Rural Nebraska lawmaker sees wind energy as an urgent lifeline

Source: By Karen Uhlenhuth, Midwest Energy News • Posted: Friday, December 18, 2015

A Nebraska lawmaker says wind farms, like this one near the town of Elgin, can help rural communities stave off economic decline.

A Nebraska lawmaker says wind farms, like this one near the town of Elgin, can help rural communities stave off economic decline.

State Sen. Al Davis represents Nebraska’s 43rd district.

Nebraska state Sen. Al Davis is a rancher, a longtime resident of rural Nebraska, a proponent of renewable energy, and a Republican. Now going into his fourth year as a state legislator, Davis views this as a propitious moment for his home state to convert much more its abundant wind into exportable energy.

Living in the Sandhills community of Hyannis, with a population of just under 200, he has witnessed the challenges that threaten sparsely populated rural America. His district, which is roughly twice the size of New Jersey in area, has fewer than 40,000 people, and that population is declining.

One way to reverse that trend, he believes, lies in the development of wind energy.

Midwest Energy News asked him to elaborate on his observations and his vision for Nebraska’s future.

Midwest Energy News: You’re a member of a rather small club – Republican supporters of clean energy. How did that happen?

Davis: I look at a lot of what I do in terms of what will benefit my district. I have a wind energy association – the Cherry County Wind Association – in my district. I’m very eager to see that develop.

What is the Cherry County Wind Association?

It’s a group of landowners who have gotten together their 400,000 acres, and their goal is to get wind energy developed in Cherry County. My district is very rural, and we are constantly fighting depopulation. We have this tremendous natural resource out there that should be developed. If it is, it might help to repopulate rural Nebraska.

If wind is going to be developed, we can do it in Nebraska, or we can let it happen somewhere else. There are really pretty significant property tax benefits to wind energy, and that is something we grapple with in Nebraska. We have extremely high property tax rates. Statewide, they average maybe second highest in the country.

Public education is the big driver of property taxes. As far as state government, we are 49th in terms of state funding of public education. So that means the vast majority of funding has to come from property taxes.

So you’re interested in wind energy primarily as an economic development tool, to bring in people?

Yes, western Nebraska is depopulating so quickly, and services are very hard to bring together. [Some] students drive 50 miles one way to to go to school. Wind energy could bring jobs and some stability to some of these areas of Nebraska.

Are you interested in solar energy as well?

Definitely. Amazingly enough, you wouldn’t think of western Nebraska as good solar territory. But because we have sunny days and dry air, there’s more potential there than you might think. I think solar really has a future.

Are you pursuing solar at all in the legislature?

Yes. When wind was developed in the state, everything with the turbine was classified as personal property, which depreciates very quickly. The worry was that we’d have an abundance (of tax revenue) the first few years, then it would be depreciated and there would be nothing left.

The legislature passed the nameplate capacity tax. That changed the way it’s taxed. (The property tax) is lower at first for the development company, but it stabilizes income for the taxing entities….over the life of the turbine.

Solar was not a part of that…..I introduced a bill last year…..We put that in place last year so solar now is treated the same as a wind turbine….It’s never good for a taxing entity to have a huge influx of taxes one year, and then have that depreciate out. Now, they always know what the tax will be.

What sort of clean-energy debate do you expect in the upcoming session?

I think there will be a bill to strip protections from public power. In Nebraska, if a project is built by anyone, public power has the right to say, “We want that project; we want to own that project.” That dampens the ability of developers to come in. There may be some discussion to eliminate that.

What is discouraged by that prerogative for public power?

I think it discourages development. If you want to build a project, you’re going to go to a state where there isn’t that regulation.

Is there much support in the Nebraska legislature for clean energy?

I think we’ve got a lot interest in it in Nebraska. We have had low power rates in Nebraska, and everybody was satisfied with the current arrangement. But rates have been climbing, and Nebraska is losing its distinction as low-rate state.

Iowa has a big wind industry even though its resource isn’t as good as ours. Kansas and Oklahoma have done a lot, and Colorado has a big wind industry. My colleagues are saying that if we don’t do something quickly, our opportunity will be gone. We’ll buy wind from other states.

One problem in Nebraska is we generate more energy than can consume much of the year, so it’s hard to prove a need for more energy. If we’re going to do anything, we have to look to the export market. That means we have to come up with a way to encourage transmission and remove barriers to transmission construction.

What barriers to you see out there?

The biggest barrier we have is that Nebraska is not a very populated state. We need to look to market that power elsewhere, whether it’s to the front range in Colorado or Kansas City or Chicago. Because of our location, transmission is going to be very costly. And turbines are getting more and more efficient all the time, so you can build in less-windy areas and get more energy.

If you were going to serve Chicago, you could build a turbine in rural Illinois and create as much energy (as in a windier place like Nebraska.) That’s a big problem for us. We have to think outside the box as far as how we’re going to get the transmission built.

Are you feeling the clock ticking?

I definitely think it’s a once-in-a-lifetime opportunity.

How hopeful are you that leaders in the state will do something about wind in time?

I am optimistic, but I’m a realist. We’re going to need a production tax credit, and….the rules and regulations that have inhibited development, those will have to go away.

And then I’d love to see – Berkshire Hathaway, I’m going to throw out a name – that’s the owner of most Nebraska wind energy – an entity like that has the resources to do transmission. If we could remove the restrictions, I think that would be viable. If we can get the transmission done, we can compete with anyone. It we wait, it’ll be too late. We’ll be the only state in the Great Plains that doesn’t have a significant portfolio of renewable resources.

I think the thing that would most quickly move Nebraska to a more renewable-friendly status is if we were to lose out on a high-tech industry that wants to go to a state with more green energy. Facebook was looking at Kearney (a city in central Nebraska) and someplace in Iowa (to develop a data center). They went to Iowabecause Iowa had more green energy. That seemed to mobilize interest here that I didn’t see before.

Nothing drives economic change like a corporation saying, “We want something different.”