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United States

Nebraska and community wind -- In Minnesota's footsteps

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Wind-rich Nebraska is hoping to spur local wind power development by borrowing a page from Minnesota's legislative playbook and introducing its own version of Community-Based Energy Development (C-BED) legislation. C-BED encourages utilities to pay a higher price for wind production in the early years of a wind plant's life, when the local owner is paying off the cost of project equity and debt, in exchange for a lower price in later years. Under the Nebraska version, the element of the total purchase price to which the C-BED structure may apply is capped at an average $0.03/kWh (net present value) over 20 years.

But Nebraska's C-BED is being enacted in a state with two major disincentives: first, there is no legal requirement for renewable energy in the supply mix; second, the state gets all its electricity from four public power providers, which have no tax bill to set wind's federal production tax credit (PTC) against.

It is the unavailability of the PTC to the state's power providers which is mainly stalling wind, says John Hansen of the Nebraska Farmers Union (NFU). Wind's fortunes in the state also suffer from Nebraska's proximity to cheap Wyoming coal. Nebraska, the sixth-windiest state, has only 73 MW of wind power and none is owned by local communities.

Improving attitudes

The C-BED law, however, is poised to change that. Nebraska Public Power District (NPPD), the state's largest utility, in July invited project sponsors to bid for power purchase contracts under the C-BED program. The utility hopes to bring as much as 100 MW of community wind power online by the end of next year.

"The legislature, with its 49-0 vote, is saying that C-BED is a good tool that we'd be well served to use," says Hansen. "The table has been set and now it's really up to Public Power whether or not they utilise this tool. They don't have to buy C-BED energy but they do need to take a look and report what they've done on an annual basis." NFU has bid in a 40 MW community development in answer to NPPD's request for proposals, which closed in August.

Even if the program proves popular -- and according to NPPD's Mark Becker several bids will be considered in coming weeks -- lack of capacity on the grid network is yet another barrier keeping Nebraska from realizing its vast wind development potential. "We've had a lot of interest from private developers in the C-BED projects," Becker says. "But if you look at the transmission system in the state of Nebraska, the best wind is in the northern region of the state where there is less population and fewer transmission lines. And you've got to basically figure that transmission costs about a million dollars a mile."

Hansen, however, sees ample opportunity to market wind power beyond the state's borders, given that Nebraska sits between the country's eastern and western power grids. "The support for public wind in Nebraska is enormous," Hansen says. "If they can do this in other states, we have to figure out a way to do it here. It's what Nebraskans want."

Meanwhile, NPPD plans to increase Ainsworth, the state's biggest wind farm, from 60 MW to 75 MW. "The transmission already there will handle that," Becker says. "NPPD is committed to adding wind as part of its portfolio. But we want to come in at the lowest price so the rates of our customers don't go up significantly." Hansen believes C-BED is a way of achieving that.

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