World-Herald editorial: Wind energy bill proposes sound course

The Nebraska Legislature's Natural Resources Committee has done its job, and done it well.

It has written a solid measure that would change the wind energy laws in Nebraska — not to create a “gold rush” but to open the borders to good companies seeking honest deals with Nebraska landowners.

The measure also would carefully protect Nebraska's unique public power system. Among the important criteria set by committee chairman Sen. Chris Langemeier before the process began was that any changes should not raise the price of electricity or harm reliability for the state's ratepayers.

After the proposal is approved by the committee, as it should be, it will move to the legislative floor for scrutiny by all 49 senators. Nebraskans can be pleased with their senators if they approach LB 1048, as amended, with the same seriousness, spirit of cooperation and diligence shown by the Natural Resources Committee.

Landowners, the state's public utilities and representatives of many wind-energy companies gave their approval to the legislation at the public hearing last week.

The term “modern-day gold rush” was raised in a letter by wind developer Michael Donahue that was read at the hearing. He called the process “the essence of successful consensus-building” and agreed with other developers that, while they may not love every provision in the bill, it would do the job.

A “gold rush” is just what Nebraskans should not want. The term implies boom-and-bust, money-hungry speculators flooding into a state, making slippery, hasty deals with flustered landowners, grabbing whatever they profitably can and running home. The law is carefully crafted to prevent any such thing.

Elements of the measure are still contested by some interests, who will undoubtedly present their arguments to all 49 lawmakers. For instance, some industry representatives are bothered by the provision that wind companies sell 90 percent of the energy they produce to out-of-state companies using 10-year contracts.

The requirement would protect the prices that Nebraska's public utilities get for the power they sell on the spot market from possibly unfair competition by wind generators. Public power representatives, who appear to have traded much of their right of eminent domain for the provision, have produced general figures on just how much they might lose without the qualification. State senators may want to hear more specifics.

Some of the questions asked by committee members during the public hearing centered on what protection landowners had if a wind farm went belly-up in the 10-year period before it was required to set up a decommissioning fund. Given the 90 percent contractual requirement, that doesn't seem likely.

However, there is a small amount of risk involved. Several landowners said it is a chance they'd gladly take. As Jim Young of rural Kimball County noted, “It's less risky than farming.”

In the amendment to LB 1048 that will become the final bill, Langemeier outlined an unusual method of taxing wind energy facilities that would stretch out the tax benefits over 20 years. The provision exempts wind-related equipment from the state's personal property tax. Instead, it substitutes a “nameplate capacity tax,” applied to each megawatt of wind farm capacity, not each megawatt actually produced.

The taxation method seems reasonable. Lawmakers will probably want to debate the rate — the tax rate suggested in the committee's bill is $3,518 per megawatt capacity — and the issue itself.

Perhaps not every wind developer will come knocking on Nebraska's door if the Legislature approves LB 1048. But many of them will. Enough, it appears, to provide many small communities with the economic development they need and many farmers and ranchers with an infusion of cash and some desirable property tax relief.

LB 1048 would reinforce a sense of cooperation, a willingness to work out problems and a welcoming atmosphere for investors and developers. That's Nebraska, and that's a fine outcome.

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