What if the Husker football team lost to Iowa by a score of 51-6? What if Iowa beat us every year? What if the Huskers lost to Wyoming and South Dakota State, too? What if we also lost out on three major recruiting battles to Iowa, for a five-star quarterback, running back and defensive lineman? Nebraskans would be outraged; they would be calling for a new football coach, a new system, a totally new way of doing things.
In fact, Nebraska’s public utilities are getting beaten in the clean energy effort, and it has a much more serious impact on our citizens and our economy. Iowa has developed more than 5,100 megawatts (MW) of wind gener- ation capacity to Nebraska’s 450 MW. In fact, by the end of last year almost all of our neighboring states had developed far more wind-generation capacity than Nebraska, including Kansas at 2,700 MW, Colorado at 2,300 MW, Wyoming at 1,400 and South Dakota at 780. Why is that important? Because it has a direct impact on electric rates and jobs, both of which are very important to all of us.
Let’s examine the economic benefits of wind development. A 200 MW wind farm represents a $300 million dollar investment and creates approximately 160 construction jobs and 15 permanent jobs. A wind farm of this size is likely to provide approximately $800,000 in annual lease payments to farmers and another $800,000 in annual tax revenues for local schools, counties, cities and NRDs. Over the 20-year operations period of this wind farm, it will generate millions of dollars in economic benefits. When multiplied by the amount of wind generation that Iowa has developed in comparison to Nebraska, it means that we are losing billions of dollars in economic development opportunities.
But the direct benefits aren’t the only economic development opportunities we are losing. Remember the recruiting analogy that I used earlier? Just this spring Iowa won three major recruiting battles for data centers. The first was for a Facebook data center, an investment of $1.5 billion. This was a recruiting battle that Nebraska wanted to win but lost. The next was an expansion of Google’s data center in Council Bluffs. The third was a $700 million investment by Microsoft. In all three cases, Iowa’s investment in wind energy was cited as a major factor for their location decision. In all three cases, it represents jobs and investments that Nebraska would like to have but failed to get.
What about electric rates? We’ve been told for years that our public utilities are focused on keeping our rates low. Here again it is worth comparing Nebraska’s electric rates with Iowa’s. Historically, Nebraska’s rates have been lower than Iowa’s. However, at the same time Iowa has invested heavily in wind generation, their rates have remained relatively flat while Nebraska’s have soared, with rate increases every year over the past 10 years. Much of Nebraska’s electric rate increases are due to our reliance on coal and increases in the cost of obtaining and transporting coal. As a result Iowa’s average electric rates are now lower than Nebraska’s.
Even more significant, utilities in neighboring states have announced major new investments in wind development as a means of protecting their ratepayers. MidAmerican Energy in Iowa recently announced plans for a 1,050 MW wind expansion. They are touting it as a means of lowering rates by $10 million a year by 2017. Similarly, Excel Energy just announced plans for 600 MW expansion of wind development in Minnesota and North Dakota, which it estimates will save ratepayers $180 million over the life of the contracts.
MidAmerican and Excel are just two examples of utilities that are seizing the opportunity to invest in clean, renewable wind energy, a winning strategy that reduces electric rates and boosts economic development. With wind energy prices at record lows and the cost of operating aging coal plants rapidly increasing, now is the time for Nebraska’s utilities to invest in wind generation.
Nebraska is now positioned better than ever to take advantage of the opportunities created by wind development. This spring the Nebraska Legislature enacted LB 104, which provides incentives that reduce the cost of developing renewable energy projects. Our public power districts should take advantage of these incentives.
As we settle into the summer months, issues like the availability of water for irrigation and the impact of the drought on our agricultural economy and our way of life is at the forefront of the minds of many Nebraskans. Investing in wind energy can provide another benefit to Nebraska’s farmers and ranchers because wind turbines do not require water to operate, unlike the coal and nuclear plants operated by Nebraska’s utilities, which require millions of gallons of water every day. A new report by the Union of Concerned Scientists entitled “Water Smart Power” details the need to reduce water usage in power generation.
Nebraska’s over-reliance on coal has other costs as well. Burning coal sends pollutants into the environment, including mercury, a dangerous neurotoxin, and particulate emis- sions that can trigger asthma attacks and other health impacts. Peer-reviewed studies by physicians and other scientists have made a direct link to billions of dollars in health care costs in the U.S. from burning coal.
In addition, burning coal to produce electricity is the leading contributor of greenhouse gas emissions in the U.S. It is vital that we begin reducing our greenhouse gas emissions as soon as possible if our children are going inherit a planet Earth that will sustain life as we know it.
Because coal is a dirty fuel that generates pollutants, there will be increasing costs of adding controls in an attempt reduce the impact of these pollutants. Controls to reduce the impacts of haze from power plants on national parks are expected to cost Nebraska utilities hundreds of millions of dollars. Other controls are estimated to cost billions more. All of these costs will be borne by Nebraska ratepayers, by you and me and by generations of future ratepayers. It makes no sense to pour this kind of money into outmoded generation methods like coal, when there are better, cleaner options available.
Nebraska has world-class wind resources, ranked third in the U.S. in potential for wind energy generation by the National Renewable Energy Laboratory. A large majority of Nebraskans support wind development; there are numerous polls that show public support for wind development in Nebraska at greater than 70 percent.
Nebraska is an all public power state. That means that we the people who pay the rates are the owners of our public power utilities. It should also mean that our public utilities are responsive to the public. There is growing support for more clean energy development, including wind, solar and expanding our efforts to help us become more efficient with the energy we use.
The Sierra Club has led the applause when our public power districts have invested in renewable energy, such as OPPD’s announcement of an intent to purchase 200 MW of wind and LES’s recent announcement of plans to purchase 100 MW of wind. However, much more must be done if Nebraska is to change its energy mix to the extent needed to really benefit our economy and environment. Continuing down the present road will lead to even higher rates, more pollutants in the environment and lost economic development opportunities.
Now is the time for Nebraska’s public power districts to get serious about getting in the clean energy game. Our public power system has worked well for us for many years. However, our public power districts need to respond to changing times and invest in clean energy in order to best represent the interests of all of us, their customer owners. These investments will create jobs, generate economic benefits, protect our air and water, protect the interests of ratepayers and protect our future.