New life in rural areas?

LINCOLN — Look south from Interstate 80 in Nebraska's Panhandle and you will see a nearly endless string of wind turbines on the horizon.

But none of the nearly 340 bright-white towers is in Nebraska; they're all across the border on the scrubby, high plains of Colorado.

The sight of multimillion-dollar wind farms in adjacent states — but not in Nebraska — has been a constant irritant for many lawmakers and their constituents.

It doesn't help that the Colorado wind farm, which already has five times the number of turbines as exist in Nebraska, is in line to get even more turbines, thanks to $100 million in federal stimulus funds.

“Everyone is asking the question, ‘Why can't we develop it here?'” said State Sen. Ken Haar of Malcolm.

Ogallala Sen. Ken Schilz, who can almost see the massive Peetz, Colo., wind farm from his front porch, said wind development, and its potential to revive rural communities, has become a top topic among his constituents.

“If there's economic opportunity,” Schilz said, “the State of Nebraska needs to step up and be able to allow the same kinds of opportunities here.”

The two senators and others predict that 2010 will be a big year for wind in the 60-day session of the Nebraska Legislature, which will begin Jan. 6.

Although the state has passed laws in recent years to encourage wind development, Nebraska still ranks as a major underachiever in wind energy. And Nebraskans, particularly rural residents and their senators, are taking greater note.

Nebraska is now ranked No. 3 among the states in its potential for wind development, according to recently updated estimates by the National Renewable Energy Laboratory. But the state sits a lowly 22nd in wind-power generation capacity, with 153 megawatts.

By contrast, Iowa is No. 2 among states in wind generation, with nearly 20 times the generating capacity as Nebraska.

The Cornhusker State, with its unique status as the nation's only public power state, has always presented more hurdles for wind development. Public power utilities, for instance, don't qualify for major federal incentives to build wind farms.

But Nebraska lawmakers say 2010 will be the year for legislation to open the state to larger, private wind farms that can export wind energy to other states.

That, they say, will involve making the state more attractive to “big wind,” the private developers who are building the big wind farms in places like Colorado and Iowa.

Schilz, who represents Banner County, where a 1,000-megawatt, 300-turbine private wind farm has been proposed, said such huge developments require out-of-state investors.

“You're not going to get that kind of investment from Nebraskans,” he said.

With that in mind, Schilz is working with a new wind power group, the Nebraska Energy Export Association, to develop ways for private wind companies to build turbine farms in Nebraska and help finance the construction of transmission lines to export that power to other states.

“We're continuing to let our neighbors pass us by,” said Andy Pollock, who lobbies for the export group, which includes influential members such as the Nebraska Farm Bureau and Nebraska Cattlemen.

Pollock said his group has four main goals in 2010:

ŸOpen the market to private developers who don't wish to use the existing “C-Bed” model, which requires Nebraskans to be the prime investors but also keeps more profits local.

ŸAllow public and private partnerships to build electric transmission lines. The export group wants a mechanism like revenue bonds to allow private companies to finance construction of the expensive lines, which would be built and owned by a public utility. Such lines would be a key component in shipping the wind power to export markets. Public power entities, meanwhile, want to ensure that ratepayers aren't liable for debts if a wind farm fails.

ŸModify the state tax structure. Senators have discussed putting an excise tax on wind energy production rather than imposing a personal property tax on wind farm equipment, which lasts only five years and triggers a huge bill in the first year.

ŸPreserve the state's public power system, which has provided some of the lowest rates in the country to Nebraskans, but wasn't designed to generate excess power for export.

Similar goals were discussed recently during a wind-power task force meeting led by Sen. Chris Langemeier of Schuyler.

Langemeier, who is chairman of the Legislature's Natural Resources Committee, has committed to making wind a priority and to push legislation that shows that Nebraska is open for business to private developers.

The committee's wind bill is still being drafted, and it might change significantly after introduction, Langemeier said. He made it clear, however, that he wants the state to be ready to capitalize on the need for increased wind power when the economy turns around and demand for electricity increases.

John Hansen, president of the Nebraska Farmers Union, defended the “C-Bed” model of building wind farms, which his organization promoted.

C-Bed requires Nebraska investors, which keeps the profits here. It also has a unique tax benefit: Purchases of components are tax-exempt. Critics, however, say C-Bed works only for small and midsize wind farms, which are too small for the export market.

Hansen said wind development is suffering not because of C-Bed, but because of the economy and a drop in energy demand. A much-delayed Nebraska C-Bed project near Crofton, Neb., is back on track for construction this spring, he said, after resolving its financing issues.

Rather than chasing after big wind corporations, he said, the state should focus on wind developments that provide power to Nebraskans and that keep the profits here.

Shelley Sahling-Zart, who represents the Nebraska Power Association, a group of public power utilities, said her members don't oppose bigger, privately owned wind farms as long as development costs and liabilities aren't shifted to ratepayers.

The mission of public power is to provide the lowest-cost electricity for Nebraskans, she said — not to build wind farms and expensive transmission lines to serve customers outside the state.

“People will think we're dragging our feet,” Sahling-Zart said. “But we have to be careful of how we proceed so we don't put an inordinate expense on the backs of ratepayers.”

Private firms, not public power utilities, need to assume the risk for construction of transmission lines and wind farms that are designed to export power outside of the state, she said.

“Public power is open to a lot of things, depending on how much risk is shifted to us,” Sahling-Zart said.

Contact the writer:

402-473-9584, paul.hammel@owh.com

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