Nebraska Legislature Amends Wind Energy Tax And Property Rules


by Matt Ottemann

Ottemann, Matthew
mottemann@mcgrathnorth.com
(402) 341-3070

Nebraska’s Rural Community-Based Energy Development Act provides incentives for owners of qualified wind energy generation projects within Nebraska.  The Act is intended to encourage and incent the development of wind energy within Nebraska.  Under the Act, the purchase of personal property for use in a community-based energy development (C-BED) project is exempt from sales and use tax if 33% of the gross power purchase agreements payments are made to qualified owners (generally Nebraska residents and companies).

In the 2009 legislative session, the Legislature made two key changes  to incent additional wind energy projects.  First, the Legislature specified that gross power purchase agreement payments do not include debt financing if the agreement is entered into on or before December 31, 2011, and the qualified owners have a combined total of at least 33% of the equity ownership in the C-BED project.  This change increases the ability of interested groups to finance and attract investors for a wind energy project.

Second, the Legislature specified that a public power district may agree to limit its exercise of its eminent domain power to acquire a renewable energy generation facility (and any related facilities), producing electricity with wind, even if the facility is not a C-BED project. Prior to this change, some investors were reluctant to invest in Nebraska wind energy projects where those investments would potentially be subject to eminent domain and the resulting loss of profits.  This change allows a public power district to waive its eminent domain power, which would give investors certainty that their project would not be seized by a government agency once it was operating efficiently.

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