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LES, NPPD agree to part ways on energy resource

LINCOLN – May 11, 2017, the boards of directors for both the Nebraska Public Power District and Lincoln Electric System will consider ending an agreement for electricity produced at NPPD’s Sheldon Station, a 225-megawatt facility outside of Hallam, Nebraska.

The boards are expected to vote on a termination and release agreement at their respective meetings. If approved, the Lincoln utility will pay NPPD $10.5 million to terminate its energy supply agreement at the end of 2017.

“Nearly every utility in America is in the process of assessing its generation portfolio,” said NPPD President and CEO Pat Pope. “We have exciting plans for the future of Sheldon, and LES has its own generation strategies.”

“LES is in the process of developing a new, integrated resource plan to evaluate the full range of energy resources to best address our customers’ needs,” said Kevin Wailes, LES CEO. “Based on load forecasts, we have excess capacity well into the future, and this termination will not impact our ability to meet the long-term needs of our customers.”

NPPD’s integrated resource plan includes pursuing a unique venture at Sheldon Station with Monolith Materials, a company headquartered in California. The carbon black manufacturer broke ground last fall on a production facility adjacent to Sheldon.

NPPD plans to purchase the hydrogen which is produced during Monolith’s production of carbon black and use it, instead of coal, to generate electricity. The innovative strategy will reduce the utility’s carbon footprint and position NPPD as the first power producer of electricity generated on a commercial, utility scale using hydrogen as a fuel. The release agreement will increase the amount of environmentally friendly energy NPPD will produce at the station.