Nebraska's Largest Power Providers Making Big Bet on Natural Gas

By Matt Olberding

As Nebraska’s largest utilities try to add more renewable energy in an attempt to reach carbon-neutral energy goals, they’re making a big bet on natural gas, too.

Nebraska Public Power District, Omaha Public Power District and Lincoln Electric System all have recently announced plans to add hundreds of megawatts of new natural gas-based power generation.

The primary drivers appear meeting new demand and complying with heightened regulatory requirements.

As part of its first significant expansion in two decades, NPPD plans to spend more than $1.5 billion to add nearly 700 megawatts (MW) of new power generation at its Sheldon Station in southern Lancaster County.

The Princeton Road Station Project, to be built on land NPPD owns next to Sheldon Station, will add 694 MW of power, enough to power more than 300,000 homes. It’s expected to be completed by the summer of 2029.

The utility plans to install combustion turbines that will generate 478 MW of power and reciprocating internal combustion engines that will generate another 216 megawatts.

NPPD plans an even bigger expansion in the future. The utility is planning to spend more than $1 billion to add combustion turbines that will generate 717 MW of power at its Beatrice Power Station. An NPPD spokesman said it is still “determining the appropriate time frame” for construction of the project.

All of the turbines and engines will use natural gas as their main power source, something Mick Spencer, NPPD chief operating officer, said is virtually a no-brainer.

“Natural gas as the primary fuel is pretty much the sole alternative at this point, from a practical standpoint,” said Spencer, who noted that there are regulatory and cost hurdles to building new coal or nuclear plants.

Cost is less of a factor with natural gas, which has been historically inexpensive. According to the U.S. Energy Information Administration, natural gas’ average price of $2.21 per million British thermal units last year was the lowest on record when adjusted for inflation. Prices have been slightly higher this year, according to the EIA, but they still are fairly low by historical standards.

“When you look at the prices, they’re definitely at some of the lowest they’ve been,” said Bobby Noble, senior program manager for gas turbine R&D at the Electric Power Research Institute.

The move to install more natural gas-produced electricity is accelerating across the U.S., even as utilities look to decarbonize and continue moving toward using more renewable energy. Some utilities in neighboring states are making similar investments.