Nebraska set to introduce legislation enabling renewable energy sales

US: Exporting renewable energy is likely to become big business in windy Nebraska, following new legislation intended to encourage wind project development by private firms while protecting the state's unique public power structure.

by Mark Anderson 1 May 2010

The bill, which becomes law in July, gives the Nebraska Power Review Board authority to approve new projects by private firms, but will make them reimburse public power companies for the cost of building transmission lines that export electricity to population centres in neighbouring Colorado and elsewhere.

"We've got very good wind resources in the west end of the state, but we don't have very many people," says longtime wind advocate John Hansen, president of the Nebraska Farmers Union. "So if you're not taking that power towards where the population is, then where is it going?"

Nebraska, the only state with 100% publicly owned utilities, has long been stymied in its efforts to develop wind projects because of low coal-based power prices, sparse population and the legal rights of public power to control development. It is the second-leading alternative-energy producer in the US largely due to ethanol, but had only 152MW of wind power at the end of 2009, despite its top-five ranking for wind resources.

"We have the fifth-lowest electricity rates in the country, which is a blessing if you're buying as a customer, but it's a real challenge if you're trying to sell electricity in Nebraska," says Hansen. "We've been stuck at about 1.9 million people for a very long time - we have over three times more cows than we have people."

The new law will also apply to solar, biomass and landfill gas. Private developers will need a power purchase agreement of at least 10 years. But, by selling at least 90% of generation outside the state, they will be protected from Nebraska's eminent domain laws, where the state government takes over private land with a payment. These laws originated in the 1940s, when investor-owned utilities were condemned and their properties turned over to public power districts.

"Private companies clearly will be exempt from eminent domain," says Hansen. "But if they would start trying to sell energy into the Nebraska grid and compete with public power, then the eminent domain is still there for public power to police its turf."

Nebraska is now looking to attract related businesses and create a supply-chain industry.