2011-2012 - NMPP Energy

2011-12
NMPP Energy
Annual Report
INSIDE THIS REPORT
NMPP Energy........................... 1
Executive Director Letter............ 2
NMPP...................................... 3
MEAN...................................4-5
NPGA®.................................... 6
ACE......................................... 7
Our product is
ENERGY
Our mission is
SERVICE
Our power is
PEOPLE
NMPP Energy is a nonprofit, member-owned organization providing electricity,
natural gas and utility related services to nearly 200 member communities across
six Midwestern and Mountain states. NMPP Energy promotes the benefits of joint
action and local utility control among its member communities. NMPP Energy
consists of four entities:
™™ Nebraska Municipal Power Pool (NMPP)
Utility-related services
™™ Municipal Energy Agency of Nebraska (MEAN)
Wholesale electric supply
™™ National Public Gas Agency (NPGA®)
Wholesale natural gas supply
™™ Public Alliance for Community Energy (ACE)
Retail natural gas choice
North
Dakota
Wyoming
Visit
www.nmppenergy.org/annual_
report
to access this report and the
complete audited financial
statements for each entity.
Nebraska
Colorado
Kansas
Iowa
NMPP Energy
Letter from the Executive Director
As a multi-organizational joint-action agency, NMPP Energy is involved in complicated
industries facing many challenges. At the end of the day, what we do boils down to fulfilling basic needs many outside the industry take for granted. Together with our members,
we keep the lights on, the refrigerator cold and the room temperature comfortable year
round for the end-use consumer. And we strive to do it in a way that is as reliable and
economical as possible while taking steps to mitigate environmental impacts. Along with
performing these vital tasks, we also provide related services to our members – many of
which are becoming more critical as costs rise and environmental regulations increase.
In this report, I hope you find useful information as you read about some of the highlights
and successes from the 2011-12 fiscal year. There was much to celebrate among our four
organizations:
J. Gary Stauffer
NMPP Energy Executive Director
• NMPP continued to offer an array of products and services to members geared
toward addressing ever-increasing vital strategies such as energy efficiency and rate
design studies as well as ongoing education and training;
• MEAN increased its baseload electric supply as the Whelan Energy Center Unit
2 near Hastings, Neb., began commercial operation. It also signed agreements for
additional renewable energy utilizing wind and landfill gas;
• MEAN sold its portion of Energy Square, paving the way to building a new
facility to house the NMPP Energy organizations. The move will save significant
money over the long term;
• NPGA marked its 20th anniversary in supplying wholesale natural gas; and
• ACE held strong in the always competitive Nebraska Choice Gas program by
providing beneficial competition while retaining its market share.
The organizations of NMPP Energy are not immune to challenges all utilities across the
nation face in going forward under increased regulations and uncertainties. I’m confident
no group stands a better chance to face these challenges than our resilient membership.
It has done so successfully since a group of 19 communities banded together in 1975 to
form NMPP.
Thank you for taking the time to read about some of our accomplishments this past year –
I hope you find it informative.
J. Gary Stauffer
NMPP Energy Executive Director
2
Nebraska Municipal Power Pool - NMPP
NMPP member community Alliance, Neb.
Highlights of the Year:
NMPP is dedicated to
preserving local control
and providing a variety
of services to its member
communities in the areas of:
»»Electric
distribution
efficiency and
reliability
»»Utility
and business
software management
»»Financial
planning cost
of service/rate studies
»»Utility
training and
education
Membership: NMPP’s membership
included 190 communities in six
states. Visit
www.nmppenergy.org/nmpp/
members to see a list of communities.
Revenues by Type
• Staff completed 54 Financial Planning
Cost of Service/Rate Design Studies.
• In its second year, NMPP’s net metering
service was used by 10 utilities to
get assistance in complying with net
metering laws.
• Staff performed 88 energy audits in
communities served wholesale power
by the Municipal Energy Agency
of Nebraska and conducted 16
distribution system infrared audits.
• NMPP coordinated regularly scheduled
utility training sessions for four
regional groups with 34 participating
municipalities.
• The PowerManager® Value Support
Plan was used by155 participants
using NMPP and Salt Creek Software
programs;
• Staff assisted NMPP/MEAN
communities by completing various
required Department of Energy and
Nebraska Department of Environmental
Quality forms to meet regulatory clean
air and emissions compliance.
Education and Development
• A Financial Planning Cost of Service
and Retail Rate Design seminar for
members and non-members was
organized in partnership with the
$577,000
For the Year
Ended March 31, 2012
American Public Power Association.
• A workshop with regional utility partners
was held for members and business
owners on managing energy costs.
• Efforts began to provide the Federal
Reserve Fiscal Impact Tool to MEAN
communities. The tool shows the
projected effects of economic
development efforts on local
government costs and revenues.
• Community and economic development
successes included:
οο Assisting with the completion of
the Northeast Colorado Strategic
Energy Plan;
οο Continued involvement with business
recruitment and business retention
and expansion surveys;
οο Assessment of industrial/business
development sites; and
οο Assisting with regional
entrepreneurship program
promotion.
• Working with the Municipal Energy
Agency of Nebraska, staff worked
with member communities to secure
grant funding in the areas of energy
efficiency, community development and
infrastructure improvements, business
start-ups and expansions and valueadded production.
Visit www.nmppenergy.org/services for a full listing of NMPP services.
$291,000
$208,000
$82,000
$107,000
$33,000
Member
Dues
Billable
Services
Software Software Equipment
Sales Maintenance Sales
Other
NMPP Utility Services Representative Bob Meade performs an infrared audit in Fairbury, Neb.
3
Municipal Energy Agency of Nebraska - MEAN
The Whelan Energy Center Unit 2 (at left) near Hastings, Neb.
Highlights of the Year:
• MEAN’s long-term participants
expanded to 53 as Plainview,
Neb., converted to a long-term
power supply agreement.
• The Whelan Energy Center
Unit 2 near Hastings, Neb.,
began commercial operation
in May 2011. MEAN receives
95 megawatts from the coalfired power plant, including a
15 megawatt assignment from
Hastings Utilities. Four other
regional utilities share output from
the plant.
• MEAN completed refunding/
refinancing all of the outstanding
2002 Series A and a portion
of the outstanding 2003 Series
A bonds of approximately $64
million. This will save MEAN
approximately $8.7 million in
present value savings over the life
of the bonds.
MEAN provides wholesale
electric supply and related
services to participating
communities, including
resource and transmission
management and
advocacy.
Membership: MEAN served 68
participants in Colorado, Iowa,
Nebraska and Wyoming.
Visit
www.nmppenergy.org/mean/
members to see a list of
communities.
Long-Term Debt
(millions)
2002A
2010
$16.9
$84.2
2011
$15.5
$84.0
2012
4
$23.6
$76.8
2003A
2009A
2012A
$78.7
$77.8
$63.9
• The MEAN board of directors approved
selling MEAN’s portion of Energy
Square and building a new facility
in southeast Lincoln. The new facility,
which will house all the organizations
of NMPP Energy, is expected to save
approximately $3 million in operating
costs over 30 years.
ENERGYsmart Activities
MEAN completed the third year of its
ENERGYsmart
Managing Your Energy Costs
commercial
Workshop
lighting
program.
There were
84 completed
projects in the
ENERGYsmart
commercial
lighting
program
for a total
of $72,055
in rebate applications. There were
approximately 3,200 MWh’s in
annual energy savings overall since
the start of the program.
OCT. 26, 2011
GERING, NEB.
This is a joint partnership of public power
entities focusing on energy efficiency and
how it relates to your business or utility.
This is for business owners and city/utility
employees to come find out:
•
•
•
•
SPONSORS
What is happening in the industry?
Where are your costs going?
What new technologies are available?
What can you do about it?
Come find out this October 26 at the
Gering Civic Center in Gering, Neb.
Lunch will be provided!
Please RSVP to Andrew Ross by e-mail at
[email protected] or
call (800)234-2595 by Oct. 21, 2011
There were 70
refrigerators/
freezers
recycled
through the
ENERGYsmart
refrigerator
recycling
program.
9:00 a.m. to 1:30 p.m.
Gering Civic Center
REFRIGERATOR
RECYCLING
PROGRAM
AS K YOUR LOCAL UTILIT Y F OR DETAILS
YOUR LOCAL MUNICIPAL UTILITY TOGETHER WITH
THE MUNICIPAL ENERGY AGENCY OF NEBRASKA (MEAN)
Municipal Energy Agency of Nebraska - MEAN
Renewable Projects
•MEAN signed a 20-year agreement for
six megawatts from a landfill gas project
near Mitchellville, Iowa. The project is
expected online in the spring of 2013.
MEAN Resource
Mix
Nuclear
Wind/
4%
Other
Oil/Gas
9%
22%
Legislative and Regulatory Issues
•MEAN supported and passed two bills
in the Nebraska Legislature which saved
Interlocal agencies substantial money.
LB 155 gave joint entities the same
authority as power districts regarding
sealed bids for electric generation
facility contracts by removing the
requirement for taking sealed bids for
certain operational costs. LB 156 keeps
a 400-ton cap on emission fees for
certain municipalities with mid-sized
electric generation facilities.
•MEAN intervened in several Federal
Energy Regulatory Commission (FERC)
dockets during the year to protect Iowa
and Wyoming members regarding
transmission issues and fair rates.
Industry Challenges
•The wholesale power market continued
to be filled with challenges and
uncertainties for MEAN and other
regional utilities. Cost factors, including
environmental regulations and wholesale
power market conditions, out of the
control of individual utilities, continued
to put upward pressure on rates.
•The MEAN board of directors approved
a rate adjustment of 7.35 percent for
long-term power requirements and midterm participants for 2012-13. MEAN’s
rates remained among the lowest in the
region.
Hydro
20%
Coal
45%
Composition of Electric Energy Sales
Year Ended March 31, 2012
Total of $159.9 (Millions)
Long-term total
requirements
$84.2
Interchange sales
$28.5
Market based
firm sales
$7.1
Service power
$9.7
Limited-term
total requirements
$30.4
MEAN Kimball Wind Project, Kimball, Neb.
5
National Public Gas Agency - NPGA
NPGA member community Stromsburg, Neb.
Highlights of the Year:
NPGA is a member-based
association of municipal
utilities formed to gain
dependable gas supply
management and economy
of scale to acquire
reliable, economical
natural gas for member
communities and their
citizens.
Membership: NPGA served
wholesale natural gas supply to
23 member and non-member
communities in Nebraska, Kansas,
Colorado, Oklahoma, Missouri and
Illinois. NPGA membership included
14 communities in Colorado,
Kansas and Nebraska.
NYMEX Settlement -10 Year
Legal/Regulatory Issues
• NPGA marked its 20th anniversary,
forming in 1991 with charter members
Superior, Falls City, Central City and
Nebraska City.
• NPGA’s rates to members for the fiscal
year were approximately 5-10 percent
lower than the previous year. Due to
projected natural gas futures prices,
rates are expected to be lower in
2012.
• The process of updating Member Gas
Supply Agreements began in 2011. All
Member Gas Supply Agreements end
in 2015, so staff and the NPGA board
of directors will be working the next
couple years through the process.
• NPGA continued to be active and
seek partnerships at the regional and
national level to seize opportunities
if economically beneficial. NPGA
participates in the Public Gas Partners,
serving on the PGP Operating
Committee and attending the PGP
meeting in Oklahoma in October.
• A slightly more aggressive hedging
strategy that extended locking in
natural gas beyond two years allowed
NPGA to benefit from lower prices and
added a layer of rate stability.
• NPGA was in the second year of
challenging the Kansas gas tax on
storage with a small group of natural
gas shippers. The matter is currently
before the Kansas Appeals Court and a
decision is expected in 2012.
• The Federal Energy Regulatory
Commission settled the Kinder Morgan
Interstate Gas Transmission case
with reductions to the NPGA Kinder
Morgan shippers in several areas and
a commitment to return with a rate case
in the next five years.
National Market Overview
• Wholesale natural gas market spot
prices remained low throughout the
year. Spot natural gas prices in most
areas of the United States fell slightly
from the previous year. Prices at the
Henry Hub in Louisiana fell 9 percent
to about $4 per million British thermal
units in 2011, the second lowest
annual average price since 2002,
according to the Energy Information
Administration. The major causes
of lower prices were a recovering
economy and large domestic supply.
$14
$/MMBtu
12
10
8
6
4
2
April-02
6
April-03
April-04
April-05
April-06
April-07
April-08
April-09
April-10
April-11
April-12
Source: WSJ Online
Public Alliance for Community Energy - ACE
ACE distribution funds were used to add pathways around Legion Park Pond in Sidney, Neb.
Highlights of the Year:
ACE is a retail natural
gas supplier with the
core mission of ensuring
competition in the
Nebraska Choice Gas
Program to provide the
best possible pricing for
residential and commercial
customers as well as
advocacy for all retail
natural gas customers and
municipal members.
• ACE secured nearly 24,000 accounts
to remain holding a 30 percent market
share during the April 2011 Choice
Gas selection period.
• A successful new pricing option, ACE
WeatherShield, was introduced to
customers. ACE WeatherShield is an
all-inclusive fixed monthly rate that can
be locked in for one or two years. The
pricing option was selected by more
than 1,700 customers in its first year.
• ACE again had the lowest rollover
rates of all the suppliers, which saved
many customers hundreds of dollars
compared to other suppliers.
2011 Choice Gas Rollover Rates
(Per therm)
Membership: ACE’s membership
included 71 Nebraska communities.
Visit www.aceenergy.org/members
to see a list of communities.
Asgard
OneOK
SGES
ACE
Central
$0.800
$0.733
$0.799
$0.695
Western
$0.800
$0.649
$0.749
$0.638
Source: Nebraska Public Service Commission
• The ACE board of directors voted
to return $150,000 in revenue to
its members communities. Including
this year’s distribution return, ACE
has returned nearly $1 million to its
Nebraska member communities since
1998.
Customer Advocacy
• ACE intervened in a general rate case
filed by SourceGas Distribution with the
Nebraska Public Service Commission
(PSC). By intervening, ACE kept its
members informed about the impact of
the case to customers.
Total Rollover Customers
Asgard
OneOK
SGES
ACE
Total
2010
2011
7,593
8,399
9,993 10,355
38,360 37,212
24,216 23,883
80,432 79,849
Source: SourceGas Distribution LLC
Marketing Efforts
• The marketing partnership between ACE and its member communities continued
to be strong as 70 of 71 member communities participated in various marketing
activities. ACE continued its social media marketing, reaching customers through
Facebook and Twitter.
• ACE was successful signing up accounts for its MarketShieldPlus pricing option
as more than 650 commercial selections signed agreements before the selection
period.
• In partnership with the Nebraska Association of School Boards, ACE developed
its CJUMP program (Choice Joint Utilities Management Program) for natural gas
supply. There were 37 school districts in the program.
7
NMPP Energy
8377 Glynoaks Drive
Lincoln, NE 68516
Ph: (402) 474-4759
(800) 234-2595
Fax: (402) 474-0473
www.nmppenergy.org
Nebraska Municipal Power Pool
on