Nebraska Public Power District (NPPD)

ENTERPRISE CONSULTING PROVIDES SOLUTIONS TO MINIMIZE RISK AND DRIVE PROFITS

Problem:
Allow NPPD to manage market risk by reducing exposure to volatile regional power prices while continuing to provide a high level of reliability to its customers.

Solution:
Black & Veatch performed a Value at Risk (VaR) assessment of NPPD's future energy supply options. The study focused on the addition and retention of physical generation assets as well the use of financial options for securing power supplies and managing risk. Black & Veatch identified and characterized new generating options and a variety of financial options.

The physical options were compared on the basis of their impact on long-term revenue requirements based on projected market pricing for wholesale energy in the region. A variety of long-term risk scenarios were developed and probability distributions were assigned to each scenario and used to develop a projection of revenue requirements and VaR for each option. As part of this analysis, Black & Veatch developed a projection of regional market wholesale energy prices for the MAPP and SPP market regions in which NPPD operates. As a result of this study, NPPD is pursuing development of both combined cycle and coal-fired generating units.