Paul Hammel, Omaha World Herald
January 21, 2009

LINCOLN - Nebraska needs to change state laws and sweeten its tax incentives to encourage more wind energy farms, officials said Tuesday.

"Nebraska cannot afford to be left behind in renewable energy production," said State Sen. Jeremy Nordquist of Omaha, who introduced a bill granting tax breaks for wind farms.

Nebraska ranks sixth nationally among states with the most potential for wind development but No. 23 in generation of power from wind turbines, according to the American Wind Energy Association.

A representative of the association said Nebraska's unique status as a public power state has created barriers to wind development that need to be removed.

State Sen. Ken Haar of Malcolm is among about a dozen lawmakers expected to introduce proposals this session on wind energy.

Haar said wind farms would create not only jobs but also opportunities for property tax relief.

"There's been a change of attitude in the state" about wind power, he said. "The time has come. What we should have been doing in the '70s, we need to do now."

Legislative Bill 455, introduced by Nordquist and five other senators, would provide sales tax credits to Nebraska utilities for every kilowatt hour generated from renewable energy sources such as wind.

The measure also proposes a sales tax exemption - like one offered in Iowa and some other states - on equipment used to generate and transmit power from renewable sources.

Two other measures introduced Tuesday would set up a wind energy development zone task force to identify the best locations for wind farms and provide $2.4 million in funding for the University of Nebraska-Lincoln to set up a wind-energy program.

Last year, the Legislature passed a law to overcome a long-standing barrier to wind development in Nebraska - public power utilities do not qualify for federal production tax credits. The law set up a way to access those tax credits, which are an essential incentive for wind farms.

Hans Detweiler of the American Wind Energy Association said Nebraska needs to do more.

For instance, Detweiler said, the state needs to amend its rules for approving new power generating facilities to take into account exports to other states and not just in-state generating needs.

Public power has served Nebraska well, he said, but existing laws didn't envision the potential for exporting power to other states.

A federal report done for the Nebraska Energy Office said in October that Nebraska could see $140 million to $260 million a year in construction, up to $27 million a year in lease payments and $29 million in property taxes per year if 7,800 megawatts of wind farms were built by 2030.

That amount of electrical generation would be double the current summer peak demand in Nebraska. The federal report assumes that the nation would be generating 20 percent of its energy from renewable resources by 2030.

Such changes would require an incredible investment in new electrical transmission lines, which are the main hurdle to exporting wind energy, said representatives of the Nebraska Public Power District and other public utilities. Transmission lines cost $1.5 million to $2 million per mile.

Dave Rich, NPPD wind energy expert, said federal funding and coordination will be needed so that Nebraska's low electric rates are not adversely affected.

Although the details of President Barack Obama's stimulus plan for alternative energy have not been finalized, Detweiler said, billions of dollars are expected to be available for transmission lines.

The federal production tax credit for wind power also has been extended for three years, he said.