Sunday, October 09, 2005

Supremes hold that State Public Service Commission has authority to regulate Metropolitan Utilities District's bid to market natural gas to customers of other utilities. In re Application of Metropolitan Util. Dist., 270 Neb. 494 October 7, 2005. No. S-04-662. State regulators have authority over the Metropolitan Utilities District's bid to sell natural gas to other utilities' customers, the Nebraska Supreme Court ruled Friday. "The Nebraska Public Service Commission (Commission) dismissed the application of the Metropolitan Utilities District of Omaha (MUD) for certification as a competitive natural gas provider (CNGP). The district court "affirmed," finding that the Commission lacked jurisdiction. The Commission appeals, contending that it has jurisdiction over MUD under Neb. Rev. Stat. §§ 66-1848 and 66-1849 (Reissue 2003). MUD argues, however, that the Commission lacks jurisdiction because of Neb. Rev. Stat. § 57-1306 (Reissue 2004). We determine that the newer and more specific statutes, §§ 66-1848 and 66-1849, apply and give the Commission jurisdiction over MUD's application. Accordingly, we reverse, and remand for further proceedings." The high court reversed a Lancaster County District Court decision that said the Nebraska Public Service Commission lacked jurisdiction over the publicly owned utility. We determine that per "Neb. Rev. Stat. §§ 68-1811 (Reissue 2003) and 66-1849 the Commission is a required party in the action and could appeal the court's order." "MUD is correct that § 57-1306 states that the Commission does not have jurisdiction over a metropolitan utilities district except for disputes brought under §§ 57-1301 to 57-1307. But the statutes specifically pertaining to CNGP's were passed later and provide the Commission with jurisdiction over all CNGP's. In particular, § 66-1848 defines a CNGP as a person who sells gas for consumption by a retail end user. It then excludes metropolitan utilities districts only in areas in which it provides natural gas service through pipes it owns--which is not the case here. This more specific provision of § 66-1848 trumps the general provisions of § 57-1306, particularly when considering the stated legislative desire that the Commission's powers "shall be liberally construed." See § 66-1804(2)." But the lower court still will have to decide whether MUD should be certified as a competitive natural gas provider and allowed to market gas outside its territory. The utility sought approval to market gas in 2003. Utility officials said they made the request after receiving inquiries from a couple of major industries wanting to save money on their gas bills. The Public Service Commission turned down the application. Commissioner Anne Boyle said the panel found no indication that the Legislature ever intended for public utilities to market natural gas. Marketing gas is different from providing gas to customers within the MUD territory, because it would be done on a selective basis and gas would be sold on whatever terms the two parties agreed to. The utility appealed the commission's decision in District Court, which ruled that the commission had no authority over the utility. The commission, in turn, appealed to the Nebraska Supreme Court. Cornerstone Energy, Aquila and NorthWestern Energy all joined on the side of the commission. Officials from Aquila, a private competitor to MUD, were happy with the Supreme Court decision, said spokeswoman Jan Davis. But they aren't ready to declare victory until they see how the district court rules on the marketing issue, she said. MUD officials were muted in their reactions as well. President Tom Wurtz said the utility will continue to fight the case in the lower court and, if need be, in the Legislature. He said companies should be able to turn to MUD to save money on gas. Allowing MUD to market natural gas also could help with economic development by reducing the cost of doing business. The case has no effect on current customers and operations, said Dan Crouchley, general counsel for MUD. It also has no effect on the utility's dispute with the commission over building natural gas lines into Sarpy County, he said

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