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Backers of wind power, solar will seek tax credit at next year Nebraska Legislature

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LINCOLN, Nebraska — With Nebraska facing pressure to meet more stringent federal emission requirements, renewable energy advocates will push again next year for a state tax credit aimed at wind farms and solar projects.

Supporters have spent the summer meeting with senators in hopes of passing the production tax credit, which was narrowly defeated by lawmakers this year.

"It offers tremendous economic development and property tax relief for Nebraska," said David Levy, a lobbyist for the Northeast Nebraska Public Power District. "We have some catching up to do, but we have tremendous wind resources."

The proposal by then-state Sen. Jeremy Nordquist won initial approval in the Legislature in April but stalled on a second-round vote because several senators who supported it were excused from the Capitol. Their votes were required to overcome opponents who launched a filibuster to block it.

Levy said he believes the bill has a good chance of passing in next year's session, which begins in January. Nebraska has the capacity to generate far more electricity from wind than the state could ever use, he said, creating an opportunity to sell power out of state.

Levy said the state may be forced to develop more wind energy to comply with President Barack Obama's newest push to cut greenhouse gases from U.S. power plants.

The federal Clean Power Plan rules unveiled this month require states to limit the amount of carbon dioxide produced by 2030. Nebraska Attorney General Doug Peterson and officials from other Republican-led states are fighting the requirements in a federal lawsuit.

Sen. Ken Schilz of Ogallala will usher the bill through the Legislature in place of Nordquist, who resigned in June.

"It's one more step that other states have taken to move their development forward," Schilz said. "Will it work here in Nebraska? I believe it will help."

Nordquist said last year that his bill would help Nebraska compete with states like Iowa, Kansas and Oklahoma, which offer richer incentives and have seen a greater expansion of wind farms.

Opponents argued that the state shouldn't subsidize wind energy and contended the bill would cut into state revenue by allowing wind farms to sell their tax credits to other profit-making businesses to generate cash. Some criticized the turbines as an eyesore in rural areas and complain about the whooshing and thumping noises made by the spinning blades.

The measure could also apply to producers of solar, biomass and landfill gas energy. It would allow companies a 1-cent tax credit for every kilowatt-hour generated for the first two years. The credit would shrink to 0.6 cents per kilowatt-hour over 10 years, after which it would end.

Wind-energy companies could also turn down that option in favor of a one-time tax credit totaling 30 percent of their construction costs, up to $2 million.

Despite having enormous potential for wind energy production, Nebraska ranks 26th in the energy it could generate with equipment currently installed. It lags behind neighboring states Iowa, South Dakota, Wyoming, Colorado and Kansas.

From his doorstep in Kimball County, Jim Young said he can see hundreds of new wind towers on the horizon in neighboring Colorado, but efforts to bring a project to his area have failed because Nebraska isn't competitive.

"Nebraska doesn't really offer much," said Young, chairman of the Banner County Wind Energy Association, which was formed to entice wind farms. "Hopefully we can get things rocking and rolling soon."

Five central Nebraska cities are on the brink of launching a pilot project with solar panels that could help lower their utility costs, but have struggled because the communities can't directly receive federal tax credits.

"The state credits would make a gigantic difference in allowing those communities to put in solar," said Cliff Mesner, a Central City attorney who has worked on the project with Gothenburg, Lexington, Holdrege, Minden and Central City officials.

Renewable energy advocates say Nebraska is far from tapping the full potential of wind, which could produce additional income for farmers and counties to help offset property taxes.

Nebraska will have developed 1,316 megawatts of wind energy by the end of 2016, generating an estimated $8.5 million in local property tax revenue annually for 20 years, said John Hansen, president of the Nebraska Farmers Union. Project landowners and farmers will collectively receive about $5.3 million each year in revenue. Hansen said the bill would also help smaller community projects that use solar energy.

"The numbers are huge, and we just don't have that many new sources of revenue staring us in the face," Hansen said. "Solar and wind both have a real place in helping us diversify our electricity generation portfolio."

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The bill is LB423.

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