Tax incentives may jump-start $300 million Siouxland wind farm

Nebraska lawmakers are closing in on passing a measure to pave the way for a $300 million wind farm project in Dixon County.

Lawmakers on Tuesday gave second-round approval to a bill by Omaha Sen. Steve Lathrop that would remove a barrier to the development and export of wind energy in Nebraska. It would offer tax incentives that could lead to Nebraska getting a wind farm project by TradeWind Energy, of Lenexa, Kan.

The project, called Rattlesnake Creek, is proposed on more than 10,000 acres of farmland between Allen, Emerson and Wakefield, southwest of Sioux City. More than 100 local landowners would receive lease payments of $10,000 to $15,000 per turbine.

TradeWind officials have said attracting customers is difficult because the state's lack of tax incentives means it would have to charge more for power than companies based in other states.

Sen. Ken Schilz, of Ogallala, previously proposed replacing Lathrop's measure with another, by Omaha Sen. Heath Mello, that would encourage more local ownership of renewable energy projects. It would allow a sales tax exemption on materials used in the projects, as long as 25 percent of gross revenues went to Nebraska businesses or individuals. Schilz eventually abandoned the effort.

Schilz said that because Nebraska is a public power state, Tradewind would be required to offer 10 percent of the power it generates to Nebraska utilities while shipping 90 percent out of state.

"If we incent all those export projects first … then in 20 years, what's left … for the people of the state of Nebraska?" Schilz asked. "We really do need to think about the future and what goes on. Whose wind is it? Who should get the benefit for it, and how long should that benefit last?"

Sen. Burke Harr, of Omaha, said it was wrong to oppose projects by companies outside of Nebraska.

"We are saying we're not open for business," Harr said. "We're saying, 'Gosh, we want your money, but we don't want you.'"

Nebraska lags in the production of wind energy. Iowa generates more than 13 times as much wind power as Nebraska -- 4,536 megawatts to 337. And Nebraska ranks last among its neighboring states.

MidAmerican Energy, which has nearly 1,300 wind turbines in Iowa, including several farms in western Iowa, recently announced plans to spend $1.9 billion to build another 656 wind turbines across the state. It's the largest economic development project in Iowa history.

Lathrop's bill would fall under the Nebraska Advantage Act, which took effect in 2006 and is meant to encourage companies to expand and create jobs by offering them tax incentives. About 320 companies have applied for Nebraska Advantage credits and created 20,500 new jobs.

"This is an economic development issue," Lathrop said. "The Advantage Act has always been about economic development. We know what the benefits are. It is a great tool for economic development."

The measure would provide a sales tax exemption for the purchase of turbines, towers and other wind-farm components, which Iowa, Kansas and Oklahoma have used to create a wind-energy boom.

TradeWind Energy will decide soon whether it will build in Nebraska or elsewhere.

Gov. Dave Heineman, who has touted developing wind energy, says lawmakers should not pass bills giving new tax breaks until the Legislature does a proposed study to overhaul Nebraska's tax system.