Renewable energy tier for Nebraska Advantage Act proposed

Renewable energy companies could receive refunds of sales taxes paid for qualified projects under a bill heard by the Revenue Committee Feb. 23.

LB362, introduced by Bellevue Sen. Abbie Cornett, would add a renewable energy tier to the Nebraska Advantage Act. Companies eligible for the proposed seventh tier would include those generating wind, solar, geothermal, hydroelectric and biomass energy.

The bill as introduced contains placeholders for required investment and employment levels.

David Levy, representing Midwest Wind Energy and Edison Mission Wind Energy, testified in support of LB362. Wind energy investment has totaled $500 million since 2007, he said. States such as Iowa, which has 10 times more wind production than Nebraska despite having lower wind resources, are out-competing Nebraska due to the state’s tax climate, he said.

Iowa, Illinois, Kansas and Minnesota charge no sales tax on equipment used for wind projects, Levy said, and Nebraska’s sales tax puts domestic companies at a $3 per megawatt/hour disadvantage. This constitutes three-fourths of the upfront tax burden for a wind project, he said.

Levy recommended that the tier’s eligibility levels be $75 million for investment and five permanent jobs.

James Williams, representing Invenergy Wind Development, spoke in support of the bill. Many power contracts are decided by very slim margins, he said, and offering sales tax refunds would eliminate a competitive advantage that many out-of-state wind facilities have over their Nebraska counterparts.

Steve Boyer of Third Planet Windpower also testified in favor of LB362. While Nebraska has a community-based energy development program to help smaller energy facilities, he said, adding a new tier to the Nebraska Advantage Act could facilitate large projects.

No one testified in opposition to the bill and the committee took no immediate action on LB362.