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OPPD’s innovative rate brings new Facebook data center to Neb.


From the April 5, 2017 issue of Public Power Daily

Originally published April 4, 2017

By Paul Ciampoli
News Director

The Omaha Public Power District on April 4 detailed how it played a key role in helping to bring a new Facebook data center to Papillion, Neb.

The district’s recently approved rate plan, Rate 261M, “is a unique and powerful example of how OPPD works to meet the needs of large companies, particularly those who seek more renewable energy, while bringing broader economic benefits to all of its 369,500 customer-owners,” OPPD said in an April 4 news release.

“We’re on a mission to connect the world, and we’re committed to powering this connectivity with the smallest footprint possible,” said Peter Freed, renewable energy manager at Facebook. “Our goal is to reach 50 percent clean and renewable energy in our electricity supply mix for our data centers in 2018, and our work with OPPD brings us one step closer.”

OPPD President and CEO Tim Burke said the utility’s work with Facebook is in line with its own mission, namely to provide affordable, reliable, environmentally sensitive energy services.

“We want to lead the way we power the future,” said Burke. “We do that by being collaborative with our customers and looking for solutions that are in the best interests of all those we serve, now and in the future.”

That is how Rate 261M, an extension of Rate 261 for large-power, high voltage-transmission-level customers, was developed, OPPD noted.

“We have recognized the need to continue to evolve our rate offerings to attract new companies and assist with current companies’ expansions,” said Tim O’Brien, manager of economic development for OPPD. “And we were able to create a new plan, within a rate framework we already had to support this trend.”

Burke said the public power model “enables us to be agile and customer-focused, so we were able to respond quickly with a workable solution, not only for Facebook, but for future economic development projects that would benefit our service territory.”

Rate 261M gives customers flexibility in how they meet their energy goals, while charging fair and reasonable rates that cover OPPD’s fixed costs, including generation and system capacity, transmission and administration.

After thorough review and analysis from OPPD representatives and an independent rate consultant, the Brattle Group, the OPPD Board of Directors unanimously approved the final version of Rate 261M in January.

The entire process, from conception to implementation, took just four months, involving collaboration across a number of departments within OPPD. OPPD pointed out that those four months were work intensive.

Qualification for Rate 261M

To qualify for the rate, a customer must be large enough to meet certain criteria, such as requiring a minimum of 20 megawatts of demand for 161-kilovolt service and 200 MW of demand for 345-kV service.

A ramp-up period of 18 months would be allowed before that minimum usage requirement kicks in. A customer also needs to own or acquire its own substation.

OPPD will be a fully integrated service partner, managing the process and providing service.

With respect to what customers get in return, in Facebook’s case, it will be able to work with OPPD to procure 100 percent renewable energy for their new data center in Sarpy County.

OPPD said that the most unique feature of the rate structure gives them the ability to access the market for the energy component of their bill. That way, they have the opportunity to meet their specific energy needs through renewable resources, OPPD said.
            
“OPPD has done the hard work of carefully evaluating their rates to find every value for the renewable energy buyer without shifting costs to the other customers,” said Letha Tawney, director of utility innovation at World Resources Institute.
 
WRI is a founding partner in the Renewable Energy Buyers Alliance, a non-governmental organization-led network supporting the renewable energy goals of the Fortune 500.
            
“OPPD has shown that public power can meet the ambitious demand for clean energy from large customers, and we hope other public power agencies take up the example,” Tawney said. “The scale of the demand from corporate buyers is only growing.”
 
Brett Illers, the senior program manager for Sustainability at Yahoo, agreed.

He said that large customers must work with utilities on renewable energy, “and we’re pleased to see OPPD shares this vision with its adoption of Rate 261M. Yahoo has long advocated for these types of solutions, and we look forward to adopting this rate to help bring our growing Nebraska facilities to complete renewable energy consumption.” Yahoo maintains a data center in La Vista, Neb.

OPPD said Rate 261M will be able to accommodate a growing number of companies like Yahoo and Facebook that want more flexibility when it comes to meeting their energy goals.

“It truly is a win-win,” said Burke. “And we expect this rate will attract more big companies to our area. This is an exciting time for OPPD, our customers, the community, and the state of Nebraska.”

“Growing Silicon Prairie through the state’s tech industry has been a priority for my administration,” said Nebraska Gov. Pete Ricketts in an April 4 news release issued by the governor’s office. “Having Facebook select Nebraska for its newest data center campus shows our efforts and those of our partners are paying dividends,” said Ricketts.  

“In the past year, I had the chance to visit Facebook Headquarters in Menlo Park, California and meet with executives who are instrumental in building the company’s data center ecosystem. We were able to demonstrate that Nebraska can meet or exceed their expectations on every front.”


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