Nebraska lawmakers look to boost renewable energy industry

Source: By SNL • Posted: Friday, January 30, 2015

A bipartisan group of Nebraska lawmakers has introduced a package of five bills aimed at boosting the state’s renewable energy industry.

The proposals deal with creating financial incentives, streamlining processes for renewable energy projects and calling for a state energy plan.

One proposal, Legislative Bill 423, would create a production tax credit for renewable electric generation facilities and allow that credit to be transferable. State Sen. Jeremy Nordquist, who is sponsoring the proposal, said without a state production tax credit in place, surrounding states have a competitive advantage over Nebraska.

According to the most recent figures from the American Wind Energy Association, Nebraska is behind all but one of its neighboring states in terms of installed wind energy capacity, at 534 MW.

“This would put Nebraska on a level playing field by helping our state compete for projects designed to export electricity out of the state as well as benefitting Nebraska ratepayers by providing cheaper available electricity for in-state utilities,” he said in a statement.

Nordquist’s bill would create a renewable energy tax credit calculated in one of two ways. The first is a credit of 1.5 cents for each kilowatt-hour of electricity generated for the first 10 years of a renewable electric generation facility’s commercial operation. The other option is a one-time credit equal to 30% of the total cost of construction, up to $2 million.

The renewable energy tax credit would be available for renewable electric generation facilities that start commercial operation on or after the effective date of the act.

A bill from state Sen. Al Davis, L.B. 424, would broaden the existing Nameplate Capacity Tax to include projects using solar, biomass or landfill gas as the fuel source. The Nameplate Capacity Tax, created in 2010, is a flat excise tax that replaced the heavily front-loaded personal property tax that early wind energy projects paid.

L.B. 407 simplifies the existing process for the Nebraska Power Review Board to consider a renewable energy export facility. State law now requires a developer to have a power purchase agreement with an out-of-state offtaker.

While agreements exist with most projects, state lawmakers said many developers have reported that the requirement to have the agreement before obtaining the approval created a perception that Nebraska was not fully open for the business of renewable energy development.

The proposal also offers to remove barriers to privately funded transmission development, something the bill’s sponsor, state Sen. Ken Haar, said is needed to help renewable energy development while minimizing impacts on in-state ratepayers.

A proposal from state Sen. Heath Mello, L.B. 412, would simplify the Community-Based Energy Development process. C-BED projects must obtain input from Nebraska companies, suppliers or pay revenues to Nebraska residents that equal at least 25% of the project’s revenues for the first 20 years.

The final piece of the legislative package is a bill from state Sen. Ken Schilz that would require the Nebraska Energy Office to prepare an energy plan for Nebraska by the end of 2015. The plan would be updated every two years.

According to L.B. 583, “The plan shall include short-term and long-term objectives that will: Ensure a secure, reliable, and stable energy system for the residents and businesses in the state; maintain and improve the state’s cost-competitive energy supply and ensure access to affordable energy for all residents; promote sustainable economic growth, job creation, and economic development; and provide the means for the state’s energy policy to adapt to changing circumstances.”