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In re Application of City of Neligh

Supreme Court of Nebraska

March 30, 2018

In re Application of City of Neligh, Nebraska. City of Neligh, Nebraska, appellee,
Elkhorn Rural Public Power District, appellant.

         1. Nebraska Power Review Board: Appeal and Error. A decision of the Nebraska Power Review Board will be affirmed if it is supported by the evidence and is not arbitrary, capricious, unreasonable, or otherwise illegal.

         2. Statutes: Appeal and Error. The meaning of a statute is a question of law, and a reviewing court is obligated to reach conclusions independent of the determination made below.

          Appeal from the Power Review Board. Reversed and remanded for further proceedings.

          David A. Jarecke and Ellen C. Kreifels, of Blankenau, Wilmoth & Jarecke, L.L.R, for appellant.

          David C. Levy and Krista M. Eckhoff, of Baird Holm. L.L.R, and Joseph McNally, of McNally Law Office, for appellee.

          Heavican, C.J., Cassel, Stacy, and Funke, JJ., and Riedmann and Arterburn, Judges.

          Heavican, C.J.


         The City of Neligh, Nebraska (Neligh), filed an application with the Nebraska Power Review Board (Board) seeking to [299 Neb. 518] transfer two newly annexed territories from the Elkhorn Rural Public Power District (ERPPD) to Neligh's electrical service area and to have the Board determine the total economic impact of the transfer to the ERPPD. The Board transferred the service and assessed the economic impact at $490, 445.90. ERPPD appeals. We reverse the decision and remand the cause for further proceedings.


         Relevant Statutes.

         Neb. Rev. Stat. § 70-1008(2) (Reissue 2009) provides:

A municipally owned electric system, serving such municipality at retail, shall have the right, upon application to and approval by the board, to serve newly annexed areas of such municipality. Electric distribution facilities and customers of another supplier in such newly acquired certified service area may be acquired, in accordance with the procedure and criteria set forth in section 70-1010, within a period of one year and payment shall be made in respect to the value of any such facilities' customers or certified service area being transferred. The rights of a municipality to acquire such distribution facilities and customers within such newly annexed area shall be waived unless such acquisition and payment are made within one year of the date of annexation. If an application is made to the board within one year of the date of annexation for a determination of total economic impact as provided in section 70-1010, such right shall not be waived unless the municipality fails to make payment of the price determined by the board within one year of a final decision establishing such price. Notwithstanding other provisions of this section, the parties may extend the time for acquisition and payment by mutual written agreement.

         Neb. Rev. Stat. § 70-1010 (Reissue 2009) further provides:

(1) The board shall have authority upon application by a supplier at any time to modify service areas or [299 Neb. 519] customers to be served as previously established. The same procedures as to notice, hearing, and decision shall be followed as in the case of an original application. Suppliers shall have authority by agreement to change service areas or customers to be served with the approval of the board. This section shall not apply to agreements referred to in subsection (2) of section 70-1002.
(2) In the event of a proposed transfer of customers and facilities from one supplier to another in accordance with this section or section 70-1008 or 70-1009, the parties shall attempt to agree upon the value of the certified service area and distribution facilities and customers being transferred. If the parties cannot agree upon the value, then the board shall determine the total economic impact on the selling supplier and establish the price accordingly based on, but not limited to, the following guidelines: The supplier acquiring the certified service area, distribution facilities, and customers shall purchase the electric distribution facilities of the supplier located within the affected area, together with the supplier's rights to serve within such area, for cash consideration which shall consist of (a) the current reproduction cost if the facilities being acquired were new, less depreciation computed on a straight-line basis at three percent per year not to exceed seventy percent, plus (b) an amount equal to the nonbetterment cost of constructing any facilities necessary to reintegrate the system of the supplier outside the area being transferred after detaching the portion to be sold, plus (c) an amount equal to two and one-half times the annual revenue received from power sales to existing customers of electric power within the area being transferred, except that for large commercial or industrial customers with peak demands of three hundred kilowatts or greater during the twelve months immediately preceding the date of filing with the board, the multiple shall be five times the net revenue, defined as gross power sales, [299 Neb. 520] less costs of wholesale power including facilities rental charges, received from ...

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