Will Municipal Energy Agency of Nebraska remain reliant on coal?

By Joe Smyth | [email protected] | @joesmyth

A wholesale power provider for 13 Colorado cities and towns generates most of its power from coal - but will that still be true in 2030? 

That's one of the key the questions raised in a report published last month by Sustainable Development Strategies Group, ​"A Renewable Energy Future for Colorado Communities Served by the Municipal Energy Agency of Nebraska."

The report examines the Municipal Energy Agency of Nebraska (MEAN), which sells wholesale power to dozens of towns and cities in Nebraska, Wyoming, Iowa, and Colorado. Sustainable Development Strategies Group (SDSG), a non-profit research group based in Gunnison, Colorado, focused on the 13 municipalities in Colorado that buy power from MEAN. The report examines MEAN's power supply mix, policies, and contracts in the context of a transition to renewable energy.

One striking finding in the SDSG report: coal accounted for 61% of MEAN's resource mix in 2017, according to its 2017 Integrated Resource Plan (IRP). And in contrast to major power suppliers for other Colorado towns and cities like Platte River Power Authority and Xcel Energy, MEAN expects that coal will remain a large portion of its energy mix, and even increase slightly to 64% by 2030.

Images of MEAN resource mix in 2017 and 2030, from MEAN 2017 Integrated Resource Plan

In an email, a spokesperson for MEAN responded to the report by clarifying that "MEAN is not pursuing additional coal resources. In fact, the IRP’s conclusion – directed by member owners’ input, was to place a priority on future generation resources that incorporate additional renewable energy."

The MEAN spokesperson also said that the SDSG report "doesn’t tell the whole story regarding MEAN’s power resource portfolio," noting that the IRP shows that MEAN's capacity resource mix is expected to decline during the same period.

But the IRP makes clear that MEAN expects that coal will still account for 39% of its capacity resource mix in 2030, down slightly from 42% in 2017. MEAN acknowledges in the IRP that "A large portion of MEAN’s energy is generated by coal resources, in 2017 and in 2030."

MEAN has taken some recent steps to increase its renewable energy portfolio. In 2018, the power provider upgraded its Kimball Wind Project in western Nebraska with larger wind turbines, boosting it from 10.5 megawatts to 30 megawatts.

“As rural communities continue to manage decreasing budgets, projects like the Kimball wind farm can provide a valuable stream of long-term tax revenue to support school and government services,” said Larry Engstrom, chairman of the Kimball County Commissioners. 

Nebraska is among the 15 states with the best wind energy resources, which a 2017 Moody's Investors Service report found could generate electricity from new wind power projects at prices well below the average costs of operating coal fired power plants.

Image from Moody's Investors Service March 2017 report: Utilities increasingly adding low cost wind power to rate base, leaving inefficient coal plants at risk

Colorado towns and cities also face restrictions on local renewable energy development
Most electric cooperatives in Colorado face limits on local renewable energy development, because of their contracts with Tri-State Generation and Transmission Association. The SDSG report details how the towns and cities that buy power from MEAN also faces limits on local energy projects, following a 2005 decision by MEAN to place a moratorium on new generation.

But MEAN has also made exceptions to that policy - most notably, the city of Aspen is a member of MEAN, but was able to reach its 100% renewable energy goal in part by negotiating with MEAN.

SDSG commended Aspen, and urged the city to share its experience with other MEAN members: "We hope Aspen will share its experience with other towns and cities in the MEAN system. We hope that Aspen will increasingly be a voice of leadership among the Colorado MEAN communities."

​Another MEAN member, the city of Wray in eastern Colorado, also generates a portion of its own power needs with a wind turbine owned by the Wray school district. The Wray wind project was developed before the city joined MEAN.

The SDSG report argues that this approach - a moratorium, but with exceptions - leads to uncertainty among municipalities: "In a number of cases, municipal officials expressed uncertainty about what they have to do to obtain an exception or the grounds on which one would be allowed."

Thirteen towns and cities in Colorado buy electricity from MEAN, most in northeastern Colorado: Fort Morgan, Wray, Yuma, Holyoke, Julesburg, Haxtun, and Fleming. The city of Lyons also buys electricity from MEAN, along with 5 municipalities in western Colorado:​ Glenwood Springs, Aspen, Gunnison, Delta, and Oak Creek.

Map of Colorado municipalities that buy power from MEAN, from Sustainable Development Strategies report

Further Reading:

Sustainable Development Strategies Group: ​A Renewable Energy Future for Colorado Communities Served by the Municipal Energy Agency of Nebraska

Municipal Energy Agency of Nebraska: 2017 Integrated Resource Plan

North American Wind Power: GE-Powered Kimball Wind Project Begins Operations In Nebraska

Colorado towns and cities are helping push utilities to embrace renewable energy