Bill seeks to increase natural gas capacity

The Urban Affairs Committee heard testimony Feb. 7 on a bill that would allow jurisdictional utilities to construct and authorize natural gas pipeline facilities.

Norfolk Sen. Mike Flood, sponsor of LB1115, said he introduced the bill because many rural Nebraska communities lack adequate natural gas pipeline capacity to meet the demand of existing or potential end-use business customers. He said the bill would provide a streamlined, less-regulated process for natural gas pipeline construction in the state.

Under the bill, a jurisdictional utility could implement a plan to construct rural natural gas infrastructure. Prior to constructing a natural gas facility, the jurisdictional utility would be required to consider factors such as the environmental impact on the area and the project’s economic feasibility.

Following a determination that an area is unserved or underserved, the bill would require a jurisdictional utility to make a tariff filing with the PSC that adjusts the utility’s residential and commercial customer rates to recover costs.

“The current system has put up a barrier to economic development in rural Nebraska,” Flood said.
“We have existing businesses in Madison County that would like to grow their businesses … but the gas capacity is a barrier for us.”

Norfolk Mayor Sue Fuchtman testified in support of the bill, saying the 2007 loss of a proposed soy processing plant was “devastating” for the community. Norfolk lost the project – and the 200 jobs associate with it – due to a lack of natural gas capacity, she said.

Fuchtman said the state needs to find a way to increase capacity in rural areas.

“Our future economic vitality is at stake,” she said.

Dennis Houston, representing the Norfolk Area Chamber of Commerce, also supported the bill. He said many rural communities have lost economic development opportunities due to lack of natural gas capacity.

“This is not just a Norfolk problem,” he said. “This is a rural Nebraska problem.”

Lynn Rex of the League of Nebraska Municipalities testified in a neutral capacity. She said league members support the idea of increasing natural gas capacity in rural areas of the state but have concerns about the bill.

Among the concerns cited was a provision in LB1115 giving a jurisdictional utility sole discretion to determine whether an area is unserved or underserved. Rex said the PSC should be involved in making such a determination.

“I think this bill needs to pass this year in some form,” she said. “Just not in this form.”

No opposition testimony was given and the committee took no immediate action on the bill.