Wind energy and public power ownership bring out strong opinions at State Capitol

LINCOLN — Increasingly price-competitive electricity from wind and a contentious transmission project in western Nebraska brought electricity to the fore at the Capitol on Friday.

In between a morning briefing marked by vehement anti-wind sentiment and an afternoon hearing for a study on public power ordered by the Nebraska Legislature’s Natural Resources Committee, opponents on the Capitol steps protested wind farms and a 225-mile electric transmission project planned to traverse the Sand Hills.

“There are harsh feelings among senators” who support wind development in Nebraska and those who don’t, said Sen. Tom Brewer of Gordon.

Brewer earlier this year sponsored a bill seeking a two-year moratorium on wind development in the ecologically sensitive Sand Hills region of Nebraska that also includes his district.

The bill at the time did not advance out of the Natural Resources Committee, but the committee requested more time to look at the issue and later ordered a study of the state’s entire public power industry, a hearing on which was held Friday.

Other legislators also had proposed a handful of bills — none successful in the past legislative session — that challenged state-granted advantages enjoyed by Nebraska electric utilities such as the Omaha Public Power District and Nebraska Public Power District.

Those bills had sought to accomplish various ends, including one that aimed to remove public power’s authority to seize privately owned power plants through eminent domain and another that would have let private energy developers sell Nebraskans electricity directly through a model known as retail choice.

Though the bills didn’t pass, the Legislature’s Natural Resources Committee ordered the study to review underpinnings of those bills, which included a look at the regional market in which Nebraska electric utilities participate and how states that have switched to retail choice have fared.

Tim Burke, president and chief executive of OPPD, detailed on Friday public power’s role in attracting new business and expansion projects to the state, in part because of what he said were low rates.

Among the projects lured: a massive Sarpy County data center project to be built by Facebook, which seized on a new rate structure OPPD developed that allows the social media company to completely supply its energy needs with renewable energy from wind.

Retail electric rates in Nebraska are about 12 percent lower than the national average and the state has long boasted its low-cost advantage relative to other regions in the U.S. But that cost advantage has slipped in recent years: Nebraska retail rates were 22 percent below the national average in 2011, according to federal data.

If Nebraska electric utilities are too slow to react to a changing environment, then let private enterprise see what it can do, said Mike Matheson, director of Lincoln-based Americans for Electricity Choice, which supported the crop of bills that triggered the study.

Matheson and other supporters of retail choice in Nebraska say the Facebook deal is an example of how that model could work for all ratepayers, but OPPD officials say such a characterization is incorrect.

“Facebook is buying electricity at market prices and paying OPPD a customer delivery charge. This deal is an example of an aggressive and beneficial risk-management tool that locks in forward pricing,” Matheson said. “Why can’t Nebraska ratepayers have the same by having electric retail choice?”

The legislative committee in the last session unanimously killed the bill proposing retail choice in Nebraska and in its report Friday warned against negative outcomes for ratepayers. Included are negative effects to bond ratings and the potential for “stranded assets,” which is the term used to describe power plants that can no longer compete economically with different forms of generation.

Meanwhile, a contingent of about 70 Sand Hills residents rallied at the Capitol building ahead of the hearing. Some protested wind-generated power and some the planned NPPD transmission line that would traverse the western Nebraska region.