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11.11.03 Nebraska muni cannot engage in off-system gas sales, PSC says Acting on what it interpreted to be the will of state legislators, the Nebraska Public Service Commission has rejected the Metropolitan Utilities District of Omaha's proposal to sell gas to large customers served by other utilities. In a November 4 decision, the PSC said it was persuaded by arguments submitted by regulated utility Aquila and unregulated gas marketer Cornerstone Energy. The two companies argued that the Nebraska Legislature did not grant "either expressed or implied" authority for M.U.D. to engage in off-system sales or to act as a "competitive natural gas provider." The commission acknowledged that it has no control over M.U.D.'s rates but said it does have jurisdiction over gas marketers in Nebraska. The PSC also said that if the municipally owned utility wants to pursue "nonregulated business enterprises," it must first receive permission from the Legislature. According to the PSC ruling, M.U.D. was "not proposing to be a certified natural gas provider on its own system or within its own service area to more efficiently use assets that it has overbuilt to serve its own needs. Instead, M.U.D.'s stated intent is to market its excess capacity, and to otherwise engage in competitive marketing activity on PSC-regulated utility systems. If M.U.D. were allowed to pursue that business, it would only serve "to cause a shift of costs from transportation customers of M.U.D. to the remaining sales customers" of other for-profit utilities, the PSC said. A spokesman for Aquila said the company believes "it is not good public policy for governments to engage in businesses that have high risks associated with them and that encroach into products and services already available in the private sector." M.U.D. said its interest in providing off-system service stemmed from inquiries from large industrial end-users that wanted to save money on energy costs. A spokesman (General Manager Tom Wurtz) for the muni said one prospective customer could have saved $300,000/year by buying gas from M.U.D. The spokesman also insisted that the new source of income from off-system sales would help the muni hold down its fixed costs because any profits generated from those sales could be used to ease pressure on M.U.D.'s own residential and commercial customers. |
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