CONTENTS

Executive Summary

Chapter One: Background on Electric Industry Competition and Restructuring
Introduction
Background on Electric Industry Restructuring in the U.S.
Deregulation of Other Infrastructure Industries in the U.S.
Restructuring of the Electric Industry in Other Nations
Proposed Changes to Restructure the U.S. Electric Utility Industry

Chapter Two: Electric Industry Competition and Restructuring in Other States
Introduction
Overview of Activity at the State Level
Market Transformation and Mergers
Pressures on Nebraska from Neighboring States, Regional Agencies, and Federal Agencies
Summary

Chapter Three: Retail Competition, Customer Choice, and Consumer Protection
Introduction
Retail Competition
Consumer Interest in Retail Competition and "Customer Choice" in Nebraska
Combined or Multi-Services
Realities of Retail Competition and Customer Choice for Electricity
Designation and Development of a State Regulatory Body to Augment Local Control
Advisory Group and Task Force Positions on Key Issues
Summary of Key Points and Recommendations

Chapter Four: Three Models to Address Nebraska Key Issues and Potential Impacts
Introduction
Current Structure of Nebraska's Electric Industry
Overview of the Three Models
Current Structure Model
Modified Current Structure
Limited Access Model
Open Access Model
Assessing Key Impacts or Issues under Each Model
Summary

Chapter Five: Changes and Impacts on Nebraska's Electric Industry Structure and Operations
Introduction
Changes in Nebraska's Electric Industry
Key Issues and Criteria for Evaluating Options
Wholesale Power Supply Market
Transmission
Regulatory Changes and New Structure
Distribution
Distribution Options in a Competitive Retail Market
General Structural Issues
Conclusions and Recommendations of Topic Group and Advisory Group
Summary of Key Points and Task Force Recommendations

Chapter Six: Changes and Impacts on the Environment, Energy Efficiency, and Renewable Energy
Introduction
Potential Changes and Impacts on the Environment
Potential Changes and Impacts on Energy Efficiency
Potential Changes and Impacts on Renewable Energy
Advisory Group and Task Force Positions
Summary of Key Points and Recommendations

Chapter Seven: Changes and Impacts on Law, Governance, Regulation and Taxation
Introduction
Electric Industry Ownership and Control in Nebraska
Existing Governance and Potential Changes Under Each of the Three Models
Existing Regulation and Potential Changes
Existing Law and Potential Changes
Tax Law
Advisory Group and Topic Group Summary
Summary of Key Points and Recommendations

Chapter Eight: Cost/Benefit Considerations
Introduction
Baseline Costs and Benefits of Nebraska's Present Electric Industry
Anticipated Wholesale Power Costs in Nebraska and the MAPP Region
Cost/Benefit Illustration
Transition Cost Overview
Stranded Costs
Tax Issues and Methods of Tax Collection
Summary of Key Points and Recommendations

Chapter Nine: Public Process and Timing Considerations
Introduction
Public Policy Issues
Public Process for Addressing Policy Issues
Condition-Certain Policy Framework
Nebraska's Public Process
Timing
Advisory Topic Group Recommendations
Summary

Chapter Ten: Summary of Chapter Key Points and Recommendations
Summary of Key Points and Recommendations

Glossary of Terms

Charts

Chart 1-1 Changes in Enplanements 1998-1996
Chart 1-2 Telephone Complaints in Nebraska 1987-1998
Chart 1-3 Local Telephone Rate Changes 1996-1998
Chart 3-1 Sample Unbundled Electric Bill 47A
Chart 4-1 Nebraska Power Flows 1999
Chart 4-2 Current Structure Model
Chart 4-3 Modified Current Structure Model
Chart 4-4 Limited Access Model
Chart 4-5 Open Access Model
Chart 5-1 Wholesale Power Price Projections
Chart 6-1 Sample Consumer Disclosure Label
Chart 8-1 Comparative Transfer Payments

Tables

Table 2-1 Utility Mergers and Acquisitions in North Central U.S.
Table 2-2 Restructuring Activity in States Adjacent to Nebraska
Table 3-1 Nebraska Retail Customers
Table 3-2 Comparative Average Energy Costs
Table 3-3 Nebraska Electric Consumer Bill of Rights
Table 5-1 Sample Cost/Benefit Economic Criteria
Table 5-2 Sample Non-Economic Criteria
Table 5-3 Power Plant Production Cost
Table 5-4 Cost Per Kilowatt Hour Purchased At Wholesale
Table 5-5 Survey of Resale Service
Table 5-6 Reserve Margins
Table 5-7 Retail Service and Rate Requirements
Table 5-8 Range of Authority to Conduct Business
Table 5-9 Nebraska Utility Consumer Services
Table 5-10 OSHA Incident Rates Per 100 Employees
Table 7-1 Entities and Range of Tax Payments Under Three Models
Table 8-1 Comparative Average Electric Costs
Table 8-2 Variance in Estimated Impacts Of Retail Competition on Nebraska
Table 8-3 Transition Costs
Table 8-4 Summary of State Transition Cost Provisions
Table 8-5 Nebraska Generation Plant Value
Table 8-6 Decommissioning Costs
Table 8-7 Types of Transition Costs Under Each Model
Table 8-8 Types of Stranded Costs Under Each Model
Table 8-9 Issues Related to Quantification of Transition Costs
Table 8-10 Methods of Transition Cost Mitigation
Table 8-11 Participants to Pay Transition Costs
Table 8-12 Forms of Transition Cost Collection
Table 8-13 Payments to Local and State Government, 1995
Table 8-14 Tax Collection Points and Requirements

Maps

Map M1-1 State Average Electric Prices for All Customers 1997
Map M2-1 Status of Electric Industry Restructuring By State, June 1999
Map M3-1 State Average Electric Prices for Industrial Customers 1997
Map M3-2 State Average Electric Prices for Commercial Customers 1997
Map M3-3 State Average Electric Prices for Residential Customers
Map M4-1 Nebraska Retail Service Areas
Map M4-2 Mid-Continent Area Power Pool (MAPP)
Map M5-1 Nebraska High-Voltage Transmission System
Map M5-2 Nebraska Sub-Transmission System