Responding to customer wishes and pending federal air quality regulations that could cost millions, the Omaha Public Power District announced Thursday it will phase out its aging North Omaha coal plant and reduce emissions at its Nebraska City coal plant.
Environmental groups and residents who have urged OPPD to reduce toxic air emissions in their neighborhoods applauded the move, and some even called it historic.
"Today's decision shows that the 'public' still has meaning to Nebraska's public power utilities," said Graham Jordison, field organizer with the Sierra Club Beyond Coal Campaign in Omaha.
The Nebraska Wildlife Federation praised OPPD for maintaining its commitment to wind and other renewable energy.
“This represents an important step forward toward cleaner energy, cleaner air and cleaner rivers,” said federation Executive Director Duane Hovorka. “It will help OPPD customers save energy and eventually keep hundreds of millions of energy dollars right here in Nebraska communities.”
OPPD will retire three of five generating units at the 60-year-old North Omaha plant by 2016. The two remaining units will remain on coal but be retrofitted with additional emission controls. They are to be retooled to run on natural gas by 2023.
Nebraska City Station Unit 1 also will be retrofitted in 2016. The second generating unit there already has state-of-the-art air pollution controls, said OPPD spokesman Mike Jones.
Over the next 20 years, OPPD expects its plan to reduce emissions of nitrous oxides by an average of 74 percent, sulfur dioxide by an average of 68 percent, mercury 85 percent and carbon by 49 percent, as well as heavy metals and other harmful pollutants.
The two coal-fired plants and nuclear-powered Fort Calhoun Station provide the majority of the power used in OPPD’s 5,000-square-mile service territory that includes Saunders, Cass, Otoe, Johnson, Nemaha, Pawnee and Richardson counties in Southeast Nebraska.
"We listened to what the customers said ... and we are confident it positions OPPD in the strongest and most flexible position for that future," President Gary Gates said in a news release.
OPPD said the changes will allow the utility to significantly reduce emissions and be compliant with new mercury and air toxic standards adopted by the Environmental Protection Agency.
Earlier this month, the EPA unveiled a plan to clean up dirty coal plants nationwide. Under it, Nebraska will have to reduce carbon emissions by about 26 percent by 2030.
The OPPD decision announced Thursday grew out of stakeholder meetings held earlier this year. Customers were asked what they wanted OPPD's future generation portfolio to look like. Five options rose to the top from that process and were presented by management to the board in May.
Jones said the board then asked management to come up with a "hybrid" option that encompassed customer wishes, and that option was approved Thursday. Customers said they want the utility to provide electricity that is affordable and reliable while being sensitive to the environment.
"This is not in response to the EPA ruling; however, we do believe this puts us in a better position to comply with it," Jones said.
The measure approved by the OPPD board will have a minimal effect on customer rates, ranging from zero to 2 percent over a 20-year period.
In recent years, OPPD has made significant strides in investing in renewable energy projects and is on track to meet a goal of having 33 percent of its retail generation load come from renewable sources, 31 percent from coal, 33 percent nuclear and 3 percent natural gas and oil by 2018.
Lincoln Electric System won't experience any economic impact from the closing of the three generating units at the North Omaha plant, LES spokeswoman Kelley Porter said.
Nebraska Public Power District, the state's largest electric utility, has put together a team to determine how it can meet the new federal emissions standards for coal plants but has made no decisions, said spokesman Mark Becker.
"We have to wait to see what the state comes up with first," he said, adding that the Nebraska Department of Environmental Quality is responsible for developing a state plan.
Some individuals and environmental groups have urged NPPD to shut down Sheldon Station, a coal-fired plant south of Lincoln.