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1.15.05 Judge rules against M.U.D. An attempt by M.U.D. to extend natural gas service into undeveloped southern Sarpy County violated state law because the utility didn't act in the public's interest, a Lancaster County District Court judge has ruled. The ruling potentially strands a $400,000 gas transfer station that Metropolitan Utilities District built but cannot use. It also could affect M.U.D.'s ability to compete for gas customers in what is one of the metropolitan area's most lucrative growth areas. Tom Wurtz, president of M.U.D., said the utility is considering its options. It may appeal the ruling, or it may turn to the Legislature for help. At issue is a new gas transfer station that M.U.D. had built at 174th Street and Fairview Road and a gas main that the utility was building south of Nebraska Highway 370. A gas transfer station is where gas is pulled off an interstate pipeline for distribution into a community. The main would have connected M.U.D. to the transfer station. M.U.D. has said the project wasn't motivated by potential for future growth in the rural area around the transfer station and gas main. Instead, the utility said, it wanted to reduce a safety risk at a similar facility in central Omaha. The distinction is important because it determines what analysis M.U.D. had to undertake before launching the project. It also determines whether the project is governed by state law. In his decision, Judge Paul D. Merritt Jr. acknowledged that the new facilities would help relieve a problem in central Omaha. But, he wrote, future growth was the "compelling factor" in the project. M.U.D., the judge wrote, appeared to be trying to "leapfrog as far to the southwest as possible to establish a foothold in what is anticipated . . . to be a fertile area for future customers." Given that expansion was the true purpose, the judge wrote, the utility was obliged to conduct an economic and needs analysis, which it did not do. "While (the expansion) may very well be an indication of good business acumen," the judge wrote, "it does not take into consideration orderly development." The case against M.U.D. initially was brought by its competitor in the metropolitan area, Aquila Inc. In May 2003, Aquila filed a complaint about the project with the Nebraska Public Service Commission. The commission ruled in Aquila's favor, and M.U.D. took that ruling to the Lancaster County District Court, which resulted in Merritt's decision this month. Both Aquila and M.U.D. provide natural gas in various areas of Sarpy County, and the two utilities sometimes spar over customers. M.U.D. also had questioned the Public Service Commission's authority over it. Regulation of gas utilities is a new area for the state, and the extent of its authority is still being ironed out. Jan Davis of Aquila said the ruling validated the commission's authority over M.U.D. It also demonstrates that Aquila was justified in filing a complaint against M.U.D., she said. The ruling illustrates the need for the Legislature to draw boundaries for gas utilities so that ratepayer money isn't misspent, she said. Wurtz said M.U.D. won't be out any money because the gas transfer station will be sold if M.U.D. can't use it. "I don't see any effect on ratepayers one way or the other." |
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