Premium ContentMouse over Home then click on Premium Content for information.WASHINGTON — With Missouri River floodwaters lapping at the base of a billion-dollar nuclear power plant near Fort Calhoun, Nebraskans are acutely aware of the financial pain natural disasters can inflict.
What they might not understand is the advantage they enjoy over other parts of the country when Mother Nature starts ripping down power lines and swamping substations.
All the companies that provide electricity in Nebraska are publicly owned, which makes them eligible for federal emergency public assistance grants after disasters strike. Private for-profit power companies such as MidAmerican Energy in Iowa are not.
That simple difference has boosted the dollar amounts coming into Nebraska in federal disaster assistance — and, by extension, has kept the cost of electricity here lower than it would have been.
From 2006 through 2010, about 70 percent of Nebraska's $280 million in federal disaster aid for public entities reimbursed the losses of public power districts, according to state data.
Over the same time period, reimbursements to all of Iowa's public utilities, including water and sewer districts, as well as rural electric cooperatives, accounted for only about one-fourth of the Hawkeye State's $1.3 billion in federal disaster aid for public entities. The electrical cooperatives accounted for only 13 percent of such federal aid in Iowa.
Nationally, federal taxpayers paid nearly $29 billion for public entity disaster assistance from since 2006. Only 9 percent of that money went to utilities, which includes water, sewer and power reimbursements. The bulk of the money goes for repairing roads and bridges, restoring damaged buildings and clearing debris.
The Federal Emergency Management Agency typically requires state and local entities to pay for 25 percent of their own costs. Federal taxpayers provide the remaining 75 percent.
Those federal funds saved Nebraska public power district ratepayers after a nasty New Year's Eve storm struck in early 2007.
Coated with ice, lines and poles snapped in the high winds. Huge metal power transmission towers crumpled.
Most of the federal public assistance money for Nebraska in 2007 went to the state's public power districts — $145 million.
The Nebraska Public Power District received $55 million of those federal funds in the wake of the New Year's ice storm, after which it had to restore power to more than 42,000 customers.
Mark Becker, spokesman for NPPD, said the federal assistance helped the district cover the costs of that disaster without jacking up the rates its customers pay for electricity.
"This really is important for our customers," he said. "That allows us to keep the rates fairly stable. Basically every year we're getting a tornado here, a flood here.
"That would be an enormous amount of money that we'd have to get, to go back to our customers on. Our customers want to continue to keep our rates as low as we possibly can."
Since 2007, the Omaha Public Power District has been eligible for $17.4 million in federal disaster reimbursements. As of last week it had received $13.6 million. Not all of its claims have been processed.
NPPD has received $64.4 million, although it, too, is waiting for some claims to be processed.
Compare NPPD's experience to that of Alliant Energy in Iowa. When floodwaters invaded Cedar Rapids in June 2008, Alliant Energy saw its offices and power plants swamped. Substations, transformers and delivery equipment also sustained significant damage.
The private company's total losses topped $350 million, with only about $100 million covered by insurance. The company looked for federal funding options but found that few were available.
"It's just the reality of the way it works," said Alliant spokesman Scott Drzycimski. "There's the public assistance funding that's available through FEMA for disasters, (but) that doesn't exist for us and our customers."
So the company covered the repairs, and its half million customers will be paying higher rates for years to come in order to recoup those costs. The impact on an average residential customer: about a dollar or two each month, Drzycimski said.
He pointed out, however, that federal taxpayers in Nebraska contributed to other cleanup costs in Cedar Rapids.
"You're never going to be perfectly equal on all of that, but this is one point where you can have a similar disaster in two places and the treatment is going to be different based on the type of entity it is," Drzycimski said.
Although lawmakers in Washington are scrambling to save money, there has been little attention paid to the different ways that public and private power providers are treated after disasters.
"Every once in a while we'll hear it come up that private businesses would like access to FEMA funding, but when they're reminded of their for-profit status and the fact that they can make profit and a nice return on investment all the time, usually that ends it," said Mike Hyland, senior vice president of the American Public Power Association.
Taxpayers for Common Sense spokesman Steve Ellis said it's worth examining how much federal taxpayers in one part of the country should contribute to help keep electricity rates low somewhere else.
The question, Ellis said, is how much of those costs should be borne by public power districts — and by their customers.
Contact the writer:
202-630-4823, joe.morton@owh.com
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