Hedging transaction authority for power agencies advances

Certain public power districts could engage in hedging transactions on commodity futures under a bill advanced by lawmakers Feb. 25.

LB897, introduced by Omaha Sen. Brett Lindstrom, would authorize any power-generating agency that operates in a regional transmission organization to participate in hedging transactions for fuel, power or energy.

The agency could use no more than 5 percent of its annual gross revenue averaged over the previous three years for the transactions. It could use only funds designated for the investments—not facilities or other assets—and the agency’s governing body would have to authorize any hedging agreement.

Lindstrom said certain public power districts should have the authority to use hedging transactions as a financial tool to mitigate risk by locking in the prices of fuel, power and energy futures. This would allow agencies to keep electricity prices low, he said.

After adopting a technical amendment, senators voted 34-0 to advance the bill to select file.