Omaha Public Power District looking for up to 400 MW of renewables

Source: By Matthew Bandy, SNL • Posted: Thursday, July 21, 2016

Nebraska utility the Omaha Public Power District is looking for bidders to provide the utility between 1 MW and 400 MW of renewable power capacity, according to a request for proposals released by OPPD July 18.

The RFP would lead to a doubling of the utility’s level of renewable power. As of the end of 2015, OPPD had 416.5 MW of wind and landfill gas capacity, according to a company fact sheet. Much of that wind power comes from participation agreements OPPD has with independently owned wind farms such as NRG Energy Inc.‘s Broken Bow Wind facility in Nebraska. OPPD is also expecting to buy 400 MW from Berkshire Hathaway Energy‘s Grande Prairie wind facility, which is under construction in Nebraska. The utility directly owns just 7.1 MW of renewable capacity, mostly biomass, according to S&P Global Market Intelligence data.

The RFP calls for power from a renewable energy project that can begin commercial operations between June 1, 2018, and Dec. 31, 2020. OPPD is seeking wind projects from 40 MW to 400 MW and solar projects from 1 MW to 100 MW. Notices of intent to bid are due July 22 and proposals are due Aug. 5.Respondents will be selected by Oct. 28.

OPPD is interested in signing a contract with a 10-year term length, according to a data form released along with the RFP.

The utility has had recent motivation to find new sources of power due to its board of directors’ June vote to retire the Fort Calhoun nuclear plant because the reactor was operating at a loss. Fort Calhoun provides about 26% of OPPD’s energy, compared to 27% from wind and 44% from coal, according to figures presented at the meeting in which the board decided to close Fort Calhoun.

But the goal of the RFP is not “solely” to replace Fort Calhoun, according to OPPD spokesman Mike Jones. The purpose is also to “gauge” the market for renewables due to the fact that the federal production tax credit for wind and the investment tax credit for solar are phasing out in several years.

“The extension of safe harboring of projects has created market opportunities,” Jones said. The U.S. Internal Revenue Service recently clarified that wind projects trying to qualify for the production tax credit will be subject to a four-year safe harbor, meaning they will have four years to complete construction to qualify for the level of the credit that was in place in the year they began construction. Although the credit starts phasing down in value after 2016 and expires entirely in 2020, observers have pointed out that the length of this safe harbor will allow many projects that begin construction in 2016 to receive the full value of the credit.