Cheaper electricity for economic development projects advancing

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February 14, 2012 - 6:00pm

A proposal for discounted electricity rates to attract economic development projects is advancing in the Legislature, while senators consider tighter restrictions on settlement money received by the Attorney General's office.

Nebraska's public power districts can already negotiate discounted rates for up to five years for companies that qualify for economic development incentives. But if the districts raise general retail rates, those discounted rates have to go up, too.

A proposal by Sen. Chris Langemeier of Schuyler would end that requirement. Langemeier said it would help the state use surplus power capacity to attract businesses. "If Nebraska wants to sell some surplus power now, we sell it out onto the grid, we sell to Kansas City Power and Light, we sell it all the way down to Florida as we put it on the grid, sell it all over the eastern nation. But at the end of that sale, we have

Sen. Chris Langemeier

nothing," Langemeier said. By contrast, he said his proposal "allows us to use that same sale in the state of Nebraska, to have a business develop in Nebraska, that after five years we can add them to our base load, and then that helps all of our customers at the end of five years."

Langemeier said later that the proposal is part of an effort to attract a billion-dollar data center project that Nebraska is in the running for.

An amendment to the bill specifies that power can't be sold for below what it costs to produce. Mark Vasina of Nebraskans for Peace, who opposed the bill at a public hearing, said that could still leave other customers responsible for costs like retrofitting power plants to meet new anti-pollution requirements. John McClure of the Nebraska Public Power District, which supports the proposal, acknowledged that's true. But McClure said that five years of special rates could be close to expiring before such capital construction projects were approved and started, and after that, everyone would be contributing. The bill got first-round approval on a vote of 33-0.

In a hearing Wednesday afternoon, the Judiciary Committee heard two proposals to change the way money from the settlement of environmental lawsuits is handled by the state.

Currently, the attorney general makes grants to various organizations. That practice came under scrutiny last year when Attorney General Jon Bruning, who is running for the U.S. Senate, gave $100,000 to an organization called We Support Agriculture, an offshoot of several powerful agricultural groups. Omaha Sen. Heath Mello has proposed that the money should instead go to schools, and Sen. Ken Haar of Malcolm wants it to go to the Environmental Trust.

Chief Deputy Attorney General David Cookson opposed both proposals. He said other states handle money the same way as Nebraska. And Cookson suggested the bills would violate the separation of powers by infringing on the attorney general's ability to reach legal settlements. "We have followed the law, to the letter of the law and the spirit of the law, throughout this Process," Cookson said.

Sen. Steve Lathrop

Bruning did not testify, but has previously said Mello and Haar, both registered Democrats, were introducing their legislation because he's a Republican running for Senate. But state Sen. Steve Lathrop, also a registered Democrat, said the real question is what's the best policy. "We shouldn't leave here today and say, The Judiciary Committee's just figured out that Jon Bruning is a crook.' That isn't it. What we're doing is asking the question Is this good policy? And should the attorney general be in charge of money that he's putting together in a stipulated order that gives him discretion to spend it any way he wants?' Legal, but maybe not the best policy," said Lathrop.




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