ML11109A086

Omaha Public Power District (OPPD) 2010 Annual Report

ML11109A086
Person / Time
Site:	Fort Calhoun
Issue date:	04/11/2011
From:	Omaha Public Power District
To:	Office of Nuclear Reactor Regulation
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Download: ML11109A086 (17)

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-NicesimuE In d Nyrsaisi plant.. 48 inegwatt About OPPD Omaha Public Power District is a publicly owned eletc utility that serves a population of 770,500 people, more than any other electric utility in the state.

Founded in 1946 as a public entity, the business-managed utility is governed by an elected brd of eight directors. While its headquarters is located in Omaha, Neb., OPPD has several other locations in its 13-county, 5,000-square-mile service area in southast Nebraska.

The major of OPPD's power comes from three baseload power plants:

North Omaha Station and Nebraska City Station, both coal-fired plants, and Fort Calhoun Station, a nuclear power plant. Additional energy comes from three peaking plants and renewable energy resources, including a landfill-gas plant and wind turbines.

If lightbulbs really went on above a person's head when he or she had an idea, there might be less work for electric utilities, like Omaha Public Power District.

Ironically, it's ideas and innovation that have produced more opportunities for the industry.

In 2010, OPPD residential customers used an average of 12,025 kilowatt-hours. That's a 54 percent increase over the annual residential average in 1970. Ingenuity and advancements in tech-nology have transformed what people want and need.

Homes are well-equipped with multiple electronic devices and appliances. More than half of all U.S. homes have at least three 1-1oM M7e tNorSis, Donrie Norwood, lonn bMUCKley, uave waalsh and televisions, and the sleek, flat-screen models have made their way (r's*Wrt ska manage0.PID's tree education program and much more.

into other parts of the house.

Inventions have transformed business and industry, too. Energy sales for OPPD's commercial and industrial customers have risen 26 percent over the past 10 years, going from about 5.7 million megawatt-hours in 2001 to 7.2 million megawatt-hours in 2010.

OPPD encouraged creativity and innovation in 2010, as the company faced both hiring and budget freezes. Charged with improving safety and efficiency, cutting costs and sharpening our strategic focus, employees put their heads together. The creative "The stone age didn't end because juices flowed.

they ran out of stones."

- Unknown Contents Chairman and CEO Message ............................................................ 2 Board of Directors ........................................................................... 3 On the cover Top: Larry Byers.

Senior Managem ent ....................................................................... 3 Middle: Mike Norris, Donnie Norwood, John Buckley and Dave Walsh.

Operations Review ......................................................................... 4 Bottom: Kirk Estee, Videgla Sekpe and Statistics ......................................................................................... 12 Christene Bywater.

Investor Relations and Corporate Information .............. Inside Back Cover 2010 OPPD Annual Report 1

of how things wor Our mission is to deliver enetn operates with high standards and fosters a wor The challenging economy - combined with escalating coal an r capital projects and declining wholesale energy sales margins - meant that extra taken to maintain and enhance our operations, while keeping rates low.

Employees were charged with cutting costs, improving efficiency and focusing strategically.

Ahiring freeze saved an estimated $1.5 million, and a budget freeze resulted in an additional

$25 million savings. The freezes were lifted at the end of the year; the budget cuts are permanent.

To help strengthen our business, several employees served on Strategic Initiative and Continu-ous Process Improvement teams last year. Topics explored by the strategic teams included attracting new retail customers, reviewing smart grid applications, leveraging technology to improve customer service, transitioning customers to a sustainable future and more. OPPD also doubled the number of employees certified in the continuous process improvement methodology. This expanded effort shaved off another $1million in costs, thanks to improved efficiencies in several work areas.

While we worked hard to save money for the utility, we also did the same for our customers through various energy-efficiency programs. Acollaborative effort with Creighton University is harnessing sunshine and wind, using a diverse array of solar panels and wind turbines at various locations across campus. The $1.4 million alternative energy project, funded primarily through a federal grant, is part of a new degree program for students studying technology and applied science.

OPPD's Lighting Incentive Program is cutting energy consumption and reducing carbon footprints for commercial and industrial customers. The program provides monetary incentives to customers to revamp their lighting with more energy-efficient systems. Customers will save more than "Creativity is contagious.

8,000 megawatt-hours and about $500,000 each year, thanks to the program. Pass it on."

OPPD also received national recognition last year from the U.S. Environmental Protection Agency and Department of Energy for promotion of the ENERGY STAR program to commercial customers - Albert Einstein, 1879-1955 and the ENERGY STAR for New Homes program to builders, realtors and customers. Theoretical Physicist Receipt of our 10th consecutive J.D. Power & Associates recognition in 2010 reflects our commitment to customer service. OPPD again ranked highest among midsize utilities in the Midwest in J.D. Power's 2010 Electric Utility Residential Customer Satisfaction Studysm.

We will continue to anticipate new customer needs and raise the bar even higher.

While this recognition brings us great pride, so does the patriotic service many of our employees have gven in the global fight against terror. In the past five years alone, 19 OPPD employees have sharedtheirtalents with the U.S. military. Some helped rebuild schools, water-treatment plants and other infrastructure in Iraq. Some sewed as nuclear weapons specialists and military police. One managed a flight kitchen at a base in southeast Asia. Their families and coworkers deserve credit, too.

W.Gary Gates 7J ohn K Green President and CEO CChairman of the Board 2 2010 OPPD Annual Report

The OPPD Board of Directors includes, from the left: Frederick J. Ulrich, Del D.Weber, Michael J. Anne L. McGuire Cavanaugh, John R.Thompson, N.P. Dodge Jr., Anne L.McGuire, Geoffrey C. Hall and John K.Green. Board Member Nurse Educator (Retired)

Frederick J. Ulrich Board Member Farmer, Cattle Feeder Del D.Weber Board Member Chancellor Emeritus, University of Nebraska at Omaha Senior Management W.Gary Gates President Chief Executive Officer David J. Bannister Vice President - Nuclear Chief Nuclear Officer Assistant Secretary Edward E. Easterlin Vice President - Financial Services Chief Financial Officer Assistant Treasurer,Assistant Secretary Timothy 1. Burke Vice President - Customer Service and Public Affairs Assistant Secretary Mohamad I. Doghman The OPPD senior management team includes, from the left: Mohamad I. Doghman, Jon T.Hansen, Vice President - Transmission and Edward E. Easterlin, W.Gary Gates, Adrian J. Minks, Timothy J. Burke and David J. Bannister. Distribution Engineering and Operations Assistant Secretary Jon T. Hansen Vice President - Energy Production and Marketing Assistant Secretary Adrian I. Minks Vice President - Essential Services Assistant Secretary 2010 OPPD Annual Report 3

I OPPD Account Executive Ron OPPD worked with Marianna on Mahoney, left, visits with Ken relocating an outdated Kesler, Director of Operations 30 facility, thus improving reliability for the growing business.rooftop electrical service for the at0,O00-square-foot Marianna Industries.

efficiency by taking part in Marianna also improved lighting and energy OPPD's Lighting Incentive Program.

0I SI It boils water. it curls hair. It illuminates cities. It projects motion pic-tures. It allows instantaneous communication across the globe. It powers "Around here, however, hospital equipment. It irrigates fields of crops. It even injects jelly inside we don't look backwards for very long. We keep moving donuts. This creative juice - electricity - makes so many things possible.

And at Omaha Public Power District, we take utmost care with our forward, opening up new doors and valuable resource. doing new things, because we're curious...

Day in and day out, our employees perform their jobs to ensure and curiosity keeps leading us down reliable, affordable electricity is available for all kinds of customers.

Tk~a inh varv: analyst1 line technician, chemfist, cable splicer,

vvorking Machinist Leader Larry Byers inspects "As competition a turbine during an intensifies, outage.

the neeu ,*pative thinking iard Work iv, ..... it takes more Pays Off increases. flowing safely than pumps, turbines, Across OPPD's It is no longer to customers' transformers same thing enoughh-to and lines to System keep power do the And last year, better... no employees did an exceptional mainta.i n O efficient longer enough power plants and of mnsob and solve to be transmission and tini problems.P

_ JA*Rj,,lCn attained new records distribution (I&D) 1933" peak of 2,402.8 for system, as the utility

_Edwaru megawattsenergy usage inAugust. every monthand set an all-time Physician, u The sweltering high tho Author summer of 2010 employees paid showed how the off. Despite sustained, hard work of our mechanical and intense summer heat that Line Technician human performance Bryan Bernhard system, oPPD at our taxed both delivered a reliable humming contentedly- power plants and on 5 makes re supply of energy our TiD to keep air conditioners That achievement was no accident.

maintenance tasks There are thousands that are part of of preventive passing operations, our work process.

A team effort encom at oPPD. Without maintenance, and technical careful attention to detail, support ispart stress transformers, conductors, the intense summerof the culture problems at plants cooling and other heat can andacross the systems, leading takes most equipment delivery system. to bigger to the limitsof gunning hard On the nuclear performance. in hot weather side, a similar approach port Calhoun to maintenance a wide-ranting Station. To ensure safe, sustained can be found at summer reliabilitY nuclear operations, dcomponentS program that there proactively maintains is o ppD continues invest plant to in etiinthe T&D system Distribution improve h through the O s s em ment program, proactively Transmission aDiothecritical and Other ffaicmoinrgpn l dn transform replacing and components ers, Poles before they fail The reliable flow inthe intense of power from heat of summer.

to our customers generating plants tstruhhe tion isa revenue also brings benefits throughSaetheTOD s system ystem generator instead to the bottom line.

of a cost. Safe, sustaine opera-2010 OPPD Awtrua1l RePs~rt5

"The principle goal of education is to create people who are capable of doing new things, not simply of repeating what other generations have done -

people who are creative, inventive and discoverers."

-Jean Piaget, 1896-1980 Swiss Developmental Psychologist, Philosopher ground Wee transformed into a ro eo setting.

National Spotlight Shines at Rodeo A little bit of rain couldn't dampen the competitors' spirits at the American Public Power Association's (APPA) Lineworkers Rodeo, proudly hosted by OPPD in March.

After all, lineworkers face far worse weather extremes during the course of a year.

Nearly 200 participants from across the country competed in the rodeo, which included a series of competitive events demonstrating the safe work practices that lineworkers carry out for their utilities. The events - such as the hurt-man rescue, cross-arm change-out and obstacle course - were judged based upon safety, work practices, neatness, ability, equipment handling, and timely event completion.

Ateam of OPPD employees spent several months organizing the event, ensuring its success. An APPA official said future rodeos would be modeled after this one.

e cOome ed at the APPA rodeo.

6 2010 OPPID Annual Report

shareideas.

Bywater and Christene Sekpe Videgla Kirk Estee, Sharyl McGuire, Mike Herzog, from left, board members, ofEngineers Society OPPD Engineers Connecting explore neeas SocialNetwork need to and employees new ideas enableinnovation, To They COver Workforce.

old ones, of OPPD's engineer- I'm frightened challenge about 15 percent chemical andnuclear the of newideas.

Engineers comprise electrical Construction, in2010 with frightened C en ed civi banded together to rg

- "on mechanical, a network And this large faction engineers old ones."

ngdisciplines. Society provide OPPD of Engineers. of the formation ofthe OPPD ofthe group is to The purpose ideas. Theyfrom learned They sharethey what developand theyshare engineers. included engage andstories, have gatherings attractretain, Success Their any topics.

share engineering as planned on m ps Society go quite the OPPD didn't Worksho like projects that a group panels and is through agd Socir eaty.

legislation minimize risk tJohneCe energy way to e best from past and avoid repeat The can learn xperience Where one of Enginees, didn't work. relationships thingsthat Ing establishes collaborative of Engineers The OPPDSociety OPPD.

that benefit A Report7 2010OPPD

to cust6m-ers.

restoring service around the clock crews worked Old Market Outage Sparks Insight and Innovation Each year,hundreds of thousands of people visit Omaha's Old Market, the National which is designated as a historicdistrict on bars, Register of Historic in of restaurants, shops and services housed blend streets.

Places. It's an eclectic along cobblestone warehouses century.old Lastsummer, an unusual fire in an underground cable vault temporarily put became chocolates, goods, like pqwer. Below, Old more than 100 customers out of businessin the historic area and surrounding save perishable restore several it took The intense thatblocks. hours Helping customers worked to center, and Mike downtown fire was so as OPPD employees Jorgensen, during the outage.

Jeff a priority Shop co owners John Quade Market Candy worked with OPPD's of cooling before workers could pivonka, right, begin assess.

enter the vault and dozens damage.

ing the of Inthe meantime, OPPD employees hit the streets, Working aroundthe clock to restore Power and help of customers affected by the loss Power. Customers remarked on the value of their assistance.

used the Employee teams Of the event 7 uncommon nature to innovate and find ways to enhance safety customer notiica.

oiia usoe tin kt.

iing minds found

Water Wind Farm.

wre sedto ýguide thýe crans mnassive turbines into place at Flat Emphasizing Environmental Efforts OPPD has a goal of having 10 percent of the electricity it sells to retail customers coming from renewable energy by 2020.

At the end of 2010, 1.6 percent of OPPD's total retail sales came from renewable energy. By the end, of 2011, that percentage is expected to be 4.3 percent. OPPD's renewables currently include wind power and landfill gas.

In late 2010, Flat Water Wind Farm began operations. OPPD has a power purchase agreement for the total 60-MW capacity of this facility, which features 40 wind turbines. By the end of 2011, OPPD should be receiving 40.5 MW of generation from Petersburg Wind Farm, which is slated to begin construction "An invasion of armies can be resisted, of its 27 wind turbines in spring 2011.

but not an idea whose time has come." Outside of generation, OPPD gave strong pushes to promote many other sustainable programs, including paperless billiir and refrigerator recycling.

- Victor Hugo, 1802-1885 In 2010, paperless billing grew to 16,500 customers and electronic bill Poet, Playwright,Novelist payment reached an all-time high of 399,000 transactions. These options save resources and reduce costs.

With help from the Nebraska Department of Environmental Quality, OPPD removed 2,124 old, inefficient refrigerators and freezers from the grid. This recycling program paid customers $35 for each operable appliance, and then 95 percent of the materials that made up these appliances were recyced. Many of these secondary appliances had been running in garages, and they could have been using up to four times more electricity than a new unit.

As your energy partner, we'll keep pursuing ideas that help the environment.

2010 OPPD Annual Report 9

year-round need arrived by mail. Aplea to emplo "A hunch is creativity trying to tell graphed sports memorabilia, guitar lessons, t g you something. Organizers spent several weekends hunting down other bargain trea

- Frank Capra, 1897-1991 would appeal to bidders.

Film Director,Producer That approach netted auction organizers 315 items, which raised more than

$21,000, a 23.5 percent increase over the 2009 auction.

The auction isone of several ways funds are collected. With the auction and other efforts, employees raised approximately $61,000 for the EAP in 2010.

Parcipantshe Walk fr Warmth another fundraiser fn

• ro th Enegy ssitance Program.

!!r.,7T~athsee 6IV9s Pietsch an illustration promOting Creative Coordinator Joe Comstock shows Althea Young "Energy Detectives" Sharing Tips Thousands of fifth-graders in OPPD's service areas are searching for energy-saving clues, with the help of the Energy Detective Program. And with a goal of reducing energy demand on our system by 50 megawatts by 2012, OPPD needs customers willing to look for ways to save energy.

Children are key to achieving behavioral changes in energy use and renewable resources, and this energy education program encourages students to work with their families on home retrofit and auditing projects.

Students receive an energy detective kit, which contains the following devices:

• Kitchen aerator. Controls and reduces the amount of water from the faucet.

• Compact fluorescent lightbulbs. Last up to 10 times longer and use 75 percent less energy than incandescent lightbulbs.

• Digital thermometer. Measures the temperature of the refrigerator, freezer and "You can't use up creativity. The more hot water in the home. you use, the more you have."

a FilterTone alarm. Sounds when the furnace filter needs to be cleaned or

- Maya Angelou, 1928-changed.

Poet, Civil Rights Activist One activity in the kit involves replacing an incandescent lightbulb with an energy-saving CFL, then calculating the kilowatt-hours saved over the course of a year. More than 6,000 students participated in the program in 2010, and the program will run through 2011.

The program is jointly funded by 79 Nebraska electric and natural gas utilities and the American Recovery and Reinvestment Act, administered by the Nebraska Energy Office.

2010 OPPD Annual Report 11

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Total Utility Plant (at year end)

(inthousands of dollars).......4,865,417 4,678,449 4,561,815 4,259,501 4,166,997 3,656,433 3,363,909 3,224,851 3,081,073 2,876,799 Total Indebtedness (at year end)

(inthousands of dollars).......2,011,969 1,937,704 1,902,403 1,866,472 1,565,807 1,133,171 894,020 939,972 844,141 739,290 Operating Revenues (inthousands of dollars)

Residential .............. 5,294 33......... 292,887 271,935 267,042 249,174 237,798 211,913 208,426 214,447 202,984 Commercial ....................... 284,400 265,668 238,496 228,060 213,314 204,314 194,684 189,820 189,786 188,734 Industrial ......................... 164,621 139,865 109,827 100,239 94,109 90,344 90,987 85,406 75,946 76,197 Off-System Sales .................. 184,374 158,354 127,676 110,399 96,500 120,030 109,523 108,795 65,885 91,045 FPPA Revenue...................... 269 - - - - - - - - -

Unbilled Revenues................. 1,232 7,449 3,391 1,742 2,527 630 (1,134) 4,086 (1,268) 104 Provision for Rate Stabilization - - - - - - - - (10,500) (5,000)

Provision for Debt Retirement.. (13,000) 13,000 20,000 27,000 (15,000) - (55,000) (35,000) - -

Other Electric Revenues ....... 29,160 22,743 16,648 15,771 36,204 13,436 15,342 11,541 11,357 14,731 Total ........................... 986,350 899,966 787,973 750,253 676,828 666,552 566,315 573,074 545,653 568,795 Operations &Maintenance Expenses (inthousands of dollars) ...... 720,957 653,993 561,396 508,524 461,101 447,270 401,778 404,040 339,750 353,767 Payments In Lieu of Taxes (inthousands of dollars) ...... 27,851 24,810 22,426 21,398 20,241 19,693 18,591 18,067 18,553 18,234 Net Operating Revenues before Depreciation, Amortization and Deconmmissioning (inthousands of dollars) ......... 237,542 221,163 204,151 220,331 195,486 199,589 145,946 150,967 187,350 196,794 Net Income (inthousands of dollars) ...... 40,047 46,557 79,186 89,489 84,290 82,171 24,844 25,878 80,621 69,867 Energy Sales (inmegawatt-hours)

Residential ....................... 3,644,400 3,361,672 3,486,858 3,546,116 3,374,053 3,356,196 3,054,576 3,079,589 3,151,895 3,065,377 Commercial ..................... 3,777,092 3,672,982 3,758,853 3,750,634 3,577,436 3,535,036 3,369,713 3,347,214 3,353,621 3,362,665 Industrial......................... 3,427,710 3,039,396 2,877,282 2,759,087 2,664,743 2,644,634 2,630,038 2,561,569 2,290,368 2,302,311 Off-System Sales................. 5,552,645 5,534,803 3,003,888 2,858,004 2,486,483 2,502,433 3,646,043 3,775,362 3,273,359 3,952,632 Unbilled Sales ..................... (24,109) 74,416 50,374 13,858 9,628 21,285 6,890 61,165 (23,697) (5,268)

Total .......................... 16,377,738 15,683,269 13,177,255 12,927,699 12,112,343 12,059,584 12,707,260 12,824,899 12,045,546 12,677,717 Number of Customers (average per year)

Residential ........................ 303,374 299,813 296,648 293,642 289,713 282,310 275,854 270,579 266,464 261,286 Commercial ....................... 43,225 43,134 42,867 42,214 41,488 40,665 39,834 38,961 38,401 37,563 Industrial........................... 154 151 142 134 132 133 135 127 117 116 Off-System ......................... 38 34 32 35 37 39 45 48 54 49 Total ........................... 346,791 343,132 339,689 336,025 331,370 323,147 315,868 309,715 305,036 299,014 Cents Per kWh (average)

Residential ......................... 9.22 8.77 7.82 7.51 7.40 7.07 6.95 6.73 6.81 6.63 Commercial ....................... 7.54 7.29 6.36 6.07 5.99 5.77 5.76 5.69 5.41 5.38 Industrial-......................... 4.83 4.62 3.82 3.64 3.55 3.46 3.40 3.39 3.32 3.32 Retail ............................... 7.26 6.96 6.13 5.93 5.81 5.58 5.48 5.39 5.46 5.36 Generating Capability (at year end)

(inmegawatts) .................... 3,224.7 3,223.9 2,548.8 2,548.8 2,544.1 2,542.5 2,540.5 2,540.5 2,220.5 2,205.0 System Peak Load (inmegawatts) .................... 2,402.8 2,316.4 2,181.1 2,197.4 2,271.9 2,223.3 2,143.8 2,144.8 2,037.4 1,994.1 Net System Requirements (inmegawatt-hours)

Generated ....................... 15,870,513 15,263,983 12,477,032 12,274,660 11,341,827 11,180,808 12,235,044 12,000,873 11,428,893 11,516,924 Purchased and Net Interchanged ............. (4,428,059) (4,627,627) (1,864,214) (1,738,833) (1,268,780) (1,148,903) (2,716,242) (2,557,981) (2,122,701) (2,557,704)

Net ............................... 11,442,454 10,636,356 10,612,818 10,535,827 10,073,047 10,031,905 9,518,802 9,442,892 9,306,192 8,959,220

OPPD Minibond Holders OPPD is the Paying Agent, Transfer Agent and Registrar on OPPD's Minibonds.

OPPD Minibond Administration provides information and assistance to Minibond holders regarding:

" Interest Payments Interest on Current Interest-Bearing Minibonds is paid on April 1 and October 1 of each year.

• Ownership Transfer Minibond Transfer Information Forms can be obtained via www.oppd.com or by contacting the Minibond Administrator, listed below.

" Optional Early Redemption Investor Relations and Commercial Paper Holders

• Replacement of Lost Minibond Certificate Issuing and Paying Agent Minibond Administrator Corporate Information The Bank of New York Mellon Trust You may contact the Minibond Corporate Headquarters Company, N.A. Administrator at:

Energy Plaza New York, New York Minibond Administrator 444 South 16th Street Mall Senior, Subordinate and Separate Omaha Public Power District Omaha, Nebraska 68102-2247 System Bondholders 444 South 16th Street Mall 402-636-2000 You may contact OPPD with questions Omaha, NE 68102-2247 www.oppd.com about OPPD debt at: Email: minibonds@oppd.com General Counsel Omaha, Nebraska area FraserStryker PC LLO Finance & Investor Relations 402-636-3286 Omaha, Nebraska Omaha Public Power District Outstate Nebraska 444 South 16th Street Mall 800-428-5584 Financial Advisor Omaha, NE 68102-2247 Barclays Capital Inc. Available Financial Information Email: flnfo@oppd.com New York, New York In compliance with Securities and Exchange 402-636-3286 Consulting Engineer Commission Rule 15c2-12, information SAIC Energy, Environment & The Trustee and Paying Agent on OPPD's regarding OPPD is available through the Infrastructure,LLC Senior Lien Debt, Subordinated Revenue Municipal Securities Rulemaking Board's Seattle, Washington Bonds and Separate System Revenue Bonds Electronic Municipal Market Access System.

is The Bank of New York Mellon Trust Copies of its most recent annual reports, Independent Auditors Deloitte & Touche LLP Company, N.A. You may contact The Bank interim reports and official statements also of New York Mellon Trust Company, N.A. are available upon request at flnfo@oppd.com Omaha, Nebraska directly at: or at the following address:

Bond Counsel FinanceDivision Kutak Rock LLP The Bank of New York Mellon Trust Company, N.A. Omaha PublicPower District Omaha, Nebraska 444 South 16th Street Mall Corporate Trust Division 2 North LaSalle Street, Suite 1020 Omaha, NE 68102-2247 Chicago, Illinois 60602 Financial information in the Email: corporate.bond.research@bankofny.com annual report also is available at Bondholder Relations: 800-254-2826 www.oppd.com