By Chad Waldow, Southern Public Power District general manager

    In the evolving energy landscape, the growth of electricity demand, also known as load growth, can seem like a double-edged sword for Public Power Districts across Nebraska.  While it presents challenges in terms of infrastructure, resource management and sustainability, it also has positive effects for the industry. Load growth can function as a catalyst for long-term financial stability, economic development, system improvements and technological innovation.
    Load growth refers to the increasing demand for electricity over time, driven by factors such as population growth, economic development, and rising standards of living. For electric utilities across the county, understanding and managing load growth is essential for ensuring reliable, affordable electric service for all.  Therefore, optimizing resources and planning for future infrastructure needs is critical.  

Planning and Building for the Load
When load growth comes all at once or in large quantities, it can create a series of challenges and have significant impacts on both the utility and its customers.  The direct impact of load growth on Public Power Districts is the need for expanded infrastructure. As electricity demand rises, Districts must ensure the generation, transmission, and distribution systems can handle the increased load  which may require substantial investment. Districts may need to invest heavily in infrastructure upgrades, either through the construction of new facilities or the reinforcement of existing ones.  The process of expanding infrastructure often involves extensive engineering studies, long lead times for materials and equipment, and the coordination of resources and construction schedules.

Reducing the Risk
The financing of this new load can be challenging as infrastructure costs continue to increase.  This can be done by socializing the cost across customers District-wide, typically done for organic load growth.  The second option is to charge the new load directly for the cost to connect to the system, typically used for new, large step-loads (more than 5MW).  When these large loads finance the cost to connect, they reduce the overall risk to the remaining customers of the District.  A portion of this investment is paid back to the customer by the District over a period of time, ensuring the customer will be connected for that duration.  

Managing the New Load
The District must manage the infrastructure challenges, but also must consider how the new load fits into the District’s current load pattern.  To manage growth more effectively, some Districts introduce programs that encourage customers to reduce their energy consumption during peak periods.  These programs can help reduce the overall peak demand, thus slowing the need for additional infrastructure expansion.  This demand side management works to increase the load factor of the District, increasing the efficiency of the overall system.  

Benefits across the District
As more electricity is consumed, utilities have more billing units.  These billing units equate to more overall revenue.  In this context, load growth can be seen as a financial boon, allowing Districts to recover operational costs more efficiently and lower the overall burden on the remaining customers.  
    Furthermore, sustained growth in electricity consumption over time can help utilities recover the costs of large-scale infrastructure upgrades, such as new substations, expensive maintenance projects or technology investments. These investments often involve significant capital expenditures but can be easily justified and paid off by spreading the cost over more billing units.  

In Summary
The new load growth comes with challenges including planning, construction and the overall burden on the electric grid.  There is financial risk with new electric load and a fair proportion of the District’s costs must be assigned to the new load.  After careful consideration of all these factors, load growth can propel the District to new levels of financial strength and reduce rate pressure.  This also can be leveraged for system improvements and upgraded technology to increase reliability for all customers.    
    Public Power will carefully navigate through times of growth like we are seeing now and be cautious in times when there is none.  Public Power in Nebraska has looked for the best interest of all our customers for many years and will continue to do so in the future.