Wind-power incentives remain popular in Nebraska

AP News
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Posted: Dec 30, 2009 3:07 PM

The idea of expanding wind power remains popular among Nebraska lawmakers, but concerns about cost and preserving the strength of the state's public power system could limit any new wind-power incentives.

In a survey, many senators appeared reluctant to do anything that might jeopardize the state's relatively low electricity rates and some expressed doubts about whether Nebraska's electricity grid is ready to deliver wind power from rural areas, where it would be generated, to urban areas, where the demand is higher.

Plus, the Legislature did approve a new tax break for wind-power projects just last year.

In a pre-session survey of state senators and senators-elect by The Associated Press, 17 of the 49 total said they favored additional incentives for wind power. Ten said they did not, seven were unsure, and 15 senators did not respond to the survey.

"Incentives, as we can afford them, should be a part of our policy as well as seeking transmission solutions," Sen. Kathy Campbell of Lincoln said.

There is little disagreement about the potential for wind power in the state. The American Wind Energy Association says Nebraska has the sixth-highest potential for wind energy of any state in the nation.

But even the senators who say they think incentives are a good idea have different ideas about what kind of incentives would be good.

State Sen. Tony Fulton of Lincoln supports incentives for wind power, but he said lawmakers have to be careful with energy policy.

"All that we do, however, should take care to maintain the integrity of our public-power system," Fulton said.

Nebraska is the only state where all electric customers are served by publicly owned utilities. That has helped limit energy costs in Nebraska, but it's also limited wind-power development because public utilities couldn't collect federal tax incentives. Wind power costs more than other options, and public utilities are required to deliver the cheapest power possible.

Sen. Ken Schilz of Ogallala said he supports wind energy, but doesn't think the state is ready to decide how to help the industry.

"We need to make sure that we understand the wind-energy picture and enact legislation to enable private developers to build wind farms and that those projects be market-driven," Schilz said.

State Sen. Ken Haar of Malcolm says he doesn't think incentives are the problem.

Lawmakers have approved several measures in the past to encourage wind-power development.

A 2007 law that allows community-based groups to invest in wind farms and sell power to public utilities has contributed to some recent wind-energy development in the state.

And last year, lawmakers passed a bill to encourage wind-power development by creating a sales-tax exemption for new community-based projects begun before the end of 2011. All equipment and property used in those projects would not be subject to sales tax.

The wind-power tax breaks approved in 2008 were predicted to cost about $1.3 million.

State Sen. Galen Hadley of Kearney said he's not ready to commit to wind-power incentives because he's not sure wind power is the best source for renewable, alternative energy.

"I want to be sure that we keep energy costs low in Nebraska. Our economy benefits from low energy costs in all areas, including agriculture. I want to know the costs of setting up wind energy and transmitting it to the final user. We also need to explore nuclear energy," Hadley said.

State Sen. Greg Adams of York said Nebraska should focus on other priorities because the state's utilities don't have a good way to export excess power produced now.

"At this point in time there is little benefit to the state in granting more incentives for more energy when we currently have a surplus of electricity and insufficient means of exporting it," Adams said.

State Sen. John Nelson of Omaha said he just doesn't see a need to add more incentives.

"I believe the incentives we currently offer are sufficient," Nelson said.

The 2010 legislative session begins Wednesday.