OPPD Board of Directors Feedback SD-11

Economic development is a complex and debated concept and needs to be clearly distinguished from economic growth. The latter is typically defined and measured by increases to GDP, and despite widespread use is also generally recognized by social scientists to be an unreliable indicator of economic development and community wellbeing.

Economic growth may occur as a byproduct of specific OPPD economic development goals, but it should not be a goal in itself. (There is a similar problem with maintaining a goal of 20% lower rates than others as a goal in itself in SD 2, which should be changed instead to a goal of affordability). The Intergovernmental Panel on Climate Change working group 2 report on climate adaptation published in early 2022 warns new models of development are required and that where measures of economic development “maintain core notions of … economic growth seen in more mainstream models of development, they are less vehicles for transformation than continuations of thinking and action fundamentally at odds with the needs of climate resilient development.” (IPPC 2022 18-20)

SD11 as proposed does not provide staff with guidance on what kind of economic development, or growth, is or is not in the interest of OPPD customer owners. “Economic growth,” “Sustainability,” “cost savings,” or “vitality” are proposed as separate goals to be supported through a sweeping and undefined set of “tools, resources, programs, or rates.”

These goals may come in conflict with each other as in the case of past data center recruitment, which has potentially undermined sustainability goals and has potential to undermine cost savings through the construction of new gas infrastructure to meet SPP requirements triggered by those data centers’ additional demand. The district customer-owners bear the risk of stranded gas generation assets in the event of aggressive climate regulation while Facebook and Google claim they are 100% renewable. Continuing to recruit large industrial/commercial consumers may thus conflict with decarbonization goals with limited net local benefits compared with other uses of district resources.

The goals of economic development are fundamentally political choices for which the political representatives elected to govern OPPD are primarily accountable, not staff, who are implicitly charged the responsibility for determining those priorities and tradeoffs in this SD draft language.

OPPD should prioritize economic development in the areas where it is most needed and only devote resources to projects which clearly further other strategic directive goals as well, for example affordable bills and sustainability. Economic growth in some forms may serve these goals, other forms will not. There are important ways to achieve economic development as conceptualized by development economists like Amartya Sen and reflected in the United Nations’ Sustainable Development Goals. For example, through assisting customers with energy efficiency and reducing pollution through beneficial electrification that can provide more opportunities for health, leisure, and education marking progress on a Human Development Index, but may not grow GDP.

We have very low unemployment rates in the district as a whole. Rather than planning to attract any and all new businesses (potentially at the expense of current residents) OPPD should be targeting the specific types of businesses most likely to improve wellbeing most broadly and in geographies of the district where economic development need is greatest.

It is unclear to me what “assist with…marketing efforts for large businesses and industrial customer-owners” means. But this seems to be an example of methods rather than goals which are the key purpose of the SD. I would also point out that industrial businesses are not themselves customer-owners of OPPD, only the people who vote in the district are.

A 2020 article in the journal Nature Communications by Wiedmann et. al. “Scientists’ Warning on Affluence” summarizes the literature on the economic development challenges of addressing climate change and offers a number of suggestions which OPPD as public power is well positioned to take up in its approach to economic development.

“First, replace GDP as a measure of prosperity with a multitude of alternative indicators and be agnostic to growth. …
Second, empower people and strengthen participation in democratic processes and enable stronger local self-governance. Design governance and institutions to allow for social experiments, engagement and innovation….
Third, strengthen equality and redistribution through suitable taxation policies, basic income and job guarantees and by setting maximum income levels, expanding public services and rolling back neoliberal reforms (e.g. as part of a Green New Deal).…
Fourth, the transformation of economic systems can be supported with innovative business models that encourage sharing and giving economies, based on cooperation, communities
and localised economies instead of competition.”

Strategic Directive 11, charges OPPD management with promoting regional economic development.
But by what methods and to what end?
I hope that OPPD, in promoting economic development, does not also reward carbon intensive practices in industry.
I also wonder whether the costs of OPPD’s efforts at economic development will affect residential rates.
If management’s promoting of economic development is to serve the overall goals of reliable, affordable, and environmentally sensitive energy – as well as the goal of becoming carbon neutral by 2050 – they will need specific directions in SD 11 that address these concerns.

Why is OPPD focusing on economic development? And what are the actual tangible ways you plan to do this? The edited document (which shows the comments that have been struck through) gives more clear info than the final document. How is economic development even within the scope of OPPD's mission and intent? I kind of understand the connection between OPPD and economic development via this now redacted line: "Promoting economic growth and vitality through the production of affordable, reliable, and environmentally sensitive energy is key to the success of oppd." Per this statement, your main purpose should be reliable, affordable, and environmentally sensitive energy which JUST HAPPENS to foment economic growth. The non-edited/final document is pretty vague - just HOW will OPPPD "attract, retain, and expand businesses?" And also, again, why is that one of your focuses anyway? How will you serve as a trusted partner (bullet 2)? And what are these statewide initiatives? Would this include the new lake between Omaha and Lincoln, or what is that referring to? Basically, all your bullets are vague and general and really do not leave the citizen with much to comment on beyond "please just do your main job first, then dabble in economic development." Maybe this is an issue of writing, and you need to create a better and more informative document to ask for input on.

Sounds good to me. I am curious what prompted the change.

I'll reiterate and elaborate a bit on my comments given at the May board meeting. Economic development should not be a major emphasis for OPPD. To the extent that OPPD is involved it is vital that OPPD's mission of affordable, reliable and environmentally sensitive is part of any economic development. Too often the environmentally sensitive takes a back seat to the other two missions. As OPPD continues with their Power with Purpose initiative, it is vital that new development emphasizes energy efficiency and renewable energy when possible. Businesses that have EV fleets should be encouraged. Since CEO Fernandez is chairing the Core Development in downtown Omaha, he should be a champion for sustainable and energy efficient new and repurposed buildings that also include renewable energy. SD-11, the Omaha Core Development and the State's Blueprint Nebraska should specifically acknowledge the importance of addressing climate change. Young workers who are a recruitment target for economic development want to live where climate change is seriously addressed.