Farmers asked to take part in wind discussions
4/1/2009 11:40:49 AM

By DELORES MEISTER
Norfolk Daily News

   As wind power development legislation moves its way through the Nebraska Legislature, farmers are being urged to take part in an upcoming legislative hearing to make their concerns known about possible changes in the states wind power energy plans.

   “We’re all people who are affected by this,” said Graham Christensen of Lyons at a recent Farmers Union meeting.

   Of concern to Christensen and others is legislation that would affect the current Community-Based Energy Development (C-BED) law that requires farmers and landowners to have the opportunity to invest in wind farms.

   “Wind is one of our most abundant natural resources. Nebraska is one of only two states in which we can own and invest in wind energy projects, so why would we give that right away?” Christensen asked.

   Christensen and other Farmers Union representatives say Legislative Bill 561 which will be heard Friday before the Legislatures Natural Resources Committee would change Community-Based Energy Development. In essence, it would curtail private citizens from investing in wind energy, the Farmers Union says.

   Supporters of the legislation argue that wind power development in Nebraska may be delayed a golden opportunity missed, in effect because average Nebraskans cant afford to put up the investment capital needed for some large wind projects. Because of that, Nebraskas involvement in wind energy development will not be all that it can be, supporters said.

   The Nebraska Farmers Union and others dispute that contention.

   “With C-BED as it is written, suppose you had the opportunity to sign into a 20-year signed power purchase agreement to sell your wind energy. It is very possible for Nebraska individuals to invest in wind farms. You don’t necessarily need tens of thousand of dollars to invest,” Christensen said.

   “C-BED allows Nebraska residents to invest in wind farms by joining with other qualified Nebraska owners who then team up with an equity partner,” Christensen said.

   The equity partner makes use of available production tax credits (PTC), which is the major driver of wind energy development nationwide, as a way to offset taxes in other areas of income.

   “Nebraska investors have to put up only 1 percent to 5 percent of the production cost of the wind farm. The equity partner provides the rest. In addition to incentives and depreciation advantages, the equity partner also benefits from the sale of energy because 95 percent to 99 percent owner for a positive return on investment,” Christensen said.

   “What’s attractive about the C-BED legislation is that after the 10-year life span of the production tax credit expires, the project is paid off, the ownership flips and the minority Nebraska owners now become the 99 percent owners,” he said.

   C-BED maximizes rural economic development by allowing economic benefits to stay in Nebraska. Under the laws current form, 33 percent of the gross power purchase agreement payments return to the investors and local community.

   “But an amendment added to LB561, if passed, would bring significant changes to the law. It would turn a significant portion of local community’s 33 percent return over to third-party financing entities,” Christensen said.

   By bringing in a third-party financer for principal and interest purposes, the debt financing would have to be paid to the third party, thus potentially removing income that Nebraska private investors would be making and thus reducing profits generated by wind power.

   But supporters say that those third parties are needed for Nebraska to maximize its potential for wind energy development.

The other issue deals with the initial language of LB561. This allows all wind development models (not just C-BED wind projects) to be able to have the ability to negotiate away public powers eminent domain authority for renewable energy projects.

   Christensen stated that allowing multi-national electric utilities to have this ability when developing wind in Nebraska worries him.

   “Looking down the road, I could see how this could open up a crack that would invite these utilities to set up shop in our state and jeopardize our prized cooperative-owned power system,” he said.

Nebraska is the only state with 100 percent public ownership of utilities.

   “Leases for land and wind seem like a lot of money until you compare it to what you get when you have ownership in it,” Christensen said. “The income will be huge, and it is in the best interests of Nebraskans to keep ownership in renewable energy as we move quickly into the future we are opposed to amending or changing C-BED as it was originally written.”