable trust to begin funding the unamortized Other Postemployment
Benefits (“OPEB”) obligation. Total contributions to the plan in 2013 were $23.6 million which included
$10.0 million paid to the trust and $13.6 million for the cost of benefits. Total contributions to the plan in 2012
were $15.6 million which included $4.0 million paid to the trust and $11.6 million for the cost of benefits. Total
contributions to the plan in 2011 were $21.0 million which included $10.0 million paid to the trust and $11.0 million
for the cost of benefits. It is currently projected that funding above the pay-as-you-go amount will remain at
$10.0 million in 2014. The final funding will be determined annually by the Board. The trust is currently projected
to be fully funded by 2033.
The Actuarial Accrued Liability (“AAL”) is the present value of benefits attributable to past accounting periods. The
AAL was $520.7 million, $498.5 million, and $427.7 million as of January 1, 2013, 2012, and 2011, respectively.
The AAL is presented in the table below based on the actuarial valuation as of January 1, (000’s):
2013
2012
2011
Actuarial
Unfunded Actuarial
Actuarial Value Accrued Liability
Accrued Liability
of Assets
(AAL)
(UAAL)
(a)
(b)
(b-a)
$ 30,781
$ 520,705
$ 489,924
$ 24,900
$ 498,485
$ 473,585
$ 15,086
$ 427,709
$ 412,623
Funded
Ratio
(a/b)
5.9%
5.0%
3.5%
Covered
Payroll
(c)
$ 187,378
$ 189,211
$ 189,428
UAAL to
Covered
Payroll
((b-a)/c)
261%
250%
218%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the
plan and the annual required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood
by the employer and the plan members) and include the types of benefits provided at the time of each valuation
and the historical pattern of sharing benefit costs between the employer and plan members to that point. The
actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective
of the calculations.
In the January 1, 2012 actuarial valuation, which is the most recent actuarial study, the Unit Credit Actuarial Cost
method was used for 2013, 2012, and 2011. In 2013, the actuarial assumptions included an annual healthcare
cost trend rate of 8.5% initially, reduced by decrements to an ultimate rate of 4.6%. In 2012, the actuarial
assumptions included an annual healthcare cost trend rate of 8.1% initially, reduced by decrements to an ultimate
rate of 4.6%. In 2011, the actuarial assumptions included an annual healthcare cost trend rate of 7.2% initially,
reduced by decrements to an ultimate rate of 4.4%. The discount rate used for 2013 and 2012 was 5.0% and for
2011 was 5.75%. The discount rate was based on the District’s return on internal investments used to fund benefit
payments blended with the expected return on assets of the OPEB Trust Fund. An inflation rate of 3.5% was also
assumed for all three years. Amortization for the initial unfunded AAL was determined using a closed period of
30 years and the level percentage of projected payroll method assuming 4.0% payroll growth was used for all
three years.
The actuarial valuation of plan assets was based on market values as of January 1, 2012. The market value of
plan assets was $48.3 million, $31.7 million, and $24.9 million at December 31, 2013, 2012, and 2011,
respectively.
Nebraska Public Power District
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COMMITMENTS AND CONTINGENCIES
The District entered into a Transmission Facilities Construction Agreement with TransCanada Keystone Pipeline,
LP (“Keystone”). This agreement addresses the transmission facilities, construction, cost allocation, payment, and
applicable cost recovery for the interconnection and delivery facilities required for the interconnection of Keystone
to the District’s transmission system. Cost of the project was $8.4 million and repayment by Keystone, over a
ten-year period, began in July 2010 with a remaining balance due the District of $6.1 million as of December 31,
2013.
The District entered into a second Transmission Facilities Construction Agreement with TransCanada Keystone
XL Pipeline, LP (“Keystone XL”). This agreement addresses the transmission facilities, construction, cost
allocation, payment, and applicable cost recovery for the interconnection and delivery facilities required for the
interconnection of Keystone XL to the District’s transmission system. The initial estimated cost of the project was
$52.9 million and was to be paid by Keystone XL over a ten-year period anticipated to begin July 2013. However,
the project was recently delayed due to routing concerns of the pipeline across the Nebraska Sandhills.
Adjustments to the facilities, project costs, and completion schedules will be made once the final route is
determined, which is unknown at the present time. Keystone XL remains responsible for all present and future
project costs with repayment to begin at project completion or cancellation. As of December 31, 2013, actual
project costs totaled $12.2 million.
The District received written notice from the Internal Revenue Service (the “Service”) that the Service had
concluded that certain of the District’s General Revenue Bonds, 2009 Series A (Taxable Build America Bonds) did
not qualify for the 35% interest subsidy provided by the United States Treasury based on an interpretation by the
Service of the issue price of such Bonds to the public. While the District disagreed with the conclusion of the
Service, the District has agreed to resolve the matter by entering into a closing agreement with the Service and
paying $350,000 to the Service pursuant to the closing agreement. Based on the closing agreement, the District
may continue to claim credits with respect to the interest paid on the 2009 Series A Bonds and the Service has
agreed not to contest such credits on the basis of the Service’s conclusions referred to above.
In October 2013, the Service affirmed, pursuant to the requirements of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended, that the 35% interest subsidy provided by the United States Treasury on
the District’s General Revenue Bonds, 2009 Series A (Taxable Build America Bonds) and 2010 Series A (Taxable
Build America Bonds), will be reduced by 7.2%. This reduction in the interest subsidy will be applied to the
Service payments made on or after October 1, 2013 through September 30, 2014, or intervening Congressional
action, at which time the reduction rate is subject to change. This loss of subsidy totals approximately $0.2 million.
In March 2013, the District initiated a voluntary early retirement incentive program (“program”) to all regular,
full-time employees, excluding senior management, who meet certain retirement-eligible criteria. Approximately
575 District employees were eligible for the program and 110 District employees accepted the offer. Their last day
of employment was no later than June 30, 2013. Those employees who participated in the program received
six months of salary in one, lump sum payment. Total cost of the program was $6.0 million.
The District is aware that four wholesale customers located in northeast Nebraska have made requests for
proposals from power suppliers other than the District. These customers currently represent 3% of Operating
Revenues. At this time, the District has received notice from three of the respective customers as to their intent to
level off or reduce the requirements under their current contract beginning in 2019. If a substantial number of
wholesale customers begin leveling off or reducing their requirements, the District would be required to increase
its rates to recover costs.
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Nebraska Public Power District
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of the
Nebraska Public Power District:
We have audited the accompanying financial statements of Nebraska Public Power District (the “District”) which
comprise the balance sheets as of December 31, 2013 and 2012, and the related statements of revenues, expenses,
and changes in net position, and of cash flows for the years then ended.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
the District as of December 31, 2013 and 2012, and the respective changes in financial position and cash flows for the
years then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
The accompanying management’s discussion and analysis and the calculation of debt service ratios on pages 2
through 13 and 18, respectively, are required by accounting principles generally accepted in the United States of
America to supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audits of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise
the District’s basic financial statements. The statistical review is presented for purposes of additional analysis and is not
a required part of the basic financial statements. Such information has not been subjected to the auditing procedures
applied in the audits of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
St. Louis, Missouri
April 10, 2014
Nebraska Public Power District
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FINANCIAL STATEMENTS
Balance Sheets - December 31, 2013 and 2012 (000’s)
ASSETS AND DEFERRED OUTFLOWS
Current Assets:
Cash and cash equivalents
Investments
Receivables, less allowance for doubtful accounts of $478 and $476,
respectively
Fossil fuels, at average cost
Materials and supplies, at average cost
Prepayments and other current assets
Special Purpose Funds:
Cash and cash equivalents:
Construction funds
Debt reserve fund
Employee benefit funds
Investments:
Construction funds
Debt reserve fund
Employee benefit funds
Decommissioning funds
Utility Plant, at Cost:
Utility plant in service
Less reserve for depreciation
Construction work in progress
Nuclear fuel, at amortized cost
Other Long-Term Assets:
Asset retirement obligation
OPEB obligation
Long-term capacity contracts
Unamortized financing costs
Investment in The Energy Authority
Other
2013
$
162,384
230,452
2012
$
157,618
166,528
102,805
35,951
123,084
11,178
665,854
93,893
40,845
133,630
16,398
608,912
264
1,188
4,853
4,513
3
945
53,666
93,607
903
533,739
688,220
88,160
101,729
6,268
543,364
744,982
4,549,279
2,433,049
2,116,230
170,083
213,756
2,500,069
4,434,580
2,346,408
2,088,172
203,364
221,975
2,513,511
442,338
123,475
186,810
10,687
6,695
25,787
795,792
4,649,935
385,622
111,656
193,799
11,500
7,801
19,489
729,867
4,597,272
Total Assets
Deferred Outflows of Resources:
Unamortized cost of refunded debt
16,504
TOTAL ASSETS AND DEFERRED OUTFLOWS
$ 4,666,439
LIABILITIES, DEFERRED INFLOWS, AND NET POSITION
Current Liabilities:
Current maturities of revenue bonds
$
124,585
Current maturities of commercial paper notes
102,300
Accounts payable and accrued liabilities
84,868
Accrued in lieu of tax payments
10,057
Accrued payments to retail communities
6,426
Accrued compensated absences
16,052
Other
7,941
352,229
Long-Term Debt:
1,695,827
Revenue bonds, net
Commercial paper notes and revolving credit agreements
149,417
1,845,244
Other Long-Term Liabilities:
Asset retirement obligation
977,083
Other postemployment benefits
125,375
Other
7,109
1,109,567
Total Liabilities
3,307,040
Deferred Inflows of Resources:
Unearned revenue
101,861
Settlement reimbursement
78,776
180,637
Net Position:
Net investment in capital assets
747,650
Restricted
42,883
Unrestricted
388,229
1,178,762
$ 4,666,439
TOTAL LIABILITIES, DEFERRED INFLOWS, AND NET POSITION
$
$
18,066
4,615,338
256,680
—
86,569
9,605
5,685
16,956
10,761
386,256
1,722,096
250,855
1,972,951
930,178
111,656
11,668
1,053,502
3,412,709
41,714
79,536
121,250
$
613,866
49,290
418,223
1,081,379
4,615,338
The accompanying notes to financial statements are an integral part of these statements.
15
15
Nebraska Public Power District
Statements of Revenues, Expenses, and Changes in Net Position
for the years ended December 31, (000’s)
Operating Revenues
2013
$
Operating Expenses:
Power purchased
Production Fuel
Operation and maintenance
Transmission and distribution operation and maintenance
Customer service and information
Administrative and general
Payments to retail communities
Decommissioning
Depreciation and amortization
Payments in lieu of taxes
Operating Income
Non-Operating Income:
Investment income
Other income
Increase in Net Position Before Non-Operating Expenses
Non-Operating Expenses:
Interest on long-term debt
Allowance for funds used during construction
Bond premium amortization net of debt issuance expense
Other expenses
Increase in Net Position
Net Position:
Beginning balance
Ending balance
$
The accompanying notes to financial statements are an integral part of these statements.
16
Nebraska Public Power District
16
1,106,291
2012
$
1,080,998
148,986
143,579
217,242
247,822
76,352
16,558
59,723
27,092
10,699
127,283
10,130
941,887
164,404
201,549
285,027
61,883
16,706
51,650
25,773
25,414
126,512
9,673
947,766
133,232
11,839
3,382
15,221
179,625
27,552
3,560
31,112
164,344
91,858
(2,842)
(8,368)
1,594
82,242
97,383
100,348
(6,162)
(6,208)
1,322
89,300
75,044
1,081,379
1,178,762
$
1,006,335
1,081,379
Statements of Cash Flows for the years ended
December 31, (000’s)
2013
Cash Flows from Operating Activities:
Receipts from customers and others
Other receipts
Payments to suppliers and vendors
Payments to employees
$
Net cash provided by operating activities
1,162,065
3,254
(520,342)
(237,845)
2012
$
407,132
Cash Flows from Investing Activities:
Proceeds from sales and maturities of investments
Purchase of investments
Income received on investments
Net cash used in investing activities
1,064,464
9,004
(523,315)
(237,134)
313,019
1,145,451
(1,168,080)
2,698
803,650
(837,347)
3,768
(19,931)
(29,929)
Cash Flows from Capital and Related Financing Activities:
Proceeds from issuance of bonds
Proceeds from issuance of notes
Proceeds from advance on tax-exempt and taxable revolving credit
agreements
Capital expenditures for utility plant
Contribution in aid of construction
Principal payments on long-term debt
Interest payments on long-term debt
Principal payments on notes
Interest payments on notes
Principal payment on tax-exempt revolving credit agreement
Funds advanced - Whelan Energy Center 2
Other non-operating revenues
126,158
—
209,516
4,000
20,650
(151,128)
7,024
(273,780)
(92,486)
—
(175)
(19,787)
(1,449)
3,382
57,149
(260,523)
1,552
(233,085)
(99,076)
(11,700)
(184)
(23,694)
(1,091)
3,560
Net cash used in capital and related financing activities
(381,591)
(353,576)
$
5,610
163,079
168,689
$
(70,486)
233,565
163,079
$
164,404
$
133,232
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Reconciliation of Operating Income to Cash Provided By Operating Activities:
Operating income
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation and amortization
Undistributed net revenue - The Energy Authority
Decommissioning, net of customer contributions
Amortization of nuclear fuel
Changes in assets and liabilities which (used) provided cash:
Receivables, net
Fossil fuels
Materials and supplies
Prepayments and other current assets
Other long-term assets
Accounts payable and accrued payments to retail communities
Unearned revenues
Other liabilities
Net cash provided by operating activities
Supplementary non-cash capital activities:
Utility plant additions in accounts payable
127,283
1,106
10,699
50,323
126,512
954
25,414
48,269
(7,463)
4,894
10,546
(1,107)
770
(13,797)
60,147
(673)
(6,565)
1,573
(8,247)
(1,403)
386
15,188
(24,554)
2,260
$
407,132
$
313,019
$
12,838
$
4,531
The accompanying notes to financial statements are an integral part of these statements.
17
17
Nebraska Public Power District
Supplemental Schedule - Calculation of Debt Service Ratios in
accordance with the General Revenue Bond Resolution for the
years ended December 31, (000’s)
Operating revenues
Operating expenses
Operating income
Investment and other income
Debt and other expenses
Increase in net position
2013
$ 1,106,291
(941,887)
164,404
15,221
(82,242)
97,383
Add:
Collections for future debt retirement
Debt and related expenses
Depreciation and amortization
Payments to retail communities(1)
Amortization of current portion of financed nuclear fuel
Amounts collected from third party financing arrangements(2)
22,510
89,300
126,512
25,773
20,125
733
284,953
119
(1,335)
1,444
228
Net position available for debt service under the General Revenue
Bond Resolution
Amounts deposited in the General System Debt Service Account:
Principal
Interest
Ratio of net position available for debt service to debt service deposits
292
(1,094)
1,128
326
$
363,744
$
359,671
$
118,915
91,758
210,673
$
133,085
90,222
223,307
$
(2)
$ 1,080,998
(947,766)
133,232
31,112
(89,300)
75,044
6,747
82,242
127,283
27,092
22,455
770
266,589
Deduct:
Investment income retained in construction funds
Unrealized loss on investment securities
Revolving credit agreement interest
(1)
2012
1.73
$
1.61
Under the provisions of the General Revenue Bond Resolution, the payments required to be made by the District with respect to the
Professional Retail Operations Agreements are to be made on the same basis as subordinated debt.
Under the provisions of the General Revenue Bond Resolution, the payments received by the District from third party financing
arrangements provide for debt service coverage, but are not recognized as revenue under Generally Accepted Accounting Principles.
The accompanying notes to financial statements are an integral part of these statements.
18
Nebraska Public Power District
18
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Organization Nebraska Public Power District (the “District”), a public corporation and a political subdivision of the State of
Nebraska, operates an integrated electric utility system which includes facilities for the generation, transmission,
and distribution of electric power and energy to its wholesale and retail customers. The control of the District and
its operations is vested in a Board of Directors consisting of 11 members popularly elected from districts
comprising subdivisions of the District’s chartered territory. The Board of Directors is authorized to establish rates.
B. Basis of Accounting The financial statements are prepared in accordance with Generally Accepted Accounting
Principles (“GAAP”) and follow accounting guidance provided by the Governmental Accounting Standards Board
(“GASB”) codification.
The District follows the provisions of Accounting Standards Codification (“ASC”) Section 980, Regulated
Operations (“ASC 980”). In general, ASC 980 permits an entity with cost-based rates to defer certain costs or
income that would otherwise be recognized when incurred to the extent that the rate-regulated entity is recovering
or expects to recover such amounts in rates charged to its customers.
C. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
D. Revenue Wholesale revenues are recorded in the period in which service is rendered, and retail revenues are recorded
in the month retail customers are billed.
The District is required under the General Revenue Bond Resolution (the “Resolution”) to charge rates for
electric power and energy so that revenues will be at least sufficient to pay operating expenses, aggregate debt
service on the General Revenue bonds, amounts to be paid into the Debt reserve fund and all other charges or
liens payable out of revenues. In the event the District’s rates for wholesale service result in a surplus or deficit in
revenues during a rate period, such surplus or deficit within certain limits may be retained in a rate stabilization
account. Any amounts in excess of the limits will be taken into account in projecting revenue requirements and
establishing rates in future rate periods. Such treatment of wholesale revenues is stipulated by the District’s
long-term wholesale power supply contracts. The District accounts for any surplus or deficit in revenues for retail
service in a similar manner.
The surpluses and deficits from prior years have been accounted for in these financial statements by either a
deferral of revenue or costs. During the years ended December 31, 2013 and 2012, the District deferred net
revenues of $60.1 million and deferred net costs of $24.6 million, respectively, and are reflected in the Balance
Sheets within Unearned revenue. The cumulative surplus at December 31, 2013, to be reflected in future revenue
requirements, is approximately $101.9 million.
E. Depreciation, Amortization, and Maintenance The District records depreciation over the estimated useful life of the property primarily on a straight-line
basis. The District’s electric rates are established based upon debt service and operating fund requirements.
Straight-line depreciation is not considered in the design of rates. As such, the District has provided for
depreciation of utility plant funded from debt in its rate setting process by using the debt service principal
requirements as the basis for depreciation as opposed to the straight-line basis of depreciation included in the
financial statements of the District. Under the methodology employed in establishing rates, the excess of
accumulated depreciation expense calculated using the debt service principal approach over the amount
calculated using the straight-line method is $80.7 million and $99.0 million for the years ended December 31,
2013 and 2012, respectively. Annual depreciation expense calculated under the debt service principal approach
19
19
Nebraska Public Power District
was less than straight-line depreciation by $4.6 million for the year ended December 31, 2013 and exceeded
straight-line depreciation by $14.7 million for the year ended December 31, 2012. Depreciation expense recorded
on a straight-line basis on utility plant was $108.5 million and $102.0 million for the years ended December 31,
2013 and 2012, respectively. Depreciation on utility plant was approximately 2.6% and 2.5% for the years ended
December 31, 2013 and 2012, respectively. The District has fully depreciated utility plant that is still in service of
$857.4 million and $840.5 million at December 31, 2013 and 2012, respectively, primarily relating to Cooper
Nuclear Station (“CNS”).
Current rates for electric service provide for a portion of plant additions to be funded from revenues. These
plant additions are capitalized and depreciated over their estimated useful life. At December 31, 2013 and 2012,
$578.7 million and $566.3 million, respectively, of net utility plant was funded from revenues. Provision for
depreciation of utility plant funded from revenues is computed using the straight-line method.
The District owns and operates the electric distribution system in one of the 80 municipalities that it serves at
retail. In addition, the District has long-term Professional Retail Operations (“PRO”) Agreements with
79 municipalities for certain retail electric distribution systems. These PRO Agreements obligate the District to
make payments based on gross revenues from the municipalities and pay for normal property additions during the
term of the agreements. The District has recorded provisions, net of retirements, for amortization of these plant
additions of $6.4 million in 2013 and $9.0 million in 2012 which is included in depreciation and amortization
expense. These plant additions, which are fully depreciated, totaled $171.3 million at December 31, 2013, and
$166.3 million at December 31, 2012.
The District charges maintenance and repairs, including the cost of renewals and replacements of minor
items of property, to maintenance expense accounts when incurred. Renewals and replacements of property
(exclusive of minor items of property, as set forth above) are charged to utility plant accounts. Upon retirement of
property subject to depreciation, the cost of property is removed from the plant accounts and charged to the
reserve for depreciation, net of salvage.
F. Cash and Cash Equivalents The District considers highly liquid investments purchased with an original maturity of three months or less to
be cash equivalents.
G. Fossil Fuel and Materials and Supplies The District maintains inventories for fossil fuels, and materials and supplies which are valued at average
cost. Due provision is made for slow moving or obsolete items.
H. Nuclear Fuel The District had entered into a contract with General Electric Company (“GE”) for fuel bundle fabrication and
related services. This contract was assigned effective January 2000 by GE to Global Nuclear Fuels-Americas.
The contract, as amended, provides for these services through 2017. The District’s existing contract with
United States Enrichment Corporation for various nuclear fuel components including enrichment services expired
December 31, 2013. The District entered into a contract with Louisiana Energy Services, LLC in 2013 for
enrichment services for five reloads starting in 2016 and ending in 2024. The District has purchased uranium
hexafluoride on the spot market for inventory and will pursue additional spot and term contracts for such
components as needed. Nuclear fuel in the reactor is being amortized on the basis of energy produced as a
percentage of total energy expected to be produced. Fees for disposal of fuel in the reactor are being expensed
as part of the fuel cost.
CNS has a dry cask used fuel storage facility to support license renewal. This facility was primarily funded
from decommissioning funds and, as such, the value of the assets in Utility plant in service represents only the
amounts that were not funded from decommissioning funds.
I.
Unamortized Financing Costs These costs represent issuance expenses on all bonds and are being amortized over the life of the respective
bonds using the bonds outstanding method. Deferred unamortized financing costs associated with bonds
refunded are amortized using the bonds outstanding method over the shorter of the original or refunded life of the
respective bonds in accordance with GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements (“GASB Statement 62”) and
are reflected in the Balance Sheets within Unamortized cost of refunded debt.
Nebraska Public Power District
20
20
J.
Allowance for Funds Used During Construction (“AFUDC”) This allowance, which represents the cost of funds used to finance construction, is capitalized as a
component of the cost of the utility plant and is credited to Non-Operating Expenses. The capitalization rate
depends on the source of financing. The rate for construction financed with revenue bonds is based upon the
interest cost of each bond issue less interest income. Construction financed on a short-term basis with tax-exempt
commercial paper (“TECP”), tax-exempt revolving credit agreement (“TERCA”), or taxable revolving credit
agreement (“TRCA”) is charged a rate based upon the projected average interest cost of TECP, TERCA, or
TRCA outstanding. For the periods presented herein, the AFUDC rates for construction funded by revenue bonds
vary from 2.2% to 5.0%. For construction financed on a short-term basis with TECP, the rate charged is 1.3%.
K. Net Position Net position is made up of three components: Net investment in capital assets, Restricted, and Unrestricted.
Net investment in capital assets consists of utility plant assets, net of accumulated depreciation and reduced
by the outstanding balances of any bonds or notes that are attributable to the acquisition, construction, or
improvement of these assets. This component also includes long-term capacity contracts net of the outstanding
balances of any bonds or notes attributable to these assets.
Restricted net position consists of the debt service reserve-primary funds that are required deposits under the
Resolution and the Decommissioning funds net of any related liabilities.
Unrestricted net position consists of any remaining net position that does not meet the definition of Net
investment in capital assets or Restricted, and are used to provide for working capital to fund non-nuclear fuel and
inventory requirements, as well as other operating needs of the District.
L. Asset Retirement Obligations Asset retirement obligations (“ARO”) represent the fair value of the District’s legal liability associated with the
retirement of CNS, various ash landfills at its two coal-fired power stations, and the removal of asbestos at its
various generating facilities.
M. Recent Accounting Pronouncements GASB Statement 62 is to incorporate into the GASB’s authoritative literature certain Financial Accounting
Standards Board (“FASB”) and American Institute of Certified Public Accountants (“AICPA”) accounting and
financial reporting guidance issued on or before November 30, 1989, which does not conflict with GASB
pronouncements. GASB Statement 62 also supersedes GASB Statement No. 20, Accounting and Financial
Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, thereby
eliminating the election provided in that Statement for enterprise funds to apply post November 30, 1989, FASB
pronouncements that do not conflict with GASB pronouncements. However, GASB Statement 62 allows these
entities to continue to apply post November 30, 1989, FASB pronouncements that do not conflict with GASB
pronouncements. The District adopted GASB Statement 62 as of January 1, 2012. The implementation of this
standard did not have a material impact on the District’s financial position or results of operation.
GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position (“GASB Statement 63”) provides guidance for the reporting of deferred outflows of
resources, deferred inflows of resources, and net position in a statement of financial position. Amounts that are
required to be reported as deferred outflows of resources should be reported in a statement of financial position in
a separate section following assets. Similarly, amounts required to be reported as deferred inflows of resources
should be reported in a separate section following liabilities. The statement of net position should report the
residual amount as net position, rather than net assets or equity. The District adopted GASB Statement 63 as of
January 1, 2012. The implementation of this standard did not have a material impact on the District’s financial
position or results of operation.
In March 2012, GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities (“GASB
Statement 65”). GASB Statement 65 establishes accounting and financial reporting standards that reclassify as
deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as
assets and liabilities. It also recognizes, as outflows of resources or inflows of resources, certain items that were
previously reported as assets and liabilities. The District adopted GASB Statement 65 as of January 1, 2013. The
implementation of this standard required certain amounts to be reclassified on the District’s Balance Sheets.
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Nebraska Public Power District
2. UTILITY PLANT:
Utility plant activity for the year ended December 31, 2013, was as follows (000’s):
December 31,
2012
Nondepreciable utility plant:
Land and improvements
Construction in progress
Total nondepreciable utility plant
Nuclear fuel*
$
62,887
203,364
266,251
221,975
Depreciable utility plant:
Generation - Fossil
1,493,998
Generation - Nuclear
1,276,823
Transmission
1,071,635
Distribution
208,090
General
321,147
Total depreciable utility plant
4,371,693
Less reserve for depreciation
(2,346,408)
Depreciable utility plant, net
2,025,285
Utility plant activity, net
$ 2,513,511
* Nuclear fuel decreases represent amortization of $50.3 million.
Increases
$
169
126,055
126,224
Decreases
December 31,
2013
$
$
—
(159,336)
(159,336)
42,104
32,354
34,928
52,006
7,091
13,497
139,876
(111,987)
27,889
$ 196,217
63,056
170,083
233,139
(50,323)
(4,732)
(7,071)
(3,380)
(2,169)
(7,994)
(25,346)
25,346
—
$ (209,659)
213,756
1,521,620
1,304,680
1,120,261
213,012
326,650
4,486,223
(2,433,049)
2,053,174
$ 2,500,069
The 2014 construction plan includes authorization for future expenditures of $249.2 million. These
expenditures will be funded from existing bond proceeds, revenues, other available funds, and additional
financings as deemed appropriate.
3. CASH AND INVESTMENTS:
The District follows GASB Statement No. 31, Accounting and Financial Reporting for Certain Investment and
for External Investments Pools (“GASB Statement 31”). GASB Statement 31 requires the District’s investments to
be recorded at fair value with the changes in the fair value of investments reported as Investment income in the
accompanying Statements of Revenues, Expenses, and Changes in Net Position. The District had an unrealized
net loss of $1.3 million as of December 31, 2013 and an unrealized net gain of $1.2 million as of December 31,
2012.
Cash deposits, primarily interest bearing, are covered by federal depository insurance, pledged collateral of
U.S. Government securities held by various depositories, or an irrevocable, nontransferable, unconditional letter
of credit issued by a Federal Home Loan Bank. Investments were in U.S. Government securities and Federal
Agency obligations held in the District’s name by the custodial banks. Cash and investments totaled
$1,081.1 million and $1,069.1 million at December 31, 2013 and 2012, respectively.
The fair value of all cash and investments, regardless of balance sheet classification, as of December 31 was
as follows (000’s):
2013
672,060
172,880
17,439
—
218,676
$ 1,081,055
U.S. Treasury and government agency securities
Corporate bonds
Municipal bonds
Certificates of deposit
Cash and money market mutual funds
Total cash and investments
Nebraska Public Power District
$
22
22
2012
671,381
175,972
15,972
256
205,547
$ 1,069,128
$
The fair value of the District’s Special Purpose Funds as of December 31 are as follows (000’s):
The Construction funds are used for capital improvements, additions, and betterments to and extensions of
the District’s system. The sources of monies for deposits to the construction funds are from revenue bond
proceeds and issuance of short-term debt.
Construction funds - Cash and cash equivalents
Construction funds - Investments
$
$
2013
264
53,666
53,930
$
$
2012
4,513
88,160
92,673
The Debt reserve fund, as established under the Resolution, consists of a Primary account and a Secondary
account. The District is required by the Resolution to maintain an amount equal to 50% of the maximum amount
of interest accrued in the current or any future year in the Primary account. Such amount totaled $42.9 million and
$49.3 million as of December 31, 2013 and 2012, respectively. The Secondary account can be established at
such amounts and can be utilized for any lawful purpose as determined by the District’s Board of Directors. Such
account totaled $51.9 million and $52.4 million as of December 31, 2013 and 2012, respectively.
Debt reserve fund - Cash and cash equivalents
Debt reserve fund - Investments
$
$
2013
1,188
93,607
94,795
2012
$
$
3
101,729
101,732
The Employee benefit funds consist of a self-funded hospital-medical benefit plan and a retired employee life
insurance benefit plan. The District pays 80% of the hospital-medical premiums with the employees paying the
remaining 20% of the cost of such coverage. The plan had contributed funds of $4.4 million and $5.7 million at
December 31, 2013 and 2012, respectively. The retired employee life insurance benefit plan was funded prior to
the adoption of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions (“GASB Statement 45”) and creation of an irrevocable grantor trust for
postretirement health and life insurance benefits. For additional information on postemployment benefits see
Note 16. The District pays the total cost of the employee life insurance benefit once the employee retires. The
plan had contributed funds of $1.4 million and $1.5 million at December 31, 2013 and 2012, respectively. Both
funds are held by outside trustees in compliance with the funding plans approved by the District’s Board of
Directors.
Employee benefit fund - Cash and cash equivalents
Employee benefit fund - Investments
$
$
2013
4,853
903
5,756
$
$
2012
945
6,268
7,213
The Decommissioning funds are utilized to account for the investments held to fund the estimated cost of
decommissioning CNS when its operating license expires. The Decommissioning funds are held by outside
trustees or custodians in compliance with the decommissioning funding plans approved by the District’s Board of
Directors which are invested primarily in fixed income governmental securities.
Decommissioning funds
$
2013
533,739
$
2012
543,364
4. FAIR VALUE OF FINANCIAL INSTRUMENTS:
As defined in ASC 820, fair value is the exchange price that would be received to sell an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants at the measurement date.
ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in an active market for identical assets or liabilities
and the lowest priority to unobservable inputs. Financial assets and liabilities are classified in their entirety based
23
23
Nebraska Public Power District
on the lowest level of input that is significant to the fair value measurement. The three levels of fair value
hierarchy defined in ASC 820 are as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting
date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and
volume to provide pricing information on an ongoing basis. The District currently does not have Level 1 assets
and liabilities included in the Decommissioning funds, other Special Purpose Funds, or Investments in Current
Assets.
Level 2 - Pricing inputs are other than quoted market prices in the active markets included in Level 1, which
are either directly or indirectly observable for the asset or liability as of the reporting date. Level 2 inputs include
the following:
• quoted prices for similar assets or liabilities in active markets;
• quoted prices for identical assets or liabilities in inactive markets;
• inputs other than quoted prices that are observable for the asset or liability; or
• inputs that are derived principally from or corroborated by observable market data by correlation or other
means.
Level 2 assets and liabilities primarily include U.S. treasury and other federal agency securities and corporate
bonds held in the District’s Decommissioning funds, other Special Purpose Funds, and certain Investments in
Current Assets. The District’s investment in cash and money market mutual funds are excluded from the ASC 820
fair value hierarchy.
Level 3 - Pricing inputs include significant inputs that are unobservable and cannot be corroborated by market
data. Level 3 assets and liabilities are valued based on internally developed models and assumptions or
methodologies using significant unobservable inputs. The District currently does not have Level 3 assets or
liabilities included in the Decommissioning funds, other Special Purpose Funds, or Investments in Current Assets.
The District performs an analysis annually to determine the appropriate hierarchy level classification of the
assets and liabilities that are included within the scope of ASC 820. Financial assets and liabilities are classified in
their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table sets forth the District’s financial assets and liabilities that are accounted for and reported
at fair value on a recurring basis by level within the fair value hierarchy as of December 31, (in 000’s):
Level 1
Assets:
Available-for-sale securities:
U.S. Treasury and government agency securities
Decommissioning funds:
U.S. Treasury and government agency securities
Corporate bonds
Municipal bonds
$
—
$ 366,878
$
—
—
—
—
305,182
172,880
17,439
$ 862,379
Level 1
Assets:
Available-for-sale securities:
U.S. Treasury and government agency securities
Certificates of deposit
Decommissioning funds:
U.S. Treasury and government agency securities
Corporate bonds
Municipal bonds
December 31, 2013
Level 2
Level 3
$
$
$
—
$ 366,878
$
—
—
—
—
305,182
172,880
17,439
$ 862,379
December 31, 2012
Level 2
Level 3
—
—
$ 321,492
256
—
—
—
—
349,888
175,972
15,972
$ 863,580
Total
$
$
Total
—
—
$ 321,492
256
—
—
—
—
349,888
175,972
15,972
$ 863,580
Decommissioning funds reflect the assets held in trust to cover general decommissioning costs and consist
primarily of fixed income governmental securities.
Nebraska Public Power District
24
24
5. LONG-TERM CAPACITY CONTRACTS:
Long-term capacity contracts include the District’s $198.2 million share of the construction costs of Omaha
Public Power District’s (“OPPD”) 682 MW Nebraska City Station Unit 2 (“NC2”) coal-fired power plant which
amount includes $15.8 million share of associated transmission facilities construction costs. The District has
entered into a participation power agreement with OPPD for a 23.7% share of the power from this plant. NC2
began commercial operation on May 1, 2009, at which time the District began amortizing the amount of the
capacity contract associated with the plant of $182.4 million on a straight-line basis over the 40-year estimated
useful life of the plant. In July 2011, OPPD refunded the District $4.9 million representing excess construction
costs and this amount was credited to Power purchased and $3.2 million of prepaid transmission costs were
transferred to prepaid purchase power due to finalized construction costs. Accumulated amortization was
$21.5 million in 2013 and $16.8 million in 2012. The unamortized amount of the plant capacity contract was
$164.1 million and $168.8 million as of December 31, 2013 and 2012, respectively, of which $4.6 million was
included in Prepayments and other current assets as of December 31, 2013 and 2012. The costs of the
transmission facilities have been returned to the District in the form of a credit on the District’s monthly
transmission bill from OPPD. The final credit appeared on the District’s December 2012 transmission bill.
Accumulated credits were $12.6 million.
Long-term capacity contracts also include the District’s purchase of the capacity of a 50 MW hydroelectric
generating facility owned and operated by The Central Nebraska Public Power and Irrigation District (“Central”).
The District is recording amortization on a straight-line basis over the 40-year estimated useful life of the facility.
Accumulated amortization was $57.4 million in 2013 and $55.1 million in 2012. The unamortized amount of the
Central capacity contract was $29.3 million and $31.6 million as of December 31, 2013 and 2012, respectively, of
which $2.3 million was included in Prepayments and other current assets as of December 31, 2013 and 2012.
The District has an agreement whereby Central makes available all the production of the facility and the
District pays all costs of operating and maintaining the facility plus a charge based on the amount of energy
delivered to the District. Costs of $1.5 million and $1.8 million in 2013 and 2012, respectively, are included in
Power purchased in the accompanying Statements of Revenues, Expenses, and Changes in Net Position.
6. DEFERRED SETTLEMENT CHARGES:
The District deferred the cost of a $39.1 million payment to MidAmerican Energy Company (“MEC”) in 2002 in
conjunction with the settlement of litigation with respect to the operation of CNS. The deferred costs of the
MEC payment were recognized as expense in future rate periods when such costs are included in the revenue
requirements used to establish electric rates. The balance of such deferral was $5.2 million as of December 31,
2012, of which $5.2 million was included in Prepayments and other current assets as of December 31, 2012. The
deferral was fully amortized as of December 31, 2013.
7. INVESTMENT IN THE ENERGY AUTHORITY:
The District is a member of The Energy Authority (“TEA”), a power marketing corporation. TEA assumes the
wholesale power marketing responsibilities of its members with each member having ownership in the joint
venture. TEA has access to approximately 25,000 megawatts of its members’ and partners’ generation located
across the nation. TEA also provides its members with natural gas procurement or contract management services
for gas used in the generation of electricity and for local distribution. TEA provides the District with gas contract
management services.
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Nebraska Public Power District
The table below contains the condensed financial information for TEA as of December 31, (000’s):
Condensed Balance Sheet
Current Assets
Noncurrent and Restricted Assets
Total Assets
$
$
Current Liabilities
Noncurrent Liabilities
Net Assets
Total Liabilities and Net Assets
$
$
Condensed Statement of Operations
Revenues
Energy Costs
Gross Profit
Operating Expenses
Operating Income
Non-Operating Income
Increase in Net Assets
2013
145,103
16,528
161,631
$
$
126,905
1,826
32,900
161,631
$
$
$ 1,316,708
(1,187,339)
129,369
(43,085)
86,284
28
$
86,312
2012
127,184
18,332
145,516
104,685
1,915
38,916
145,516
$ 1,207,495
(1,075,839)
131,656
(40,939)
90,717
39
$
90,756
At December 31, 2013 and 2012, the District had a 20% ownership interest in TEA. All of TEA’s revenues and
costs are allocated to the members. TEA’s net revenues are allocated among the members based upon a
combination of each respective member’s purchased power and power sales transactions and natural gas
transactions with TEA and each member’s ownership interest.
The following table summarizes the transactions applicable to the District’s investment in TEA as of
December 31, (000’s):
Beginning Balance
Reduction to power costs and increase in electric revenues
Distributions from TEA
Other expenses
Ending Balance
2013
7,801
34,409
(31,888)
(3,653)
$ 6,669
$
2012
8,755
25,475
(22,638)
(3,791)
$ 7,801
$
The District’s power purchases and sales with TEA are reflected in the Statements of Revenues, Expenses,
and Changes in Net Position as Power purchased, and Operating Revenues, respectively. For the years ended
December 31, 2013 and 2012, the District recorded Operating Revenues of $82.8 million and $45.5 million,
respectively, and Power purchased expenses of $2.7 million and $10.7 million, respectively.
At December 31, 2013 and 2012, $8.8 million and $8.7 million due from TEA was included in Receivables and
$0.7 million and $0.3 million due to TEA was included in Accounts payable and accrued liabilities, respectively.
As of December 31, 2013, the District is obligated to guaranty, directly or indirectly, TEA’s electric trading
activities in an amount up to $28.9 million plus attorney’s fees which any party claiming and prevailing under the
guaranty might incur and be entitled to recover under its contract with TEA. Generally, the District’s guaranty
obligations for electric trading would arise if TEA did not make the contractually required payment for energy,
capacity, or transmission which was delivered or made available or if TEA failed to deliver or provide energy,
capacity, or transmission as required under a contract.
The District’s exposure relating to TEA is limited to the District’s capital investment in TEA, any accounts
receivable from TEA, and trade guarantees provided to TEA by the District. These guarantees are within the
scope of ASC 460, Guarantees. Upon the District making any payments under its electric guaranty, it has certain
contribution rights with the other members of TEA in order that payments made under the TEA member
guaranties would be equalized ratably, based upon each member’s equity ownership interest in TEA. After such
contributions have been effected, the District would only have recourse against TEA to recover amounts paid
under the guaranty. The term of this guaranty is generally indefinite, but the District has the ability to terminate its
guaranty obligations by causing to be provided advance notice to the beneficiaries thereof. Such termination of its
Nebraska Public Power District
26
26
guaranty obligations only applies to TEA transactions not yet entered into at the time the termination takes effect.
As of December 31, 2013 and 2012, the District has not recorded a liability related to these guaranties.
8. REVENUE BONDS:
In October 2013, the District issued General Revenue Bonds, 2013 Series A, in the amount of $118.3 million
to advance refund $154.9 million of bonds.
In October 2012, the District issued General Revenue Bonds, 2012 Series B and 2012 Series C, in the
amount of $116.7 million and $103.4 million, respectively, to advance refund $198.3 million of bonds, to finance
$35.0 million of the costs of certain generation and transmission capital additions, and to refund $7.0 million of
TECP.
In February 2012, the District issued General Revenue Bonds, 2012 Series A, in the amount of $212.4 million
to advance refund $167.2 million of bonds, to finance $40.3 million of the costs of certain generation and
transmission capital additions, and to refund $20.2 million of the TERCA indebtedness.
In November 2013, the District entered into an escrow agreement in conjunction with the advanced refunding
of General Revenue Bonds, 2005 Series A, maturing on January 1, 2017 and certain bonds maturing on
January 1, 2019, and General Revenue Bonds, 2006 Series A, maturing on January 1, 2018 and January 1,
2019.
In November 2012, the District entered into an escrow agreement in conjunction with the advanced refunding
of General Revenue Bonds, 2002 Series B, maturing on and after January 1, 2014, and General Revenue Bonds,
2005 Series A, maturing on January 1, 2018 through January 1, 2025 and bearing interest at 5.00%.
In February 2012, the District entered into an escrow agreement in conjunction with the advanced refunding
of General Revenue Bonds, 2003 Series A, maturing on and after January 1, 2015.
Debt service payments and principal payments of the General Revenue Bonds as of December 31, 2013, are
as follows (000’s):
Year
2014
2015
2016
2017
2018
2019–2023
2024–2028
2029–2033
2034–2038
2039–2042
Total Payments
Debt
Service
Payments
$ 209,205
187,034
184,801
156,693
156,698
632,161
534,587
371,584
169,175
55,176
$ 2,657,114
Principal
Payments
$ 124,585
108,740
111,545
88,690
93,005
372,210
364,170
280,940
138,575
50,175
$ 1,732,635
The fair value of outstanding revenue bonds is determined using currently published rates. The fair value is
estimated to be $1,827.4 million and $2,096.6 million at December 31, 2013 and 2012, respectively.
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Nebraska Public Power District
Revenue bonds consist of the following (000’s except interest rates):
December 31,
Interest Rate
General Revenue Bonds:
2003 Series A:
Serial Bonds 2013–2026
3.875% - 5.00%
2004 Series B Serial Bonds 2013
4.25% - 5.00%
2005 Series A Serial Bonds 2013–2025
3.50% - 5.25%
2005 Series B-1 Serial Bonds 2013–2015
5.00%
2005 Series B-2 Serial Bonds 2014–2016
5.00%
2005 Series C:
Serial Bonds 2013–2025, 2040
3.70% - 5.125%
Term Bonds
2026–2029
5.00%
2030–2034
4.75%
2035–2040
5.00%
2006 Series A:
Serial Bonds 2013–2025
4.00% - 5.00%
Term Bonds
2026–2030
5.00%
2031–2035
5.00%
2036–2040
4.375%
2036–2040
5.00%
2007 Series B:
Serial Bonds 2013–2026
4.00% - 5.00%
Term Bonds
2027–2031
4.65%
2032–2036
5.00%
2008 Series A Taxable Term Bonds 2013
5.14%
2008 Series B:
Serial Bonds 2013–2029
4.00% - 5.00%
Term Bonds
2030–2032
5.00%
2033–2037
5.00%
2038–2040
5.00%
2009 Series A Taxable Build America Bonds:
Term Bonds
2019–2025
6.606%
2026–2034
7.399%
2009 Series C Serial Bonds 2013–2019
3.00% - 4.25%
2010 Series A Taxable Build America Bonds:
Serial Bonds 2019–2024
3.98% - 4.73%
Term Bonds
2025–2029
5.323%
2030–2042
5.423%
2010 Series B Taxable Serial Bonds 2013–2020 2.25% - 4.18%
2010 Series C:
Serial Bonds 2013–2025
3.00% - 5.00%
Term Bonds
2026–2030
4.00%
5.00%
2026–2030
2011 Series A Serial Bonds 2013–2016
2.00% - 5.00%
2012 Series A Serial Bonds 2013–2034
3.00% - 5.00%
2012 Series B:
Serial Bonds 2013–2032
2.00% - 5.00%
Term Bonds
2033–2036
3.625%
2037–2042
3.625%
2012 Series C Serial Bonds 2013–2028
3.00% - 5.00%
2013 Series A Serial Bonds 2014–2033
3.00% - 5.00%
2013
$
Total par amount of revenue bonds
Unamortized premium net of discount
Less - current maturities of revenue bonds
Total revenue bonds
Nebraska Public Power District
$
28
28
—
—
22,840
29,180
52,780
2012
$
2,155
28,540
32,740
43,545
52,780
68,675
70,180
11,765
18,240
27,500
11,765
18,240
27,500
50,425
66,630
18,680
23,840
400
30,020
18,680
23,840
400
30,020
170,855
181,775
36,140
19,270
—
36,140
19,270
137,765
204,885
213,910
32,390
50,880
7,180
32,390
50,880
7,180
17,465
32,890
10,365
17,465
32,890
12,160
31,875
31,875
27,985
54,190
5,985
27,985
54,190
6,740
94,055
107,875
6,165
14,180
26,595
209,110
6,165
14,180
38,445
211,700
102,675
110,255
2,320
4,155
98,410
118,270
2,320
4,155
103,420
—
1,732,635
87,777
1,820,412
(124,585)
1,695,827
1,888,145
90,631
1,978,776
(256,680)
1,722,096
$
9. COMMERCIAL PAPER NOTES:
The District is authorized to issue up to $150.0 million of TECP notes. A $150.0 million line of credit expiring
August 1, 2014, is maintained with two commercial banks to support the sale of the TECP notes. The District had
$102.3 million of TECP notes outstanding at December 31, 2013 and 2012. The proceeds of the TECP notes
have been used to provide short-term financing for certain capital additions and for other lawful purposes of the
District. The effective interest rate on outstanding TECP notes was 0.2% for 2013 and 2012.
The $102.3 million of TECP notes outstanding at December 31, 2013 are anticipated to be retired by future
collections through electric rates and issuance of revenue bonds. The carrying value of the commercial paper
notes approximates market value due to the short-term nature of the notes.
The District anticipates renewing the TECP credit agreement prior to its August 2014 expiration.
10. LINE OF CREDIT AGREEMENTS:
The District has a line of credit of $150.0 million expiring August 1, 2014, that supports the payment of the
principal outstanding of the TECP notes. See Note 9 for additional information. At December 31, 2013 and 2012,
no amounts have been drawn on the line of credit.
11. REVOLVING CREDIT AGREEMENTS:
The District has entered into two revolving credit agreements authorizing the District to borrow up to
$150.0 million under a TERCA and up to $50.0 million under a TRCA. In 2012, the District amended these
revolving credit agreements for an aggregate amount up to $200.0 million, expiring on August 31, 2015, and are
maintained with a commercial bank to provide for these borrowings. The District had $149.4 million and
$148.6 million of TRCA outstanding at December 31, 2013 and 2012, respectively. The borrowings are to provide
short-term financing for certain capital additions and for other lawful purposes of the District.
The $149.4 million of TRCA outstanding at December 31, 2013 is anticipated to be retired by future
collections through electric rates and issuance of revenue bonds. The carrying value of the revolving credit
agreements approximates market value due to the short-term nature of the agreements.
12. LONG-TERM DEBT:
Long-term debt activity, net of current activity for the year ended December 31, 2013, was as follows (000’s):
Revenue bonds
Commercial paper notes
Revolving credit agreements
Total long-term debt activity
December 31,
2012
$ 1,722,096
102,300
148,555
$ 1,972,951
Increases
$ 128,804
—
20,650
$ 149,454
Decreases
$ (155,073)
—
(19,788)
$ (174,861)
December 31,
2013
$ 1,695,827
102,300
149,417
$ 1,947,544
Principal
Amounts
Due Within
One Year
$ 124,585
102,300
—
$ 226,885
13. ASSET RETIREMENT OBLIGATIONS:
The District has recorded an obligation for the fair value of its legal liability for the ARO associated with CNS,
various ash landfills at its two coal-fired power stations, removal of asbestos at the District’s various coal, gas,
and hydro generating facilities, polychlorinated biphenyls from substation and distribution equipment, and
underground storage tanks as well as abandonment of water wells. The total ARO liability recorded by the District
was $977.1 million and $930.2 million as of December 31, 2013 and 2012, respectively, and is included in the
Other Long-Term Liabilities section of the accompanying Balance Sheets.
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Nebraska Public Power District
The following table shows costs as of January 1, and charges to the ARO that occurred during the years
ended December 31, 2013 and 2012, and are included in Deferred Credits and Other Liabilities section of the
accompanying Balance Sheets as of December 31, (000’s):
For the Year Ended December 31,
2013
Balance, beginning of year
Accretion
Balance, end of year
$
$
930,178
46,904
977,082
2012
$
$
885,529
44,649
930,178
A significant amount of the ARO is funded by decommissioning funds of $533.7 million and $543.4 million as
of December 31, 2013 and 2012, respectively. See Note 3 for additional information.
At the time the liability for the asset retirement is incurred, ASC 410 requires capitalization of the costs to the
related asset. For the ARO existing at the time of adoption of ASC 410, the statement requires capitalization of
costs at the level that existed at the time of incurring the liability. These capitalized costs are depreciated over the
same period as the related asset. At the date of adoption, the depreciation expense for past periods was recorded
as a regulatory asset in accordance with ASC 980 because the District will be able to recover these costs in future
rates.
The initial liability is accreted to its present value each period. The District defers this accretion as a regulatory
asset based on its determination that these costs can be collected from customers. Accretion was $46.9 million
and $44.6 million for 2013 and 2012, respectively.
14. PAYMENTS IN LIEU OF TAXES:
The District is required to make payments in lieu of taxes, aggregating 5% of the gross revenue derived from
electric retail sales within the city limits of incorporated cities and towns served directly by the District. Such
payments totaled $10.1 million and $9.7 million for the years ended December 31, 2013 and 2012, respectively.
15. RETIREMENT PLAN:
The District’s Employees’ Retirement Plan (the “Plan”) is a defined contribution pension plan established by
the District to provide benefits at retirement to regular full-time and part-time employees of the District. At
December 31, 2013, there were 1,996 Plan members. Plan members are required to contribute a minimum of 2%,
up to a maximum of 5%, of covered salary. The District is required to contribute two times the Plan member’s
contribution based on covered salary up to $40,000. On covered salary greater than $40,000, the District is
required to contribute one times the Plan member’s contribution. Plan provisions and contribution requirements
are established and may be amended by the District’s Board of Directors. The District’s contribution was
$12.0 million for 2013 and 2012 of which $1.3 million and $1.2 million was accrued and in Accounts payable and
accrued liabilities for each of the years ended December 31, 2013 and 2012, respectively.
16. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS:
A. Plan Description The District administers a single-employer defined benefit healthcare plan that provides lifetime healthcare
insurance for eligible retirees and their spouses. Eligibility and benefit provisions are established by the District’s
Board of Directors. In addition, the District provides employees a $5,000 death benefit when they retire and
substantially all of the District’s retired and active employees are eligible for such benefit.
Nebraska Public Power District
30
30
B. Funding Policy The eligibility and contributions of the plan members and the funding policy of the plan is established and may
be amended by the District’s Board of Directors. The District, for employees hired on or prior to December 31,
1992, pays all or part of the cost (determined by retirement age) of certain hospital-medical premiums when these
employees retire. The District amended the plan effective January 1, 1993. Employees hired on or after
January 1, 1993, are subject to a contribution cap that limits the District’s portion of the cost of such coverage to
the full premium the year the employee retired or the amount at the time the employee reaches age 65, or the
year in which the employee retires if older than age 65. Any increases in the cost of such coverage in subsequent
years would be paid by the retired employee. The District amended the plan effective January 1, 1999.
Employees hired on or after January 1, 1999, are not eligible for postretirement hospital-medical benefits once
they reach age 65 or Medicare eligibility. The District amended the plan effective January 1, 2004, to provide that
employees hired on or after that date will not be eligible for postretirement hospital-medical benefits once they
retire. The District amended the plan effective July 1, 2007, to provide that any former employee who is rehired
will receive credit for prior years of service. The District further amended the plan effective September 1, 2007, to
provide that employees hired or rehired on or after that date must work five consecutive years immediately prior to
retirement to be eligible for postretirement hospital-medical benefits once they retire.
C. Annual OPEB Cost and Net OPEB Obligation The District’s annual Other Postemployment Benefits (“OPEB”) cost (expense) is calculated based on the
annual required contribution (“ARC”), an amount actuarially determined in accordance with the parameters of
GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to
cover the normal cost each year (or benefits earned in the current year) and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of
the District’s OPEB cost for the year, the amount actually contributed to the plan, and changes in the District’s net
OPEB obligation as of December 31, (000’s):
For the Year Ended December 31,
2013
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost
Contributions made
Increase in net OPEB obligation
Net OPEB obligation - beginning of year
Net OPEB obligation - end of year
2012
$ 35,030
5,583
(5,191)
35,422
(23,603)
11,819
111,656
$ 123,475
$ 33,627
4,658
(4,170)
34,115
(15,620)
18,495
93,161
$ 111,656
2011
$ 33,330
4,614
(4,009)
33,935
(21,018)
12,917
80,244
$ 93,161
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2013, 2012, and 2011 were as follows (dollar amounts in thousands):
Year
2013
2012
2011
Annual
OPEB Cost
$ 35,422
$ 34,115
$ 33,935
Percentage of Annual
OPEB Cost Contributed
66.6%
45.8%
61.9%
Net OPEB
Obligation
$ 123,475
$ 111,656
$ 93,161
D. Funded Status and Funding Progress In 2008, the District established an irrevocable trust to begin funding the unamortized OPEB obligation. Total
contributions to the plan in 2013 were $23.6 million which included $10.0 million paid to the trust and $13.6 million
for the cost of benefits. Total contributions to the plan in 2012 were $15.6 million which included $4.0 million paid
to the trust and $11.6 million for the cost of benefits. Total contributions to the plan in 2011 were $21.0 million
which included $10.0 million paid to the trust and $11.0 million for the cost of benefits. It is currently projected that
funding above the pay-as-you-go amount will remain at $10.0 million in 2014. The final funding will be determined
annually by the District’s Board of Directors. The trust is currently projected to be fully funded by 2033.
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Nebraska Public Power District
The Actuarial Accrued Liability (“AAL”) is the present value of benefits attributable to past accounting periods.
The AAL was $520.7 million, $498.5 million, and $427.7 million as of January 1, 2013, 2012, and 2011,
respectively. The AAL is presented in the table below based on the actuarial valuation as of January 1, (000’s):
2013
2012
2011
Actuarial
Unfunded Actuarial
Actuarial Value Accrued Liability
Accrued Liability
of Assets
(AAL)
(UAAL)
(a)
(b)
(b-a)
$ 30,781
$ 520,705
$ 489,924
$ 24,900
$ 498,485
$ 473,585
$ 15,086
$ 427,709
$ 412,623
Funded
Ratio
(a/b)
5.9%
5.0%
3.5%
Covered
Payroll
(c)
$ 187,378
$ 189,211
$ 189,428
UAAL to
Covered
Payroll
((b-a)/c)
261%
250%
218%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the
plan and the annual required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future.
E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point.
The actuarial methods and assumptions used include techniques that are designed to reduce the effects of
short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of the calculations.
In the January 1, 2012 actuarial valuation, which is the most recent actuarial study, the Unit Credit Actuarial
Cost method was used for 2013, 2012, and 2011. In 2013, the actuarial assumptions included an annual
healthcare cost trend rate of 8.5% initially, reduced by decrements to an ultimate rate of 4.6%. In 2012, the
actuarial assumptions included an annual healthcare cost trend rate of 8.1% initially, reduced by decrements to
an ultimate rate of 4.6%. In 2011, the actuarial assumptions included an annual healthcare cost trend rate of 7.2%
initially, reduced by decrements to an ultimate rate of 4.4%. The discount rate used for 2013 and 2012 was 5.0%
and for 2011 was 5.75%. The discount rate was based on the District’s return on internal investments used to
fund benefit payments blended with the expected return on assets of the OPEB Trust Fund. An inflation rate of
3.5% was also assumed for all three years. Amortization for the initial unfunded AAL was determined using a
closed period of 30 years and the level percentage of projected payroll method assuming 4.0% payroll growth
was used for all three years.
F. Market Value of Plan Investments The actuarial valuation of plan assets was based on market values as of January 1, 2012. The investments in
the OPEB plan include corporate and government debt, foreign and domestic stocks, mutual funds and cash. The
market value of plan assets was $48.3 million, $31.7 million, and $24.9 million at December 31, 2013, 2012, and
2011, respectively.
17. COMMITMENTS AND CONTINGENCIES:
A. Fuel Commitments The District has various coal supply contracts and a coal transportation contract with minimum future
payments of $520.0 million. These contracts expire at various times through the end of 2018. The coal
transportation contract is in place sufficient to deliver coal to the generation facilities through the expiration date of
the aforementioned contracts and is subject to price escalation adjustments.
B. Power Purchase and Sales Agreements The District has wholesale power purchase commitments with the Western Area Power Administration
through 2020 with annual minimum future payments of approximately $36.7 million. These purchases are subject
to rate changes.
Nebraska Public Power District
32
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Effective January 2004, the District entered into a participation power agreement (the “NC2 Agreement”) with
OPPD to receive 23.7% of the output of NC2, estimated to be 162 MW of the power from the 682 MW coal-fired
power plant constructed by OPPD. The NC2 Agreement contains a step-up provision obligating the District to pay
a share of the cost of any deficit in funds for operating expenses, debt service, other costs, and reserves related
to NC2 as a result of a defaulting power purchaser. The District’s obligation pursuant to such step-up provision is
limited to 160% of its original participation share (23.7%).
The District has entered into a power purchase agreement with Central for the purchase of the net power and
energy produced by the Kingsley Project during its operating life. The Kingsley Project is a hydroelectric
generating unit at the Kingsley Dam in Keith County, Nebraska with an accredited net capacity of 36 MW.
The District had a hydro power purchase agreement with Central through December 31, 2013, for the
purchase of the net power and energy produced by three hydroelectric plants (excludes the Kingsley Project)
owned and operated by Central. Accredited capacity of the three hydroelectric plants was 54 MW. This
agreement was not renewed.
The District has entered into power sales agreements with Lincoln Electric System (“LES”) for the sale to LES
of 30% of the net power and energy of Sheldon Station (“Sheldon”) and 8% of the net power and energy of Gerald
Gentleman Station (“GGS”). In return, LES agrees to pay 30% and 8% of all costs attributable to Sheldon and
GGS, respectively. Each agreement is to terminate upon the later of the last maturity of the debt attributable to the
respective station or the date on which the District retires such station from commercial operation.
The District has entered into a participation power sales agreement with KCP&L Greater Missouri Operations
Company (“KCPL”) for the sale to KCPL of 75 MW of accredited capacity from CNS through January 18, 2014.
The District had a participation power sales agreement with Heartland Consumers Power
District (“Heartland”) for the sale to Heartland of 45 MW of accredited capacity from CNS through December 31,
2013. This agreement was not renewed.
The District has entered into a participation power sales agreement with Municipal Energy Agency of
Nebraska (“MEAN”) for the sale to MEAN of the power and energy from GGS and CNS of 50 MW from January 1,
2011 through December 31, 2023.
As of December 31, 2013, the District had entered into power purchase agreements with seven wind facilities
having a total capacity of 435 MW. These agreements are for terms ranging from 20 to 25 years and require the
District to purchase all the electric power output of these wind facilities. The District has entered into power sales
agreements to sell 155 MW of this capacity to four other utilities in Nebraska over similar terms.
In addition, the District owns and operates the 60 MW Ainsworth Wind Energy Facility and has 20-year
participation power agreements to sell 28 MW to four other utilities.
The District has entered into a 25-year power purchase agreement with Steele Flats Wind Project, LLC to
purchase electric power from the 75 MW Steele Flats Wind Facility near Steele City, Nebraska which began
commercial operation on November 1, 2013. The District is required to take all the capacity and energy of the
Steele Flats Wind Facility for the first twenty years of operation and one percent of the capacity and energy for the
remaining five years.
The District has 20-year wholesale power contracts, with a term that expires December 31, 2021, with the
majority of its firm requirements wholesale customers to provide them with their total power and energy
requirements through 2007, after which the wholesale customer could level-off its power and energy purchases
through 2010 and thereafter could reduce its power and energy purchases up to 10% per year with at least three
years advance notice. On March 16, 2011, the District received notice from the City of Neligh stating that they
desire to terminate their wholesale power contract effective April 1, 2012. The City of Neligh is among the few firm
requirements wholesale customers who do not have wholesale power contracts with the previously described
20-year term.
The District is aware that four wholesale customers located in northeast Nebraska have made requests for
proposals from power suppliers other than the District. These customers currently represent 3% of Operating
Revenues. At this time, the District has received notice from three of the respective customers as to their intent to
level off or reduce the requirements under their current contract beginning in 2019. If a substantial number of
wholesale customers begin leveling off or reducing their requirements, the District would be required to increase
its rates to recover costs.
The District has entered into long-term PRO Agreements having initial terms of 15, 20, or 25 years with
79 municipalities for the operation of certain retail electric distribution systems. These PRO Agreements expire on
various dates between January 1, 2016 and May 1, 2033. These PRO Agreements obligate the District to make
payments based on gross revenues from the municipalities and pay for normal property additions during the term
of the agreement.
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C. Transmission Agreements The District is a member of the Southwest Power Pool (“SPP”), a regional transmission organization based in
Little Rock, Arkansas. Membership in SPP provides the District reliability coordination service, generation reserve
sharing, regional tariff administration, including generation interconnection service, network, and point-to-point
transmission service, and regional transmission expansion planning. The District was able to participate in SPP’s
energy imbalance market, a real-time balancing market that provides members the opportunity to have SPP
dispatch resources based on marginal cost, through February 2014. On March 1, 2014, SPP successfully
implemented its integrated market.
The District entered into a Transmission Facilities Construction Agreement effective June 15, 2009, with
TransCanada Keystone Pipeline, LP (“Keystone”). This agreement addresses the transmission facilities,
construction, cost allocation, payment, and applicable cost recovery for the interconnection and delivery facilities
required for the interconnection of Keystone to the District’s transmission system. Cost of the project was
$8.4 million and repayment by Keystone, over a ten-year period, began in July 2010 with a remaining balance due
the District of $6.1 million as of December 31, 2013.
The District entered into a second Transmission Facilities Construction Agreement effective July 17, 2009,
with TransCanada Keystone XL Pipeline, LP (“Keystone XL”). This agreement addresses the transmission
facilities, construction, cost allocation, payment, and applicable cost recovery for the interconnection and delivery
facilities required for the interconnection of Keystone XL to the District’s transmission system. The initial estimated
cost of the project was $52.9 million and was to be paid by Keystone XL over a ten-year period anticipated to
begin July 2013. However, the project was recently delayed due to routing concerns of the pipeline across the
Nebraska Sandhills. Adjustments to the facilities, project costs, and completion schedules will be made once the
final route is determined, which is unknown at the present time. Keystone XL remains responsible for all present
and future project costs. As of December 31, 2013, actual project costs totaled $12.2 million.
D. Cooper Nuclear Station Under the provisions of the Federal Price-Anderson Act, the District and all other licensed nuclear power plant
operators could each be assessed for claims in amounts up to $127.3 million per unit owned in the event of any
nuclear incident involving any licensed facility in the nation, with a maximum assessment of $19.0 million per year
per incident per unit owned. To satisfy this potential obligation, the District has submitted its most recent audited
financial statements to the Nuclear Regulatory Commission (“NRC”).
The NRC evaluates nuclear plant performance as part of its reactor oversight process (“ROP”). The NRC has
five performance categories included in the ROP Action Matrix Summary that is part of this process. As of
December 31, 2013, CNS was in the Licensee Response Column, which is the first or best of the five NRC
defined performance categories and has been in this column since the first quarter of 2012.
Since the earthquake and tsunami of March 11, 2011, that impacted the Fukushima Dai-ichi Plants in Japan,
the District, as well as the rest of the nuclear industry, has been working to first understand the events that
damaged the reactors and associated fuel storage pools and then look to any changes that might be necessary at
the United States nuclear plants. Of particular interest is the performance of the GE boiling water reactor with
Mark 1 containment systems in Japan and their on-site used fuel storage facilities. CNS utilizes this same
containment system; however, significant improvements to the design have been made over the life of the plant.
A NRC Near-Term Task Force Review of Insights from the Fukushima Dai-ichi Accident was published on
July 12, 2011 that included 12 recommendations for improvements for U.S. reactors. Subsequent to that report,
on October 18, 2011, the NRC approved seven of the Task Force recommendations for implementation. On
March 12, 2012, the NRC issued three orders to the U.S. nuclear industry as a result of the Fukushima Dai-ichi
event in Japan. The first order requires all domestic nuclear plants to better protect supplemental safety
equipment and obtain additional equipment as necessary to protect the reactor in the event of beyond design
basis external events. The second order requires nuclear plant operators of boiling water reactors like CNS to
upgrade an existing wetwell vent. On June 6, 2013, the NRC issued an order to require the addition of a drywell
vent to supplement the capabilities of this existing wetwell vent. This work is required to be completed no later
than the conclusion of the fall 2018 refueling and maintenance outage or December 31, 2018, whichever comes
first. The NRC continues to evaluate the possibility of requiring licensees to add a filter for both vents. The
third order requires nuclear plant operators to add reliable spent fuel pool water level instrumentation.
The NRC has also issued a request for information pertaining to re-evaluation of seismic and flooding
hazards, and a communications and staffing assessment for emergency preparedness.
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These actions are to be completed no later than prior to startup from CNS’s fall 2016 refueling and
maintenance outage or December 31, 2016, whichever comes first. Additional NRC orders and regulations
resultant from the Fukushima Dai-ichi event may be forthcoming. The specific impacts of any additional orders
and regulations on CNS have not yet been evaluated.
The District’s preliminary cost estimate for modifications and other mitigation strategies associated with
NRC’s Fukushima Dai-ichi-related orders, including any potential modifications associated with increased
requirements to add a filter on the new containment vents, is currently estimated to cost $78.1 million.
In October 2003, the District entered into an agreement (the “Entergy Agreement”) for support services at
CNS with Entergy Nuclear Nebraska, LLC (“Entergy”), a wholly-owned indirect subsidiary of Entergy Corporation.
The Entergy Agreement was for an initial term ending January 18, 2014, subject to either party’s right to terminate
without cause by providing notice and paying a termination charge. The agreement was subsequently extended,
effective January 1, 2010, to January 18, 2029. The Entergy Agreement requires the District to reimburse
Entergy’s cost of providing services, and to pay Entergy annual management fees. These annual management
fees were $17.4 million and $17.3 million for 2013 and 2012, respectively. In 2014, the annual management fee is
$18.4 million. Entergy is eligible to earn additional annual incentive fees in an amount not to exceed $4.0 million
annually if CNS achieves identified safety and regulatory performance targets. Entergy earned additional
incentive fees of $2.3 million, $0.8 million, and $0.3 million for 2013, 2012, and 2011, respectively. As part of the
agreement amendment, the overall compensation to Entergy under the support services agreement was
restructured such that certain private use issues that existed with the original agreement were eliminated.
CNS completed construction of a dry cask used fuel storage facility to support license renewal. The first
loading campaign to move used nuclear fuel from the used fuel pool into eight dry used fuel storage casks for onsite storage commenced in October 2010 and was completed in January 2011. A second fuel loading campaign
to move used fuel into an additional ten dry used fuel storage casks is planned to begin in the spring of 2014.
On November 29, 2010, the NRC formally issued a certificate to the District to commemorate the renewal of
the operating license for CNS for an additional 20 years until January 18, 2034. The issuance of this certificate by
the NRC marked the culmination of the six-year effort to reach this milestone. On January 18, 2014, CNS entered
the period of extended operation beyond the initial 40-year operating license term.
As part of a 1989 settlement of various disputed matters between GE and the District, GE has agreed to
continue to store at the Morris Facility the spent nuclear fuel assemblies from the first two full core loadings at
CNS at no additional cost to the District until the expiration of the current NRC license in May 2022 for the Morris
Facility. After that date, storage would continue to be at no cost to the District as long as GE can maintain the
NRC license for the Morris Facility on essentially the existing design and operating configuration.
As a result of the failure of the Department of Energy (“DOE”) to dispose of spent nuclear fuel from CNS as
required by contract, the District commenced legal action against the DOE on March 2, 2001. In accordance with
a settlement agreement between the District and the DOE that was executed on May 18, 2011, the District has
received $87.4 million from the DOE for damages from 2009 through 2012. The settlement agreement addresses
future claims through 2013. On January 13, 2014, the DOE extended the settlement agreement through 2016.
The District also reserves the right to pursue future damages through the contract claims process. A
corresponding deferred credit for these DOE receipts has been established in Settlement reimbursement of the
Deferred Inflows of Resources section of the accompanying Balance Sheets. The District plans to use the funds
to pay for future costs related to CNS.
E. Environmental As part of Environmental Protection Agency’s (“EPA”) nationwide investigation and enforcement program for
coal-fired power plants’ compliance with Clean Air Act including new source review requirements, on December 4,
2002, the Region 7 office of the EPA sent a letter to the District and three other electric utilities pursuant to
Section 114(a) of the Federal Clean Air Act requesting documents and information pertaining to GGS and
Sheldon. On April 10, 2003, Region 7 of the EPA sent a supplemental request for documents and information to
the District and the other three electric utilities. These EPA requests for information are part of an
EPA investigation to determine the Clean Air Act compliance status of GGS and Sheldon, including the potential
application of new source review requirements. The District provided the documents and information requested to
the EPA within the time allowed. As a supplement to the 2002 and 2003 requests, EPA Region 7 sent another
letter to the District on November 8, 2007, requesting additional documents and information pertaining to GGS
and Sheldon. The District provided a response to the new request within the time allowed and provided
supplemental information to the EPA in February and April 2011 in response to an EPA e-mail inquiry. In a
transmittal letter dated December 8, 2008, EPA Region 7 issued a Notice of Violation (“NOV”) under
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Section 113(a)(1) of the Clean Air Act alleging violations of pre-construction permitting requirements of the Clean
Air Act and the Nebraska State Implementation Plan for five projects undertaken from 1991 through 2001 at GGS.
Since receiving the NOV, the District has met twice with the government to discuss the NOV and possible future
actions. No further meetings are scheduled. In the event the government pursues litigation based on the NOV and
there is a court judgment finding the District violated Clean Air Act requirements, if upheld after appellate court
review, it can result in the requirement to install expensive air pollution control equipment that is the best available
control technology and the imposition of monetary penalties. The District is unable to predict what future costs
may be incurred with respect to the NOV.
On February 16, 2012, the EPA issued a final rule intended to reduce emissions of toxic air pollutants from
power plants. Specifically, the Mercury and Air Toxics Standard Rule will require reductions in emissions from
new and existing coal- and oil-fired steam utility electric generating units of heavy metals, including mercury,
arsenic, chromium, and nickel, dioxins, furans, and acid gases, including hydrogen chloride and hydrogen
fluoride. These toxic air pollutants are also known as hazardous air pollutants. Facilities will have until April 16,
2015 to comply with the rule with some opportunity for an additional year to achieve compliance. The District
expects to meet the new emissions limits with its existing pollution control equipment and the installation of
activated carbon injection equipment at GGS and Sheldon. Capital costs for such equipment are estimated to be
$7.0 million with annual operation and maintenance costs estimated to be $3.0 million.
Any changes in the environmental regulatory requirements imposed by federal or state law which are
applicable to the District’s generating stations could result in increased capital and operating costs being incurred
by the District. The District is unable to predict whether any changes will be made to current environmental
regulatory requirements, if such changes will be applicable to the District and the costs thereof to the District.
On August 19, 2002, the District received notice from the EPA identifying the District as a Potentially
Responsible Party (“PRP”) for liability associated with a former Manufactured Gas Plant (“MGP”) located in
Norfolk, Nebraska. The District is identified as a current owner of property located adjacent to the Norfolk
MGP operations. In 2002, the EPA asked identified PRPs to participate in negotiations for completing an
Engineering Evaluation/Cost Analysis (“EE/CA”). The identified PRPs met with the EPA Region 7 in October 2002
to discuss the site. No other activities between the District and the EPA had taken place related to this site from
the time of the October 2002 meeting with the EPA until June 2004. On June 14, 2004, PRPs received notice
from the EPA that the EPA was interested again in beginning efforts to complete an EE/CA to address this site.
The District has denied that it has any liability as related to the MGP operations, but has indicated to the
EPA willingness to cooperate with efforts to address the site. The District has reached an agreement in principal
with the other PRPs to resolve its potential liability for the EE/CA by entering into a settlement agreement under
which the District would contribute 10% of the costs of the EE/CA. The settlement agreement for the EE/CA has
been signed by all parties and was ratified at the February 2007 Board of Directors meeting. Phase I of the
EE/CA work began at the site in November 2007. On July 17, 2012, the EPA approved the final EE/CA.
Remediation under the preferred alternative is estimated to cost $2.8 million. In early 2013, the EPA contacted the
PRPs to begin efforts to put in place an Administrative Order of Consent for completion of the selected remedial
action. The District negotiated a settlement agreement with Centel (formerly known as Sprint) whereby the District
would allow access and use of portions of District property and the District would pay a one-time settlement
amount. The settlement does not have a material effect on the District. Centel agreed to the settlement terms and
the EPA also approved the agreement. The settlement agreement was signed by the District on August 1, 2013
and payment was made on August 9, 2013.
F. Other The District received written notice from the Internal Revenue Service (the “Service”) that the Service had
concluded that certain of the District’s General Revenue Bonds, 2009 Series A (Taxable Build America Bonds) did
not qualify for the 35% interest subsidy provided by the United States Treasury based on an interpretation by the
Service of the issue price of such Bonds to the public. While the District disagreed with the conclusion of the
Service, the District has agreed to resolve the matter by entering into a closing agreement with the Service and
paying $350,000 to the Service pursuant to the closing agreement. Based on the closing agreement, the District
may continue to claim credits with respect to the interest paid on the 2009 Series A Bonds and the Service has
agreed not to contest such credits on the basis of the Service’s conclusions referred to above.
In October 2013, the Service affirmed, pursuant to the requirements of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended, that the 35% interest subsidy provided by the United States Treasury on
the District’s General Revenue Bonds, 2009 Series A (Taxable Build America Bonds) and 2010 Series A (Taxable
Build America Bonds), will be reduced by 7.2%. This reduction in the interest subsidy will be applied to the
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Service payments made on or after October 1, 2013 through September 30, 2014, or intervening Congressional
action, at which time the reduction rate is subject to change. This loss of subsidy totals approximately $0.2 million.
In March 2013, the District initiated a voluntary early retirement incentive program (“program”) to all regular,
full-time employees, excluding senior management, who meet certain retirement-eligible criteria. Approximately
575 District employees were eligible for the program and 110 District employees accepted the offer. Their last day
of employment was no later than June 30, 2013. Those employees who participated in the program received
six months of salary in one, lump sum payment. Total cost of the program was $6.0 million.
18. LITIGATION:
A number of other claims and suits are pending against the District for alleged damages to persons and
property and for other alleged liabilities arising out of matters usually incidental to the operation of a utility, such
as the District. In the opinion of management, based upon the advice of its General Counsel, the aggregate
amounts recoverable from the District, taking into account estimated amounts provided in the financial statements
and insurance coverage, are not material as of December 31, 2013.
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1414 15th Street / P.O. box 499 / Columbus, NE 68602-0499 / 1-800-282-6773 / www.nppd.com