Bill to increase natural gas capacity advanced

Lawmakers gave first-round approval March 28 to 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 as introduced, 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 Public Service Commission (PSC) that adjusts the utility’s residential and commercial customer rates to recover costs.

An Urban Affairs Committee amendment, adopted 31-0, would include villages and first and second class cities in the bill’s provisions and grant them authority to utilize funds under what is known as an LB840 plan to facilitate the type of infrastructure outlined in the bill.

The amendment also would require a jurisdictional utility to file proposed rural infrastructure surcharge tariffs with the PSC consistent with the proposed rate increases negotiated in an agreement with a community prior to undertaking rural infrastructure development.

A rural infrastructure surcharge tariff or gas supply adjustment tariff would become effective immediately upon filing of all required items with the PSC, including a copy of the agreement with the community and a map of the underserved area.

Finally, the amendment would:
• ensure that tariffs are consistent with the proposed rate increase negotiated in an agreement;
• limit a jurisdictional utility’s ability to recover costs to only the customers in a city who are benefitting from the development;
• provide for a refund to rate payers determined to have overpaid for an infrastructure development; and
• limits PSC authority to one annual public hearing and determination of whether rural surcharges reflect the annual cost of development.

Flood said finding a means to increase natural gas capacity is essential for economic development in rural areas. He said the amended bill would provide a framework for communities and jurisdictional utilities to work together to achieve industrial expansion.

“The bottom line is that this problem will not solve itself,” Flood said. “Rural Nebraska is worth fighting for.”

Sen. Paul Schumacher of Columbus supported the bill, saying rural areas did not envision the kinds of natural gas capacity that would be required to support ethanol plants and other manufacturing businesses. LB1115 would provide rural communities a mechanism to try to increase capacity, he said.

“You can’t employ people unless you have the ability to invest in the proper infrastructure,” Schumacher said.

Following adoption a technical amendment offered by Flood, senators advanced LB1115 to select file on a 32-0 vote.