2009 Nebraska Energy Plan


by Steve Case

Case, Steven
scase@mcgrathnorth.com
(402) 341-3070

In 1991 Nebraska developed its first energy plan.  This plan is now being updated.  Through the input of many in the latter part of last year, the Nebraska Energy Office has developed the 2009 Nebraska Energy Plan (“Plan”).

This Plan offers a vision of the role that Nebraska’s state government agencies, officials and elected representatives can play in solving energy problems and shaping Nebraska’s energy future. The United States government and private entities outside Nebraska must address larger issues such as funding for energy research, regulation of interstate and international energy markets. Nebraska’s Plan takes steps to identify and move toward more stable, independent patterns of energy generation and use.

The 2009 Nebraska Energy Plan covers:

Agriculture

Agriculture is a substantial user of energy, and energy costs are a significant agricultural expense. In 2007, approximately 45.6 million acres of land, totaling nearly 93 percent of Nebraska’s total land area, were devoted to agricultural.

The agricultural sector in Nebraska consumes energy in the form of diesel, gasoline, natural gas, propane, and electricity. Expenditures are both direct, for farm equipment and irrigation, and indirect, through use of pesticides and fertilizers.

The Plan undertakes special efforts to encourage energy efficiency and conservation in all aspects of the agricultural sector, including:

  1. Using currently existing agricultural organizations to disseminate information on energy saving techniques and opportunities.
  2. Promotes the use of alternate fuel, for agricultural vehicles and equipment.
  3. Maintain efforts to make the agricultural sector more aware of funding opportunities for increasing energy efficiency of buildings and equipment.
  4. Work with other federal and state agencies to help farms recycle the waste they produce.
  5. Cooperate with federal officials and representatives to establish incentives for the conversion of farm equipment into E85-ready vehicles.
  6. Collaborate with the Nebraska Department of Agriculture, the U.S. Department of Agriculture and Nebraska utilities to provide energy audits to farms at little or no cost.
  7. For irrigation, promote research on drought resistant crops, and partner with UNL extension services to promote research and implementation of best practices in  irrigation.

Buildings

Public, commercial, individual and residential buildings are one of the largest energy users in the economy.  The Plan includes numerous components to reduce energy use in both new construction and existing buildings.

  1. Nebraska Building Codes. Nebraska adopted its first building energy code in 1980. That code was updated in 1983, and replaced in 2004, when the state legislature adopted the 2003 International Energy Conservation Code (IECC) as the energy code for all new buildings constructed within the state, and for certain substantial renovation projects. At present, the Nebraska Energy Office, using grant funds, is evaluating the feasibility of adopting an advanced commercial building energy code which exceeds by 30% the requirements of the 2006 IECC.
  2. Public Buildings.  Nebraska Department of Administrative Services (DAS) has published a detailed compendium of energy efficiency measures to be undertaken by all state agencies, for state government offices and facilities, titled “Governing for Energy and Environmental Efficiency.”
  3. Residential, Commercial and Industrial Buildings. The Plan encourages the public to take advantage of the Nebraska Energy Office’s Dollar and Energy Saving Loan Program as a source of financing for energy efficiency improvements to all types of buildings, privately owned homes, office buildings, factories, and other commercial structures. It supports state and federal tax credits to offset the cost of home energy audits, and encourages the use of thermal solar units for residential heating needs.
  4. Energy Rating Systems.  It promotes the use of the national Home Energy Rating System (HERS), a uniform rating system, to document the efficiency of homes including heating, air conditioning, lighting and appliances.  Promote the use of EnergyStar® rated equipment including heating and cooling systems, appliances, lighting and electronics.
  5. Considerations in Lending. Educates and encourages lenders, realtors and appraisers to recognize the value of lower energy operating costs and to incorporate the value of these lower costs into energy efficient financing formulas.
  6. Incentives. Supports a one-time state tax credit for building owners who invest in energy efficiency improvements and highly energy efficient new construction. Encourages the exemption of energy improvements from real estate valuation increases for a specified period of time. Encourage local utilities to participate in programs that support the financing and implementation of energy efficiency projects for their customers.
  7. Recycling and Recyclable Construction Waste. Encourage segregation of construction waste at the construction site to facilitate recycling or reuse of appropriate materials. Encourage the use of recycled materials in construction.

Economic Development

Nebraska is the nation’s second leading producer of biofuels, and yet there remains a potential for tremendous growth in so-called “next generation” cellulosic ethanol production. Nebraska also has tremendous wind and solar resources. Combining a robust federal investment in alternative energy growth, with an aggressive state policy of supporting innovative energy-related businesses, should help Nebraska’s new energy economy create jobs, revitalize rural areas, and meet important environmental goals.  The Plan will:

  1. Explore possible state tax incentives for research and development of renewable energy technologies.
  2. Consider amending the Nebraska Advantage Act to offer specific incentives to renewable energy companies that locate in Nebraska or otherwise invest in the state.
  3. Encourage use of Community Development Block Grant funds to be used  in support of job retention programs, and job training for workers, in the renewable energy sector, and modernization of manufacturing equipment.

Education

Energy education is a key component, and efforts will include:  basic energy efficiency and conservation curricula in K-12 schools; advanced renewable energy research at Nebraska’s colleges and universities, and; technical instruction in renewable energy systems construction and maintenance at state community and technical colleges. The Nebraska Energy Office can play an important role as well, both by providing access to energy efficiency materials through its website and publications, and by providing Energy Code training for specific groups such as builders, code officials, and others in the construction industry.

Electricity

Nebraska is the only state in the nation in which 100% of its electric power is provided at the retail level by public utilities. Constitutional and statutory requirements stipulating that Nebraska’s public utilities provide power to consumers at the lowest possible cost have helped to keep electric rates in the state very low when compared to other states. However, certain features of the public power structure in Nebraska have acted as barriers to a rapid increase in the amount of electricity generated by renewable resources in the state. Nebraska will need to overcome these barriers if carbon emissions from traditional coal-fired power plants come under greater scrutiny and/or strict regulation. If so, Nebraska may need to increase the percentage of its electricity generated from renewable and emission-free sources such as wind, methane, solar and nuclear, at an accelerated rate.   To that end, the Plan includes the following:

  1. Supports the enactment of a Renewable Portfolio Standard (RPS).  An RPS is a statutory requirements that all utilities operating within the state generate a certain percentage of the electricity they distribute from renewable sources.
  2. Partners with the Nebraska legislature and with Nebraska’s congressional delegation to secure the resources necessary to enact a Renewable Energy Tax Credit.
  3. Works with Nebraska’s Congressional delegation, and other federal officials, to:
    • Extend the federal production tax credits for renewable energy.
    • Eliminate the legal, financial and technological barriers to the construction of a new interstate electric transmission system that would allow Nebraska and other Midwestern states to export wind-generated electricity.
    • Make federal tax credits for wind energy production tradable. This would allow  public utilities to capture the tax credits that are otherwise only available to privately owned utilities.
    • Increase annual appropriations for the Renewable Energy Production Incentives (REPI). REPI is designed to offer public utilities incentives for the development of renewable generating capacity in place of the production tax credits, for which they do not qualify.
    • Expand the use of Clean Renewable Energy Bonds (CREBS).
    • Support the continuation of federal tax credits for small-scale wind  production.
    • Support the continuation of federal tax credits for residential photovoltaic electricity generating systems.
  4. Will investigate the possibility of creating an exemption, for renewable generating sources, to Nebraska’s statutory requirement that all new generating facilities be approved on a least-cost basis by the Nebraska Power Review Board.
  5. Encourages the Nebraska legislature to consider changes to Nebraska’s Community Based Economic Development statute in order to facilitate increased renewable electric generating capacity in the state.
  6. Works with federal regulators, utilities and other stakeholders to renew and expand the viability of increased nuclear generating capacity in Nebraska and in the U.S. generally.
  7. Supports the development and implementation of carbon capture and sequestration technologies at coal-fired generating plants.
  8. Explores the technological and financial viability of constructing algae bioreactors to recycle carbon-dioxide emitted by coal-fired power plants.
  9. Supports the creation of a standardized, statewide net-metering law.

Alternate Transportation Fuels

Alternate transportation fuels including ethanol, liquefied and compressed natural gas, propane and electricity are currently available and economically viable for use in Nebraska. Policies for alternate fuels in the Plan include:

  1. Increase the use of alternate fuels such as ethanol, natural gas, propane, electricity and hydrogen fuel cells in the public and private transportation sectors to lessen the use of petroleum and improve air quality.
  2. Continue the state policy of increasing production of and demand for ethanol to lessen our dependence on foreign oil, provide local economic development, enhance the price of local grain products and provide for improved air quality.
  3. Encourage research in the ethanol area to reduce the amount of energy used to produce ethanol, including the energy required in the production of corn or other source material.
  4. Continue to encourage the production of biodiesel from conventional sources such as soybeans, and support research into the development of biodiesel from novel sources such as algae. Review the feasibility, efficacy and impacts of making diesel fuel blends with a biodiesel content higher than 10% widely available for use in conventional vehicles.
  5. Encourage the use of compressed and liquefied natural gas as a motor vehicle fuel for private and government fleets and develop the fueling infrastructure necessary to support these fleets.

Conclusion

The 2009 Nebraska Energy Plan will provide a roadmap for how government, businesses and other stakeholders work to assure that Nebraskans have reliable and affordable sources of energy, while also supporting a cleaner environment and a more secure energy future.  The Plan is scheduled for completion in February 2009.

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