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Bold Statement on NPPD Contract with TransCanada

Update, 8/8 3:20pm: Ben presented to the NPPD board on Thursday and his comments did not receive a favorable response. Bold Nebraska spoke with NPPD representative Terry Warth and offered to post any comment from NPPD on our website. We believe in our public power system. We simply do not think NPPD should enter into a contract with TransCanada until they have a permit. We think TransCanada should pay 100% for costs associated with their project up front. Ratepayers should never serve as a bank for a foreign corporation that is not feeding energy into our grid.

–Original Post–

NPPD will vote on Friday, August 9th, to enter into a contract with TransCanada to act as a bank for a foreign corporation’s energy needs. I attended the NPPD board meeting on Thursday to give public comment on the contract, my testimony in full below. This is a complex and critical issue. Since Nebraska is unique in that our power is 100% publicly owned, we all have a say and stake in this matter. NPPD contract for Keystone 1: click here to view PDF (note: we will post contract for KXL once it is made public)

Background:

On Friday, the NPPD board will vote to enter into a contract with TransCanada. The contract states NPPD will serve as a bank for TransCanada in the sum of at least $11 million to build various pieces of infrastructure to support the proposed Keystone XL.  The permit for Keystone XL continues to be bogged down in controversy including a major lawsuit challenging the constitutionality of Nebraska’s routing process.  TransCanada has yet to pay off the loan given to them by NPPD, using ratepayer money, from Keystone 1 pipeline infrastructure needs. While TransCanada does pay interest on the loan from NPPD, roughly 10% of the costs are still assumed by ratepayers because TransCanada is refusing to pay for needs that NPPD staff have determined are necessary for energy reliability making the interest essentially null and void and leaving Nebraska ratepayers with the task of subsidizing a foreign, for-profit export pipeline.

Press Statements:

Jane Kleeb, Bold Nebraska Director: “NPPD has a deep tradition in our towns for providing reliable energy and the promise of growth. Entering a contract now, before TransCanada has a permit, is unnecessary and goes against common sense. Citizens are putting the public back in public power and will not sit on the sidelines as our ratepayer money is used to finance a foreign export pipeline. All infrastructure needs of TransCanada, and all reliability requests by NPPD staff, should be paid for by TransCanada upfront and should not be subsidized in any way by Nebraskans.”

Ben Gotschall, Bold Nebraska Energy Director: “As we have done with landowners, county supervisors, and municipal leaders along the proposed Keystone Export pipeline route, we advise the NPPD board to take no action on signing any agreements or contracts with TransCanada at this time. Just because TransCanada wants to have everything in place for their proposed project as soon as possible does not mean that NPPD needs to spend unnecessary time and money working on TransCanada’s behalf.  It is neither wise nor fiscally responsible to front-end finance a foreign project’s infrastructural needs before that project has the proper permits.”

Meghan Hammond, Landowner: “It is bad enough we have to give up a portion of our land through eminent domain for private gain, now NPPD is serving as a bank for a foreign corporation’s energy needs? Nebraska has the ability to power our irrigation pumps with clean and local energy but that gets put on the back burner while NPPD rolls out the red carpet for TransCanada building them whatever they need and putting up the money for the transmission lines and substations. We call on our state government to step in and put an end to this misuse of ratepayer money.”

Formal submission to NPPD board opposing the vote to act as a bank for TransCanada:

As we have done with landowners, county supervisors, and municipal leaders along the proposed Keystone Export pipeline route, we advise the NPPD board to take no action on signing any agreements or contracts with TransCanada at this time.  TransCanada has no permit to build a pipeline in Nebraska, and I have serious doubts that they will obtain a permit.  Their previous permit was denied, the subsequent reroute is laden with problems, and the process by which that route was approved by the Governor is subject to a pending lawsuit.  There is no indication that the State Department or the Obama administration will approve the permit currently under consideration.  For NPPD to act now by signing contracts and agreements would not be in the best interest of its Nebraska customer-owners.

There is no timetable governing NPPD’s actions in this matter.   Just because TransCanada wants to have everything in place for their proposed project as soon as possible does not mean that NPPD needs to spend unnecessary time and money working on TransCanada’s behalf.  It is neither wise nor fiscally responsible to front-end finance a foreign project’s infrastructural needs before that project has the proper permits.

NPPD has preemptively acted on TransCanada’s behalf before and it has cost Nebraskans money as well as damaged sensitive Sandhills land that has yet to be restored.  When land in Wheeler County was cleared for the Ericson substation location to serve a TransCanada pump station in November 2011, the Keystone Export pipeline was waiting for a permit that was denied due to an ill-conceived route that was changed.  Who gets to pay for the restoration of the land east of Ericson?  Will TransCanada graciously offer to compensate Nebraskans for the damage caused by work done on behalf of a foreign corporation?  Who owns the land now?  NPPD owns it, which means Nebraskans own it.  How much did it cost us, and for what?  So sand can drift across highway 91 like blowing snow?

I would like to go on record saying that while I support the building of transmission lines for renewable energy, I have misgivings about the way NPPD has handled the connection between the Hoskins to Neligh Transmission project and the proposed Keystone Export pipeline. While I understand that transmission project is not part of the current contract in front of the board, I believe that NPPD has not accurately represented that project’s connection to the proposed Keystone Export pipeline, and I do not believe that Nebraska landowners, farmers and ranchers should be asked to give up rights to their property for a project that would be built in the interests of serving a foreign-owned pipeline pumping foreign oil to be exported.

At the August 6th hearing on the Hoskins to Neligh transmission project in Pierce, Nebraska, NPPD Vice President Tom Kent stated that the transmission lines would be needed and built whether or not the Keystone XL pipeline would be built, and that there was no connection whatsoever to the proposed Keystone XL pipeline.

I don’t doubt that the former part of Mr. Kent’s statement is true.  It appears likely that the Hoskins to Neligh transmission line would be built whether or not the Keystone Export pipeline is built.  As for the latter part of Mr. Kent’s statement, for NPPD to claim that there is absolutely no connection whatsoever to the Keystone Export pipeline does not seem plausible, or even possible.  The need for the Hoskins to Neligh transmission line may be independent of and may be built regardless of the Keystone Export pipeline’s construction, but in order for the Keystone Export pipeline to operate, the Hoskins to Neligh transmission line must be built.  That is a connection.

In the Executive Summary of the State Department’s Draft Supplemental Environmental Impact Statement on the Keystone Export pipeline, “connected actions” are defined as “projects that would not be constructed or operated in the absence of the proposed project.”  One such “connected action” is Electrical Distribution Lines and Substations, which would be built by local power providers, such as NPPD.

Elsewhere in the Draft SEIS, in section 2.1.12.3 entitled “Electrical Distribution Lines and Substations,” a description of the 115kV lines is given, along with the statement that: “to the extent practicable, Keystone would coordinate, and has been coordinating [emphasis mine], with the local public power district to minimize potential impacts to landowners resulting from the construction of the new transmission lines to pump stations. These power providers would construct the necessary substations and transformers and would either use existing service lines or construct new service lines to deliver electrical power to the specified point of use.”

In the Nebraska DEQ report of the pipeline route, the exact same description of the 115kV lines is given, along with the statement that, “Although all of the infrastructure improvements would be owned by the power provider, Keystone would fund the construction through agreements with each power provider.”  So, is Keystone “funding” these projects?  No.  And they never have.  Any project ever done on behalf of TransCanada by NPPD or by NPPD contractors is being paid off, over a period of time.  If anyone is “funding” the projects, it is the Nebraska customer-owners of NPPD, whose ratepayer money is used to front-end finance projects on TransCanada’s behalf.

In fact, NPPD has been working hand in hand with TransCanada on a number of projects for their pipelines past and proposed.  In an email dated January 13, 2009 from NPPD’s Don Veseth to TransCanada’s Rene Baillargeon regarding meetings with TransCanada, Veseth ended by saying,  “we look forward to working  . . . to keep on task in order to meet EXPORT project needs.”  In an Email dated January 21, 2009, from Baillargeon to Veseth, action items regarding Keystone Export pump station locations and substation size requirements are discussed.  Specifically, TransCanada directed NPPD at that time that “it would be very timely for the purposes of optioning pump station land if NPPD could advise substation size requirements so that we may incorporate this into our land acquisition process.”

In 2012, NPPD passed a resolution which reads in part that its staff, “be directed to work proactively with TransCanada to make the process of developing new electric infrastructure to serve the proposed new pipeline route occur in a timely and cost-effective manner.”

In maps provided by NPPD, the proposed substation for the Hoskins to Neligh transmission line will be located in the southwest corner of the southeast quarter of Section 31, T26N, R05W.  In the NDEQ map of the proposed Keystone Export pipeline route, the proposed Antelope County pump station location is in the southeast corner of the northwest quarter of Section 5, T-25N, R05W.

In a letter dated April 9, 2012 from Lanny Nickle of the Southwest Power Pool to NPPD’s Paul Malone, the in-service date for the Hoskins to Neligh project is listed as March of 2019.  In a powerpoint entitled “Southwest Power Pool and Integrated Marketplace Tariff Update” presented to the NPPD Board of Directors in Strategic Session on February 9,2012, the same date of March 2019 is given as the in-service date for the same project.  Why then, on NPPD’s website, does the project have a new starting date of mid-2016, which just so happens to be the latest projected starting date for the Keystone Export pipeline?

I have a hard time believing that NPPD randomly placed a substation as part of a $98.7 million transmission project that just so happens to have the capacity required to service a pump station for a $5 billion pipeline project in the exact township and section, at the precise location at which the pipeline begins to change course from a northwest-to-southeast angle to a straight north-to-south line, within a mile of the proposed pipeline pump station location by accident.  I have difficulty accepting that NPPD arbitrarily routed the 4 proposed 115-kV transmission lines, which incidentally are the exact size needed to serve the pipeline pumping stations, conveniently parallel to the exact route of the pipeline, less than a quarter mile from a proposed pump station site, leading out to the west and south, in the direction of other proposed pump station locations.

Whether the Keystone Export Reroute pump station in Antelope county was located to take advantage of the design of the Neligh substation location and infrastructure, or whether the Hoskins to Neligh transmission line and substation was designed to accommodate the possible future location of a Keystone Export pump station does not matter.  What matters is that it did not “just happen.”  It was not a coincidence, and for NPPD to say there is “no connection whatsoever” is not forthcoming.

NPPD has a history of maintaining trust with Nebraska citizens.  Those who came before us who worked hard to build and maintain the public power system also worked equally hard to build and maintain public trust.  In a public power state, public trust, and faith in the public power system, should be at the heart of everything we do.

I find it hard for myself to trust an entity that would openly deny any connection to a project that is so obviously connected in essential infrastructural elements and basic need.  I find it difficult to have faith in a public entity that would willingly enter into an agreement with a foreign corporation that has bullied and intimidated Nebraska landowners, misrepresented its legal standing relative to eminent domain authority, spent millions lobbying our legislature and state leaders to act on its behalf rather than behalf of Nebraska citizens, all along misleading our elected officials about the role of local and state authority on routing and regulating pipelines. That is why I urge NPPD to take no action and enter into no agreements with TransCanada at this time.  At this time, I ask NPPD to think of the best interests of Nebraska citizens, the customer owners and stakeholders in the public power system.

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208 S. Burlington Ave., Ste 103, Box 325, Hastings, NE 68901