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3.3.06 Look harder, lawmakers Local control, constitutional issues raised by proposal would hamstring M.U.D.'s growth. After debate and discussion, despite a reportedly spirited round of political arm-twisting, the Nebraska Legislature has leapt in the right direction: an interim study on Legislative Bill 1249, which would set mandated service areas for M.U.D. and other natural-gas utilities. The study will look at the constitutionality of the measure. LB 1249, introduced by State Sen. David Landis of Lincoln, would smother the natural growth patterns of Omaha's Metropolitan Utilities District, hamstring its flexibility to respond to changing urban pressures and put the utility squarely under the thumb of the Nebraska Public Service Commission. M.U.D., which also provides water to the Omaha area, now is guided by a locally elected board of directors. Directors and staff have managed growth and expansion well; the Omaha area has prospered in the 90-plus years M.U.D. has served it. The agency's policy of careful management of employees and supply and studied expansion of the gas delivery system has provided households, businesses and industries in the metropolitan area with some of the lowest natural-gas rates in the nation. That fact, plus M.U.D.'s dependable service, has helped city officials attract businesses and industries to the Omaha area. Among other things, the measure would give the PSC in Lincoln the power to decide whether M.U.D.'s service boundaries would parallel Omaha's zoning district and annexation pattern. Continued reasonable growth is vital to the utility and its ratepaying customers. M.U.D. relies on growth to spread its fixed costs over a larger customer base and to provide the additional income needed to keep the system in shape. Sen. Pat Bourne of Omaha, who introduced the interim committee resolution, suggested that there were complex constitutional points about franchising and the interplay of service areas and municipalities. M.U.D. officials said the law appears to give to Aquila Inc. -- without compensation -- facilities paid for by M.U.D. customers, potentially a due-process problem. Perhaps the study might resolve other issues, too. For instance, how do M.U.D. ratepayers benefit if their locally elected board of directors is often required to trot, hat in hand, to the state Public Service Commission for permission to do what board members know is right? M.U.D.'s board knows its community and its needs far better than any state overseer could. Board members are not politicians but, rather, are solid members of the community, knowledgeable business people and managers. The PSC's constituency is large and diverse, as are the issues it addresses. Elections in which M.U.D.'s own customers decide on who should run their utility serve the community far better. Tom Wurtz, president of M.U.D., cautioned in a letter to lawmakers that if the measure should pass, "fixed costs will rise, competition will be eliminated and the price of natural gas will be raised for all customers." That would include M.U.D.'s natural-gas price. The initial increase in local gas rates, he suggested, could be in the vicinity of 10 percent. LB 1249 raises far too many red flags to be dealt with adequately in the waning days of this short legislative session. Bourne was wise to ask for an interim study. The committee should answer not only the constitutional questions but also the issues raised by the significant reduction in local control. |
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