Omaha Public Power creates new renewable rate structure to lure tech companies

Dive Brief:

Omaha Public Power District is taking credit for some of Facebook's decision to construct a new data center in the state, saying an innovative rate has been developed to allow the tech company to power the facility entirely with wind energy.
Facebook will reportedly consider constructing 450 MW of new wind generation to meet the company's demand for clean energy. The company wants to power its data centers with 50% renewable power by 2018. OPPD would service the wind facility, if Facebook constructed it. The utility is also considering a proposal for additional wind that would be available to all customers.
The rate, 261M, includes minimum size and demand requirements, requires customers to own a substation, and gives customers the ability to access energy markets as well. It is an extension of a previous rate, with additional flexibility granted to the customer.

Dive Insight:

Omaha Public Power's rate structure is at least a part of the reason Facebook opted to construct a new data center in its service territory. The development highlights the growing focus tech companies in particular have placed on renewable energy, and the motivation it can give utilities to design new renewable energy offerings.

In 2016, the number of utilities offering renewable tariff programs to key commercial customers doubled, growing from just five to 10.

The hope is to prevent companies like Facebook from signing power purchase agreements directly with renewable energy developers, bypassing the utility. In 2015, large corporate customers contracted for a record 3.2 GW of renewable energy, a number that's expected to grow.

In Nebraska, construction of the Facebook data center could employ more than 1,000 in temporary construction jobs, and hundreds of long-term positions.

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

To qualify for the 261M rate, OPPD said a customer must be large enough to meet certain size criteria. For 161-kV service, the customer would need a minimum demand of 20 MW, or 200 MW for 345-kV service.

OPPD's Board of Directors unanimously approved the new rate January. The public power provider said the process to develop the offering "took just four months, albeit a work-intensive four months, involving collaboration across a number of departments."

OPPD believes the new rate will be able to accommodate a growing number of companies. Yahoo already has a data center in La Vista, Neb.

“Partnerships like this, with the state, local communities, and utilities like OPPD, cannot be overstated when it comes to economic impact for our region,” OPPD CEO Tim Burke said in a statement released through Nebraska Gov. Pete Ricketts' office.