CHAPTER NOTES

CHAPTER ONE

1. Laws, Joint Resolutions, and Memorials, Legislative Assembly of the State of Nebraska, Nineteenth Session, January 6, 1885; pp. 114-117. For additional early statutes also see: Laws, Joint Resolutions, and Memorials, General Laws, Chapter 13, section XIII, p. 195, January 1, 1889; Laws, Joint Resolutions, and Memorials, General Laws, Chapter 19, p. 350, March 30, 1889.

2. For a listing of municipal electric systems in all states and their dates of each system’s formation, see Public Power, "Annual Statistical Issue", American Public Power Association, Washington, DC, January-February 1997.

3. Harry M. Trebing, "Nebraska’s Continuing Power Problems: Part 1," Public Utilities Fortnightly, Volume 69, Number 7, March 29, 1962; p. 434.

4. See Public Power, Annual Statistical Issue, 1997.

5. Roberta K. Barndt, "Nebraska and Rural Electrification Through 1940," unpublished thesis, University of Nebraska, December 1976, p. 4, figure 1 and figure 2.

6. Richard A. Peace, The Next Greatest Thing, (The National Rural Electric Cooperative Ass’n.; Washington, D.C. 1984), pp. 40-41.

7. Judson King, "Nebraska, the Public Power State: Part III," Public Utilities Fortnightly, April 10, 1947, p. 483.

8. Harry M. Trebing, "Nebraska’s Continuing Power Problems: Part I," Public Utilities Fortnightly, March 29, 1962, p. 435.

9. Robert Firth, Public Power in Nebraska, (Lincoln: University of Nebraska Press, 1962), pp. 38-39; pp. 162-163.

10. See: William Mosher, Electrical Utilities: The Crisis In Public Control, (New York: Harper & Brothers, 1929), pp. 110-111. Also: Clarence E. McNeil and Herschel Jones, "Nebraska’s Electric Power Development in Relation to Municipal Service," Nebraska Studies in Business, No. 44, April 1939, p. 20.

11. Correspondence of Sorensen to King, July 26, 1939, cited by Barndt, p. 41.

12. See Trebing, p. 439.

13. See Trebing, p. 441.

14. "Final Report of the Nebraska Legislative Council Subcommittee on Public Power," Nebraska Legislature, September 27, 1944, p. 15.

15. See "Final Report".

16. See "Final Report".

17. See "Final Report".

18. Trebing, "Part II," Public Utilities Fortnightly, April 12, 1962, pp. 511-512.

19. "Final Report", p. 40.

20. "Final Report", pp. 22-23.

21. "Final Report, pp. 40.

22. "Final Report", pp. 36-38.

23. "Final Report", p. 57.

24. Bill Beck, Light Across the Prairies: An Illustrated History of the Northwestern Public Service (Northwestern Public Service Company), p. 93.

25. Beck, p. 144-150.

26. "Final Report", p. 20.

27. For listing of systems, see Firth, p. 179.

28. Firth, p. 278.

29. Michael O’Hara, "Nebraska Power Review Board: Regulating A Publicly-Owned Electric Utility Industry," (unpublished dissertation, University of Nebraska, 1983), p. 85.

30. Nebraska Revised Statutes, Chapter 70, Article 10, Section 1.

31. The provision of the decision that overturned LB 764 that determined it was "special legislation" [Wittler v. Baungartner et al., 180 Neb. 446, 144 N.W. 2nd] was later reversed by the Nebraska Supreme Court in 1979 in a case concerning the legislature’s creation of the Nebraska Mortgage Finance Fund Act. [State ex rel. Douglas v. Nebraska Mortgage Finance Fund, 204 Neb. 445, 283 N.W. 2nd 12 (1979)]

32. L.B. 297 was passed in 1967 to allow use of transmission lines for wheeling wholesale power supplies. This use was refined with passage of L.B. 441 in 1969.

33. Energy Supply and Environmental Coordination Act, (Public Law 93-319); this restriction was extended in 1978 by the Powerplant and Industrial Fuel Use Act, (Public Law 95-620), and ultimately repealed in 1987.

34. Nebraska Legislature, "Review of Rates and Operations of Nebraska Power Industry," Phase I, February 11, 1976, see cover letter.

35. The L.R. 161 bills were: L.B. 454, L.B. 460, L.B. 461, L.B. 462.

36. L.B. 119.

37. L.B. 302.

38. The National Energy Act of 1978 contained the Public Utility Regulatory Policies Act (PURPA) (Public Law 95-617).

39. For example, OPPD witnessed its previous annual growth rate in peak demand of 8 percent drop to 6 percent by 1976. By 1996, Nebraska’s projected statewide annual growth in peak demand had dropped to 1.5 percent.

40. L.B. 705, 1987.

41. "Nebraska Power Association: Review of Public Power Industry Structure," Nebraska Power Association, 1988, pp. 35-36.

CHAPTER TWO

1. Much of the data in the Phase I Study regarding Nebraska’s electric systems (Public Power Districts, Rural Cooperatives and Municipal Systems) was gathered as part of the L.R. 455 Survey undertaken with the cooperation of the Nebraska Power Association in December 1996. Other pertinent financial or operational information on Nebraska systems was gathered on an individual system basis, or through industry associations and sources.

2. Nebraska Power Review Board data and information.

3. For additional information on governance of Nebraska’s electric system see: Nebraska Blue Book 1994-1995 (Lincoln, Nebraska: Clerk of the Legislature, published biennially), pp. 910-915.

4. General information on state regulatory commissions may be found in: Utility Regulatory Policy In The United States and Canada (Washington, D.C.: National Association of Regulatory Utility Commissioners, 1995).

CHAPTER THREE

1. In 1979 the legislature declared it was the policy of the state to provide adequate electrical service at as low an overall cost as possible, consistent with sound business practices and, in furtherance of such policy, electric service should be provided by non-profit entities, including public power districts, public power and irrigation districts, non-profit cooperatives and municipalities. (See Nebraska Statute 70-1301.) This followed a 1963 policy issued by the legislature that duplication of facilities was not in accord with sound business public policy and that dependable electric service at the lowest cost should be provided to all the residents of the state, including the residents of cities and villages. (See Nebraska Statute 70-1101.)

2. See Nebraska Statute 70-1101.

3. The Power Review Board was established by L.B. 220 (1963).

4. Note to Table 3-1. The distinctions indicated in this matrix are intended to show the general differences in the kinds of services public power districts, rural cooperatives, municipal system and a joint action agency may currently provide under law. Valid arguments maybe raised regarding specific conditions or situations in which the range of difference can be altered. Final distinctions in these cases may result only from litigation or legislation.

5. The law established the public power districts is now codified generally as Nebraska Statute, Chapter 70, Article 6.

6. L.B. 658 (1997) authorizes power districts to own and operate, contract to operate, or lease energy equipment. It also authorizes the power districts to provide billing, meter reading, surveys, evaluations or other administrative services (but not to include natural gas services) of public utility system within the district’s service territory. In addition, it makes clear that the power districts can obtain grant and loan funds from the U.S. Department of Agriculture and other federal agencies to promote economic development and job creation projects in rural areas of the state.

7. Interlocal Cooperation Act (ICA), Nebraska Revised Statutes, Chapter 13. The ICA was revised in 1997 by L.B. 269 which allows political subdivisions with dissimilar powers to enter into contracts to have one of the entities exercise some or all of the powers of the other. Prior to this change, the ICA only allowed political subdivisions with common power to enter into such agreements.

8. PPD property can be mortgaged to secure repayment of debt. All liability of the PPD is to be payable solely from revenue derived from the sale of electricity, water for irrigation, ethanol, use of radioactive materials or issues of indebtedness.

9. Note to Table 3-2. The distinctions indicated in this matrix are intended to show the general differences in authority between the types of electric systems in the ability or authority to conduct business. Valid arguments may be raised regarding specific conditions or situations in which the range of difference can be altered. Final distinctions in these cases may result only from litigation or legislation.

10. Wholesale agreements are established under Nebraska Statute 70-1002.01 and are voluntary agreements. Wholesale agreements do not establish service areas within the meaning of Chapter 70, Article 10. Retail service agreements are binding on the parties to the agreement as well as binding on other electrical suppliers in Nebraska. The provision establishing retail service areas is defined in Chapter 70, Article 10. Particular criteria set forth in the statutes on any modification to be made to a service area is contained in Nebraska Statutes 70-1008, 70-1009, 70-1010 and 70-1011.

11. For additional information on the Power Review Board, see Nebraska Blue Book 1994-95, Clerk of the Legislature, (Lincoln Nebraska State Legislature, published biennially), p. 696.

12. For additional information on the Public Service Commission see: Nebraska Blue Book, 1994-95, p. 410.

13. The Lincoln-Lancaster County Health Department and the City of Omaha are authorized to administer the air and water programs for their jurisdictions, which include the metropolitan areas of Lincoln and Omaha.

14. For additional information on the Department of Environmental Quality see: Nebraska Blue Book. 1994-95, p. 479.

15. For additional information on the Nebraska Energy Office see: Nebraska Blue Book, 1994-95, pp. 562-563.

16. For additional information on the State Judicial Branch see: Nebraska Blue Book, 1994-95, p. 759.

17. For background on MAPP see: Bill Beck, Interconnections: The History of the Mid-Continent Area Power Pool, (Minneapolis, Minn.: Mid-Continent Area Power Pool, 1988).

18. The duty of a utility to provide universal service is widely recognized as on implied at common law and need not be expressed by statute or contract, or in the charter of the public utility. See 64 Am Jur 2nd 562, Public Utilities, section 16.

19. Nebraska Statute 70-1017 requires: "Any supplier of electricity at retail shall furnish service, upon application, to any applicant within the service area of such supplier if it is economically feasible to service and supply the applicant. The electric service shall be furnished by the supplier within a reasonable time after the application is made. If the supplier and the applicant cannot agree upon any of the terms under which service a to be furnished, or if the applicant alleges that the supplier is not treating all customers and applicants fairly and without discrimination within the same rate class, the matter shall be submitted to the board for hearing and determination." Also see: Neb. Rev. Stat. 16-679 and Neb. Rev. Stat. 16-681.

20. See Neb. Rev. Stat. 16-679.

21. See Neb. Rev. Stan. 70-1001 and Neb. Rev. Stat. 70-1101.

22. In the event of a disagreement between a generating agency and a distribution system over the terms and conditions of any agreement, the Power Review Board may be requested to hold a hearing on the issues involved. However, any ruling by the Power Review Board regarding rates to be charged are advisory only.

23. In restructuring legislation passed by other states, the "default" provider is commonly the existing utility provider for a transition period of 5-7 years. Rates for "default" service from the utility are set by state regulators. At the end of the transition period, "default" service is envisioned to be provided at spot market prices.

24. See Neb. Rev. Stat. 18-418.

25. Note to Table 3-3. The distinctions indicated in this matrix are intended to show the general differences in service and rate requirements between the types of electric systems. While it is generally accepted that public power districts operate under state requirements not applied to municipal or cooperative system, valid arguments may be raised regarding specific conditions or situations in which the range of difference can be altered. Final distinctions in these cases may result only from litigation or legislation.

CHAPTER FOUR

1. L.R. 455 Survey.

2. Nebraska Power Association, Statewide Integrated Resource Planning Coordination Report: 1997-20016, October 1996, pp. 53-55.

3. See 1996 IRP Report, p. 55, and "Pauline-Moore Line Addition and GGS Full Capacity Utilization DRC/Operating Study," NPPD.

4. L.B. 297 (1967); LB. 441 (1969).

5. L.R. 455 Survey.

6. IRP Report, p. 12 and Appendix E.

7. The North American Electric Reliability Council (NERC) is a not-for-profit company formed by the electric industry in 1968 to promote reliability of electric supply in North America. NERC consists of nine Regional Reliability Councils and one Affiliate whose members account for virtually all the electricity supplied in the United States, Canada and a portion of Baja California Norte, Mexico. The Mid-Continent Area Power Pool, which includes Nebraska, is one of the nine regional councils.

8. For background on MAPP see: Bill Beck, Interconnections: The History of the Mid-Continent Area Power Pool, Minneapolis, Minn.: Mid-Continent Area Power Pool, 1988).

9. Resource Management International, "The Relative System Reliability of Public-Owned and Privately-Owned Electric Systems," prepared for American Public Power Association, December 1996.

10. RMI, 1996.

11. National Rural Utility Cooperative Finance Corporation, "Data for National Outage Statistics: Special Report Request,’’ January 1997.

12. L.R. 455 Survey.

13. The planning process was established in 1981 by L.B. 302 and amended in 1986 by L.B. 948, now encoded in Nebraska Statute 70-1026. Integrated Resource Planning was encoded in Nebraska Statute 66-1060, Article 10 (f).

14. For detailed definitions of the process of Integrated Resource Planning, see the Nebraska Power Association’s Statewide Integrated Resource Planning Coordination Report (1997-2016), October 1996.

15. Data from the L.R. 455 Survey, the IRP Report and verification with utility personnel.

16. IRP Report, 1996, p. 12.

17. Clean Air Act Amendments of 1990, Public Law 101-549.

18. EPA Office of Air and Radiation, USA Air Quality Nonattainment Areas. October 11, 1996. (http://www.epa.gov//airs/nonattn.html).

19. IRP Report, 1996, p. 66.

20. EPA Office of Air and Radiation, Acid Rain Program Overview, April 1996 (http://www.epa.gov/docs/acidrain/overview.html)

21. EPA Office of Air and Radiation, 1995 Final Emissions Data Files for Phase I and Phase II.

22. IRP Report, 1996, p. 69

23. "CO2 Emissions and the Missing Carbon Problem," Information Unit on Climate Change, (United Nations), May 1993.

24. Second Assessment Report of the Intergovernmental Panel an Climate Change, L.G. Meiro Filho, B.A. Callander, N. Harris, A. Kattenberg, K. Maskell (Eds.), (Port Chester, NY: Cambridge University Press, 1996).

25. EPA Office of Air and Radiation, 1995 Final Emissions Data Files for Phase I and Phase II.

26. U.S. EPA Office of Air and Radiation, Counties Projected Not To Meet EPA’s Proposed PM-2.5 Standards, December 1996.

27. Data from the L.R. 455 Survey.

28. Data reported in the L.R. 455 Survey.

29. Bills related to renewable energy introduced in the 1997 Unicameral Session included: L.B. 140, L.B. 428, L.B. 501, L.B. 571, L.B. 867.

30. This information was gathered through the L.R. 455 Survey and may not note other unrecorded customer generation.

31. Energy Information Administration, Electric Power Annual 1995 Volume II, DOE/EIA-0384(95)/2.

32. L.R. 455 Survey.

33. L.B. 757 (1993).

34. L.R. 455 Survey.

CHAPTER FIVE

1. L.R. 455 Survey.

2. L.R. 455 Survey.

3. L.R. 455 Survey.

4. L.R. 455 Survey.

5. Tax Reform Act of 1986, Public Law 99-509.

6. Alan Spen et al, Public Power’s New Reality. Fitch Investor Service, June 1995, also see Fitch Competitive Indicator, January 1995.

7. L.R. 455 Survey.

8. L.R. 455 Survey.

9. American Public Power Association, 1994 Payments and Contributions by Public Power Distribution Systems to State and Local Government, March 1996.

10. Financial Statistics of Major U.S. Investor-Owned Electric Utilities 1994, U.S. Department of Energy, Energy Information Administration.

11. It should be noted that there has been a long-running national debate related to tax and subsidy issues for private-investor owned electric companies and public power and rural cooperative systems. Investor-owned utility perspective may be found in: "Subsides and Unfair Competitive Advantages Available to Publicly-Owned and Cooperative Utilities," Putnam, Hayes and Bartlett, September 1994. Public power perspective may be found in: "Major Tax Subsidies to Investor-Owned Electric Utilities and the Cost to the U.S. Treasury: A Report to the American Public Power Association," MSB Energy Associates, May 1995.

CHAPTER SIX

1. Deregulation of the telecommunications, airlines and natural gas industries was accomplished under various Federal Communications Commission decisions and the Telecommunications Act of 1996, Airline Deregulation Art of 1978 and various Federal Energy Regulatory Commission orders and the Natural Gas Policy Act of 1978, respectively.

2. Public Utility Regulatory Policies Act of 1978 (Public Law 95-617).

3. Energy Policy Act of 1992 (Public Law 102-486).

4. Public Utility Holding Company Act of 1935 (Public Law 74-333).

5. 16 U.S.C. Section 824(h)

6. Transmission access for wholesale level competition was initiated in Nebraska by passage of L.B. 297 (1967) and refined by passage of L.B. 441 (1969).

7. Moody’s Investor Services, "Stranded Costs Will Threaten Credit Quality of U.S. Electrics," August 1995.

8. DRI/McGraw Hill World Energy Service, U.S. Outlook: Fall/Winter 1996, (Lexington, Mass., 1996), p. 44.

9. Deliotte Touche, Federal, State and Local Tax Implications of Electric Utility Restructuring. (Washington, D.C.: National Council on Competition and the Electric Industry), October 1996.

Chapter One - HISTORY
Chapter Two - STRUCTURE AND GOVERNANCE
Chapter Three - STATUTORY AND REGULATORY OVERSIGHT
Chapter Four - PLANNING AND OPERATIONS
Chapter Five - FINANCE AND TAX
Chapter Six - DEREGULATION AND RESTRUCTURING
Glossary