Legislative Issues

By Pete McClymont

 

As the Legislature convenes on Jan. 9, 2008, there may be issues related to beef producers that will be introduced, debated and either killed or passed. Nebraska Cattlemen leadership and staff will be present in the upcoming 60-day session, working for members and their policy.

One issue that will be further debated is the implementation of wind energy as part of the state’s portfolio in the creation of energy. Coal, nuclear, natural gas, diesel/oil, wind, hydropower and methane are the sources of generation, with coal obviously being the most widely used. LB 629, the Rural Community-Based Energy Development Act, was introduced by Senator “Cap” Dierks, passed by a unanimous vote of the Legislature and signed into law by Governor Dave Heineman on May 21.

LB 629 is essentially a method that can be utilized within the framework of Nebraska’s public power policy to implement wind energy for state and national energy needs. And because Nebraska is the only state in the union that has a public power policy established in statute, unique challenges and questions need to be addressed.

Public power originates all the way back to 1887 when the City of Crete formed the state’s first electric department about the same time farmers in western Nebraska were devising ways to store water for irrigation. By the early 1930s, several hundred municipal utilities were in place, 42 private electric companies were owned by five holding companies and the construction of several hydropower projects was under way. According to the Nebraska Power Association, in 1933 the Legislature created the statutes that govern public power districts and, between 1934 and 1946, investor-owned utilities were absorbed by the public power districts, making Nebraska the only totally public power state in America. 

Facts bear out the low cost and the financial return of the benefit of public power (or not for profit utilities) for Nebraska citizens. Using 2004 data obtained from the Energy Information Administration’s Annual Electric Utility Report, Nebraska ranked eighth nationally in average revenue per kilowatt-hour for all retail customer classes at 5.70¢. The national average was 7.62¢. Wyoming, which sits on vast coal reserves, was 4.98¢ in the 2004 cost comparisons. Savings also is returned to Nebraskans in the form of tax-exempt revenue bonds as a means to finance construction and expansion projects with the net result for customers being lower rates for investments in facilities and equipment.

Wind power in Nebraska currently generates approximately 73 megawatts of power in five locations across Nebraska – Ainsworth, Kimball, Lincoln, Valley and Springview. That resource could provide enough power for approximately 21,500 averaged-sized homes. According to a study conducted by Pacific Northwest Laboratory, Nebraska has the sixth most potential for wind-generated power behind North Dakota, Texas, Kansas, South Dakota and Montana, but only ranks 18th nationally in terms of megawatts installed. There has been $95 million invested in wind-power generation in the last 12 years in Nebraska.

It would seem to be a “no brainer” to develop more energy in the form of wind generation. But other factors need to be recognized relative to renewable energy.

Wind is an intermittent source of energy and is not reliable. Also, wind obviously is not available for generation of electricity 24 hours a day, even though we as consumers expect to have electricity when we flip a light switch on or want our air conditioning to work or irrigate our fields day and night when it’s hot.

Constructing or upgrading infrastructure of transmission lines to accommodate wind farms could cost between $250,000 and $1 million per mile. The storms in December 2006 that decimated so many power lines bear those figures out.

Using national and state construction figures, new wind-powered generation costs are approximately 4-6¢ per kilowatt per hour. Nebraska Public Power District forecasted production costs in 2007 at the Gerald Gentleman Station, a coal-fired power plant and one of the top six most efficient coal-fired power plants nationally, to be approximately 2.4¢ per kilowatt-hour. Wind is generally more expensive than existing coal-fired or nuclear power facilities, but less expensive than natural gas-fired generation plants.    

All this boils down to the fact that Nebraska has public power policy mandated by the people and least cost production of that power can possibly compete with more expensive wind generated energy.

You should consider these points carefully if you are approached for a land easement for a wind farm.

 What are the concerns when being targeted for land easements for a “wind farm”? Is the agreement for the easement a legal document? (Please consult an attorney.) Examine the aspects of long-term payments with respect to inflation, taxes and loss of future production. Insist on a provision for the right to renegotiate payments, determine liability issues, property tax liability and who will be responsible for the removal of the towers at the end of their life.

Going “green” has become a national, if not a global focus and has the potential to be a very constructive and obvious objective. But what it means for you and your fellow Nebraskans is practical and demanding. Before jumping on the proverbial wind-powered bandwagon, think what it will mean to you, remembering that earlier Nebraska generations had the foresight to establish efficient, inexpensive public power policy. Y Pete MyClymont is NC’s vice president of legislative affairs.