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A bill that would remove several requirements in the approval process for privately-owned renewable energy projects to encourage more investment in Nebraska was heard before the Natural Resources Committee last week. We had a full house of testifiers including proponents, opponents and a record number of neutral testimony.
LB 824 would be a significant policy shift for Nebraska as it would allow the development of privately-owned renewable electricity generation facilities without the barriers and protections placed in the “wind for export” bill passed in 2010. As a member of the Southwest Power Pool (SPP) we do not control which type of power will supply the grid. The SPP chooses the cheapest source that is capable of filling the need at that particular time. Wind power which has a federal tax credit would be the cheapest energy available because of the tax credit.
LB 1048, passed in 2010, created a new regulatory approval process for renewable generation facilities producing energy to be exported out of Nebraska. The bill was the result of work between developers, the Power Review Board, and our public power entities to allow the development of wind energy in the state while protecting public power interests. While LB 1048 provided the opportunity, the public power protections kept private developers from building large-scale renewable projects in Nebraska.
In 2014, the Legislature passed LB 1115, which provided for a study to identify opportunities and challenges that impact the capacity and desirability of developing 5,000 to 10,000 megawatts of renewable generation capacity in Nebraska for export. The report gave policy options for the Legislature to consider to overcome challenges towards increasing private renewable energy investment. LB 824 would make some of those policy changes.
Specifically, LB 824 would accomplish the following:
Remove current anti-competitive statutes covering the Nebraska Power Review Board process for private renewable energy development, which are not applicable in states neighboring Nebraska and are a costly barrier for companies seeking to do business in this state. The main obstacle would be the current requirement to have a power purchase agreement in place before you can begin a project.
Maintain the notification and registration of all renewable energy development projects by the Nebraska Power Review Board and would not remove the requirement to comply with the 52 existing governmental permits from 15 separate federal agencies;
Would not impact any existing local control by counties which have zoning ordinances or oversight processes or mechanisms to either approve or deny renewable energy projects. There are however, numerous counties that do not have zoning laws and would not have the local control to regulate where these turbines would be located.
Would not allow privately developed and other renewable electric power generation facilities to provide direct electric service to retail or wholesale end use customers.
Allowing wind development could bring in hundreds of millions of dollars in investments and would help reduce property taxes in those areas that are suitable for development.
There are several concerns I have with this bill dealing with the short and long term consequences of this major policy change. Currently we have around 25% surplus generation capacity and the Southwest Power Pool also has surplus capacity. As with corn when you have a surplus you have low prices, with surplus energy you have low priced electricity on the market. If we add large amounts of wind generation we put more cheap energy, because of the production tax credit, on the market thus lowering the price of energy even further. If our publicly owned generation facilities are losing revue because coal plants are running at minimum capacity they will need to pass those costs on in their transmission rates and thus the consumer may end up paying more for power in the long run. This is an extremely complex issue that will have long term implications and we need to get it right. Any power generated would be directly competing with our publicly owned facilities.
Also, the Aurora Chamber of Commerce and I will be hosting a Town Hall Meeting, February 15 at 4:00 p.m. at the Senior Center, located at 1205 11th St., in Aurora. It will be an opportunity for me to visit with you about your concerns and to provide an update on legislative issues. The meeting is open to the public and anyone wishing to attend is invited.