An Energy Conversion: Making Renewable Energy America’s Energy Sponsored by: U.S. Congressman Jeff Fortenberry and the University of Nebraska - Lincoln Alan L. Dostal Nebraska Public Power District

2 NPPD’s Renewable Energy History NPPD has a rich history in the use of hydropower North Platte Hydro - the largest NPPD-owned hydro in terms of capacity, the North Platte hydro has been operating since 1937 Spencer Hydro - Situated in northern Nebraska on the Niobrara River, the Spencer hydro has been operating since 1927 Kearney Hydro - The Kearney hydro has been in operation since 1886

3 NPPD’s Renewable Energy History Springview Wind Turbines In 1998 NPPD joined other Nebraska utilities to determine the efficiency and reliability of wind generation in Nebraska In 1998 NPPD joined other Nebraska utilities to determine the efficiency and reliability of wind generation in Nebraska The project was completed through the combined efforts of NPPD, LES, MEAN, the City of Grand Island, the City of Auburn, KBR Rural Public Power District, the DOE and EPRI The project was completed through the combined efforts of NPPD, LES, MEAN, the City of Grand Island, the City of Auburn, KBR Rural Public Power District, the DOE and EPRI The two wind turbines have a maximum capacity of 1.5 megawatts The two wind turbines have a maximum capacity of 1.5 megawatts

4 NPPD’s Renewable Energy History Ainsworth Wind Energy Facility The Facility consists of 36 wind turbines each rated at 1.65 megawatt turbine size for an actual nameplate capacity of 59.4 megawatts The Facility consists of 36 wind turbines each rated at 1.65 megawatt turbine size for an actual nameplate capacity of 59.4 megawatts The Nebraska Power Review Board and NPPD’s Board of Directors approved the project in August 2004 The Nebraska Power Review Board and NPPD’s Board of Directors approved the project in August 2004 Installation of the facility’s 36 wind turbines was complete on Aug. 1, Installation of the facility’s 36 wind turbines was complete on Aug. 1, Commercial operation of the facility began Sept. 15, Commercial operation of the facility began Sept. 15, 2005.

5 NPPD Energy Center Services Support for Ethanol Industry NPPD can provide coal and operate coal-fired boilers for ethanol plant operators NPPD can provide coal and operate coal-fired boilers for ethanol plant operators Contract with Mid America Bio Energy & Commodities for such services Contract with Mid America Bio Energy & Commodities for such services Ground breaking on December 19, 2005, for the Madrid, Nebraska facility Ground breaking on December 19, 2005, for the Madrid, Nebraska facility Ground breaking on April 24, 2006 for a second, identical ethanol project in Cambridge, Nebraska Ground breaking on April 24, 2006 for a second, identical ethanol project in Cambridge, Nebraska

6 Methane Recovery - Use of Alternative Fuels OLean Energy Facility, owned and operated by Danny Kluthe of Dodge, Nebr., is the first methane recovery project in Nebraska that uses animal waste as a renewable energy source to generate electricity The generator will produce up to 549,000 kilowatt-hours of electricity annually. This would power approximately 35 homes for one year based on the state of Nebraska’s average consumption

7 New Initiatives Clean Renewable Energy Bonds (CREBs) CREBs are tax credit bonds created by the Energy Tax Incentive Act of The Act provides for $500 million in “interest free” financing for governmental authorities for qualifying projects through the use of tax credits in lieu of interest for investors Qualifying projects include among others: Wind Wind Hydropower Hydropower

8 Potential CREB Funded Projects On April 26, 2006 NPPD submitted applications for: Expansion of the Ainsworth Wind Energy Facility by an additional 15 MW Expansion of the Ainsworth Wind Energy Facility by an additional 15 MW Installation of a small hydropower facility at the Gerald Gentleman Station circulating water outfall structure Installation of a small hydropower facility at the Gerald Gentleman Station circulating water outfall structure Potential output is estimated at 3.6 MW

9 Additional Options for NPPD Ongoing discussions with potential third party owners, operators: 40 MW, expect 44% capacity factor 40 MW, expect 44% capacity factor 20-year Power Purchase Agreement 20-year Power Purchase Agreement Outside Nebraska but near an NPPD transmission line 30 MW, expect 40% capacity factor 30 MW, expect 40% capacity factor 25-year Power Purchase Agreement 25-year Power Purchase Agreement

10 NPPD Build at new GREENFIELD Site Order of Magnitude estimate for NPPD construction at a Greenfield site using an adjusted cost derived from the Ainsworth Build-out cost Order of Magnitude estimate for NPPD construction at a Greenfield site using an adjusted cost derived from the Ainsworth Build-out cost 40 MW, 40-44% Capacity Factor 40 MW, 40-44% Capacity Factor Near NPPD Transmission System Near NPPD Transmission System Financed with tax-exempt bonds for 20 years at 5% interest Financed with tax-exempt bonds for 20 years at 5% interest Additional Options for NPPD

11 Renewable Production Incentive (REPI) Credits $??.00 per MWhr. (when funded) $??.00 per MWhr. (when funded) Renewable Energy Production Tax Credit (PTC) $19.00 per MWhr. $19.00 per MWhr. Not available to state and local governments and nonprofit electrical cooperatives Not available to state and local governments and nonprofit electrical cooperatives Renewable Production Incentives and Credits

12 Renewable energy certificates (RECs) or “Green” Tags $1.00 up to $5.00 per MWhr. $1.00 up to $5.00 per MWhr. LB 872 Mercury Cap & Trade/Renewable Tax Credit Credit per MWhr. – 75 cents 2010, 50 cents 2013, 25 cents 2018 per MWhr Credit per MWhr. – 75 cents 2010, 50 cents 2013, 25 cents 2018 per MWhr Maximum of $400,000 renewable tax credit payout Maximum of $400,000 renewable tax credit payout Renewable Production Incentives and Credits

13 NPPD’s Domestic Energy Research and Application Initiative Mission To learn how to use domestic energy resources in a clean, low-cost way to maintain our standard of living for our children and grandchildren. To learn how to use domestic energy resources in a clean, low-cost way to maintain our standard of living for our children and grandchildren. Consistent with NPPD’s Vision NPPD Board adopted Charter on October 14, 2005

14 Domestic Energy Alternatives Alternative Fuels Energy efficiency to include energy conservation Wind development and utilization Clean coal alternatives Nitrogen and carbon sequestration BiomassSolar Other opportunities as identified Domestic Energy Research And Application Initiative

15 Utility Initiative Participation Hydrogen Utility Group Eleven Utility Participants Eleven Utility Participants Four sponsoring organizations Four sponsoring organizations LB 139 allows any public power district to participate in this area LB 139 allows any public power district to participate in this area Plug-In Partners Participation A national grass-roots initiative to demonstrate to automakers that a market for flexible-fuel Plug-in Hybrid Electric Vehicles exist today A national grass-roots initiative to demonstrate to automakers that a market for flexible-fuel Plug-in Hybrid Electric Vehicles exist today

16 Other Activities NPPD is Supporting Application for a U.S Department of Energy (DOE) sponsored Feasibility Study of Hydrogen Production at Existing Nuclear Power Plants. Application for a U.S Department of Energy (DOE) sponsored Feasibility Study of Hydrogen Production at Existing Nuclear Power Plants. Project Scope: Provide technical/economic performance data on currently available technologies Provide technical/economic performance data on currently available technologies Conduct assessments to determine the best system for large scale production of hydrogen at existing nuclear plants Conduct assessments to determine the best system for large scale production of hydrogen at existing nuclear plants Domestic Energy Research and Application Initiative

17 Domestic Energy Research and Application Initiative Other Activities NPPD is Supporting "Nebraska - Kansas Demonstration of Enhanced Oil Recovery and Value-Added Carbon Sequestration from Biofuels (Ethanol) Production" project proposal submitted by the Center for Research, Inc., at the University of Kansas to the U.S. Department of Energy University of Nebraska - Lincoln supports this project

18 Domestic Energy Research and Application Initiative Other Activities NPPD is Supporting "Tools for Managing Water Resources in the Great Plains" project proposal being submitted by the University of Nebraska - Lincoln for consideration of Fiscal Year 2007 Congressional Earmark funding This project is not sponsored by the Nebraska Center for Energy Sciences Research; it is consistent with the Chartered direction for the new Center and warrants the District's support

19 Domestic Energy Research and Application Initiative Other Activities NPPD is Supporting NPPD entered into an agreement with UNL on April 1, 2006 to establish the Nebraska Center for Energy Science Research Five year agreement Five year agreement $5.0 million investment over the five year term $5.0 million investment over the five year term Mission Statement of the Center To conduct energy research that produces new technologies, processes and systems that provide new or significantly enhanced energy sources and improve the quality of life and economic opportunity for all Nebraskans To conduct energy research that produces new technologies, processes and systems that provide new or significantly enhanced energy sources and improve the quality of life and economic opportunity for all Nebraskans

20 Public Power and Public Education Come Together

21 Thank You