Eminent domain carve-out created for private power plants

Lawmakers passed a bill April 10 intended to encourage private developers to build dedicated power plants for large-scale electricity users.

LB1261, sponsored by Niobrara Sen. Barry DeKay at the request of Gov. Jim Pillen, prohibits a consumer-owned utility from using eminent domain to acquire a privately owned electric generation facility under certain conditions.

The exception applies only to a facility that is built to provide electric service to an industrial customer at a single site with a new electric load greater than 1,000 megawatts. The facility must be co-located with the industrial customer, have an electrically equivalent point of grid interconnection to the customer and be approved by the Nebraska Power Review Board.

Under the bill, the privately owned electric supplier must have executed a long-term power purchase agreement or other contract with a consumer-owned utility. Any contract must be approved by a utility’s governing body.

LB1261 also requires the industrial customer to pay a utility for any electric system upgrades or other costs needed to provide its service.

The bill’s requirements apply to contracts entered into on or before Dec. 31, 2031.

Senators voted 33-16 to pass LB1261.