Opinion ID: 8065946
Heading Depth: 1
Heading Rank: 1

Heading: analysis

Text: MUD generally claims that the PSC erred when it approved Black Hills’ Application No. P-12.32, and it sets forth various respects in which it asserts the PSC erred in reaching its decision to approve the application. MUD’s claims of specific error focus on the PSC’s May 12, 2010, order on Application No. P-0014 and the effect of that prior order on the current proceedings. MUD asserts, inter alia, that because of the prior order, the PSC did not have authority in this case to determine whether Black Hills’ current application was in the public interest. We therefore begin by reviewing the PSC’s statutory authority with respect to the current proceedings and - 824 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 then address MUD’s specific arguments regarding the effect of the order in Application No. P-0014 and the other evidence submitted with respect to Application No. P-12.32 PSC Had Statutory Authority to Determine Whether Black Hills’ Application Was in the Public Interest. The proceedings in this case are generally governed by relevant provisions of the State Natural Gas Regulation Act, Neb. Rev. Stat. §§ 68-1801 through 68-1868 (Reissue 2018), specifically §§ 68-1858 through 68-1864, regarding enlargement or extension of service areas of metropolitan utilities districts and of jurisdictional utilities that operate in the same county. In the present case, it appears undisputed that MUD is a metropolitan utilities district and Black Hills is a jurisdictional utility and that both operate in Sarpy County. Also, it appears undisputed that Black Hills has a natural gas franchise with Papillion. Of particular relevance in this case are the following statutes: § 68-1863, which sets forth when a proposed enlargement or extension of a service area is required to be submitted to the PSC for review and which provides that, under certain circumstances, a proposed enlargement or extension will be conclusively presumed to be in the public interest; § 6-1861, which provides for a rebuttable presumption that certain enlargements or extensions are in the public interest; and § 66-1860, which sets forth factors for the PSC to consider when determining whether an enlargement or extension is in the public interest. Section 66-1863 provides in relevant part: (1) Except as provided in subsections (2) and (3) of this section, no jurisdictional utility or metropolitan utilities district proposing to extend or enlarge its natural gas service area or extend or enlarge its natural gas mains or natural gas services after July 14, 2006, shall undertake or pursue such extension or enlargement until the proposal has been submitted to the [PSC] for its - 825 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 determination that the proposed extension or enlargement is in the public interest. . . . In making a determination whether a proposed extension or enlargement is in the public interest, the [PSC] shall consider the factors set forth in sections 66-1860 and 66-1861. . . . .... (3) If no person or entity has filed with the [PSC] a protest alleging that the proposed extension or enlargement is not in the public interest within fifteen business days after the date upon which the application was made public, the enlargement or extension shall be conclusively presumed to be in the public interest and the jurisdictional utility or metropolitan utilities district may proceed with the extension or enlargement without further [PSC] action. Section 66-1861 provides in relevant part: In determining whether an enlargement or extension of a natural gas service area, natural gas mains, or natural gas services is in the public interest pursuant to section 66-1860, the following shall constitute rebuttable presumptions: .... (2) Any enlargement or extension by a jurisdictional utility within a city other than a city of the metropolitan class in which it serves natural gas on a franchise basis or its extraterritorial zoning jurisdiction is in the public interest[.] Section 66-1860 provides in relevant part: No jurisdictional utility or metropolitan utilities district may extend or enlarge its natural gas service area or extend or enlarge its natural gas mains or natural gas serv­ices unless it is in the public interest to do so. In determining whether or not an extension or enlargement is in the public interest, the district or the utility shall consider the following: - 826 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 (1) The economic feasibility of the extension or enlargement; (2) The impact the enlargement will have on the existing and future natural gas ratepayers of the metropolitan utilities district or the jurisdictional utility; (3) Whether the extension or enlargement contributes to the orderly development of natural gas utility infrastructure; (4) Whether the extension or enlargement will result in duplicative or redundant natural gas utility infrastructure; and (5) Whether the extension or enlargement is applied in a nondiscriminatory manner. Applying these statutes, the proceedings in this case were initiated because, in the ordinary course, Black Hills was required under § 66-1863(1) to submit to the PSC its proposal for extension or enlargement of its service area so that the PSC could determine whether the proposed extension or enlargement was in the public interest. Because MUD protested the application, Black Hills could not rely on § 66-1863(3) and “proceed with the extension or enlargement without further commission action” on the basis that its application was “conclusively presumed to be in the public interest.” Instead, the PSC was required to determine whether the proposed extension or enlargement was in the public interest. But under § 66-1861(2), there was a rebuttable presumption that the enlargement or extension proposed by Black Hills was in the public interest because Black Hills was a jurisdictional utility which served Papillion on a franchise basis and the proposed service area was within Papillion’s extraterritorial zoning jurisdiction. Therefore, pursuant to these statutes, the PSC had authority to determine whether Application No. P-12.32 was in the public interest. We address below MUD’s argument that the PSC’s order on Application No. P-0014 precluded the PSC from exercising that authority with respect to Application No. P-12.32. - 827 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 PSC Order in Application No. P-0014 Did Not Preclude PSC From Determining Public Interest With Respect to Application No. P-12.32. MUD’s protest and its arguments on appeal focus mainly on the relevance of the PSC’s order on Application No. P-0014 in 2010. Because no protest was filed against that application, the PSC’s order stated that it was “‘conclusively presumed’” under § 66-1863(3) that the application was in the public interest and that no further action was required of the PSC. MUD claims that the entry of the order in Application No. P-0014 and the conclusive presumption under § 66-1863(3) preclude the PSC from determining whether the current application by Black Hills in Application No. P-12.32 is in the public interest. MUD further argues that even if the conclusive presumption does not preclude the PSC’s consideration of public interest with respect to the current application, the PSC disregarded the terms of Application No. P-0014 and the course of dealings between Black Hills and MUD since the entry of the PSC’s order in 2010. We reject these arguments. First, MUD argues that the operation of the conclusive presumption under § 66-1863(3) is such that the presumption applies to a subsequent application that is at odds with the earlier application and that the conclusive presumption cannot be overcome with evidence of current conditions at the time of the subsequent application. MUD therefore asserts that because in Application No. P-12.32 Black Hills proposes an extension of its service area into an area that was previously assigned to MUD in Application No. P-0014, the conclusive presumption precludes Black Hills from showing that its current application is in the public interest. In this regard, MUD relies on, inter alia, Nebraska P. P. Dist. v. Huebner, 202 Neb. 587, 276 N.W.2d 228 (1979), in which this court determined that once an order entered by the PSC approving an application became final, it could not thereafter be revoked. This court reasoned in that case that - 828 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 “[t]here must be some finality to judgments and persons must be able to rely at some point in time upon the action of an administrative body.” Id. at 594, 276 N.W.2d at 232. MUD argues that the order on Application No. P-0014 conclusively determined that it was in the public interest for the site at issue in this case to be in MUD’s service area and that the PSC effectively revoked that order when it determined that Black Hills’ application to extend its service area to the site was in the public interest. In response, Black Hills and the PSC cite authority in other contexts which indicate that an agency’s determination on a specific application does not foreclose the agency from determining issues in later applications. In First Nat. Bank of Bellevue v. Southroads Bank, 189 Neb. 748, 753, 205 N.W.2d 346, 349 (1973), this court held that “an order of the Department of Banking denying an application for a bank charter does not amount to an adjudication for the future and is not res judicata as to another application of the same nature subsequently filed.” This court reasoned in First Nat. Bank of Bellevue v. Southroads Bank that the prior determination did not “prevent[] further inquiry into the issue,” particularly “where there has been a substantial or material change in the circumstances or conditions intervening between the two decisions.” 189 Neb. at 751, 205 N.W.2d at 348. The decision in First Nat. Bank of Bellevue v. Southroads Bank relied in part on In re Application of Union P. R. R. Co., 149 Neb. 575, 578, 31 N.W.2d 552, 554 (1948), in which this court stated: “The ruling of the railway commission or of this court on the question of discontinuance of an agency at any given time does not amount to an adjudication for the future. It is only a judgment on the condition presented by the application and relates only to the time and conditions presented.” (Quoting Thomson v. Nebraska State Railway Commission, 142 Neb. 477, 6 N.W.2d 607 (1942).) This court in First Nat. Bank of Bellevue v. Southroads Bank described In re - 829 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 Application of Union P. R. R. Co. as “demonstrat[ing] the time frame reference of orders involving issues of public convenience and necessity.” 189 Neb. at 752, 205 N.W.2d at 348. This court noted that both the Department of Banking and the Nebraska State Railway Commission were authorized by statute to act upon applications made to the agency “based upon a determination of public convenience and necessity.” Id. [5] Under the statutes set forth earlier in our opinion, the PSC is charged to act upon applications made by utilities and to make determinations of the public interest with respect to such applications. Similar to the statutes governing other agencies, the statutes governing the PSC inherently include a timeframe for determinations of the public interest and require the PSC to determine the public interest at the time of a specific application. The determination of the public interest with regard to a specific application is based on the conditions presented by the application and relates directly to the time and conditions presented, and it does not amount to an adjudication for the future. Therefore, the conclusive presumption under § 66-1863(3) is conclusive as to the determination of the public interest based on the time and conditions presented by the specific application, and it does not constitute a permanent determination or a conclusive presumption as to an application that may be presented to the PSC under different conditions in the future. In this case, the conclusive presumption was limited to the determination that Application No. P-0014 was in the public interest at the time that the application was filed in 2010. The order gave Black Hills and MUD authority to extend service to the referenced areas at that time. But it did not foreclose consideration of what would be in the public interest at any future date. In our view, MUD attributes greater strength to the “conclusively presumed” language in § 66-1863(3) than is warranted by the statutory language. Compare, Salem Grain Co. v. City of Falls City, 302 Neb. 548, 924 N.W.2d 678 (2019) (describing weight to be given to “conclusively - 830 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 deemed” in the public interest under Neb. Rev. Stat. § 18-2129 (Reissue 2012)). To conclude that the 2010 consensus of Black Hills and MUD embodied in the order in Application No. P-0014 and the conclusive presumption applied under § 66-1863(3) prevents the PSC from considering the public interest in the context of the current application would render meaningless the provisions of § 66-1863(1) and the role of the PSC authorizing and requiring the PSC to determine the public interest with regard to applications presented to it. See In re Guardianship of Eliza W., 304 Neb. 995, 938 N.W.2d 307 (2020) (courts strive, if possible, to give effect to all parts of a statute such that no sentence, clause, or word is rendered meaningless). MUD also argues that even if the conclusive presumption under § 66-1863(3) with regard to Application No. P-0014 did not preclude any consideration of the public interest in the present case, the PSC disregarded terms of Application No. P-0014 that set forth how future disagreements between Black Hills and MUD would be resolved. MUD also argues that the PSC mischaracterized the utilities’ adherence to the terms of Application No. P-0014 when it stated that it was “unclear to what extent the parties themselves relied on these maps in the past eleven years.” Application No. P-0014 provided for certain exceptions to the service areas set forth therein under specific circumstances, including, inter alia, when Black Hills and MUD “determine by agreement that it is more practical and efficient for one party to provide gas service to a customer or customers within the other party’s area of service.” MUD argues that this provision means that if the utilities do not agree to an adjustment of or exception to the agreed-upon service areas, then the service areas previously agreed upon in the application controlled. But, as set forth above, the statutes require the PSC to determine public interest when an application and protest are filed. Just as the PSC’s order on Application No. P-0014 did not preclude it from considering the current application, the - 831 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 terms agreed to by the utilities do not override the statutory requirement for the PSC to determine the current public interest with regard to a subsequent application. The utilities may not render those statutes meaningless based on the terms to which they agree. In the same respect, the utilities’ reliance or lack of reliance on the service areas and terms set forth in Application No. P-0014 do not control the statutory requirement for the PSC to determine the public interest with regard to the current application. Therefore, whether the PSC was correct when it said that the extent to which Black Hills and MUD relied on the maps was unclear, such reliance or lack of reliance would not preclude the PSC from exercising its statutory authority with respect to the current application. In summary, the order in Application No. P-0014 and the conclusive presumption of public interest thereunder did not preclude the PSC from determining public interest with regard to the current application. The terms of Application No. P-0014 and the utilities’ intervening reliance on those terms also did not preclude the PSC’s determination of the current public interest. Instead, as discussed below, these matters are among factors for the PSC to consider when determining the public interest with respect to the current application. PSC Did Not Err When It Determined That MUD Did Not Overcome Rebuttable Presumption. MUD finally argues that the PSC erred when it determined that MUD did not overcome the rebuttable presumption in favor of Black Hills’ application’s being in the public interest. MUD generally focuses its argument on the effect of the 2010 order in Application No. P-0014. As we discussed above, that order did not preclude the PSC from determining whether Black Hills’ current application was in the public interest. However, Application No. P-0014 was among the factors for the PSC when considering the current application. - 832 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 Considering all the evidence before the PSC, we conclude that the evidence supported the PSC’s determination that MUD did not overcome the rebuttal presumption under § 66-1861(2) and that Application No. P-12.32 should be approved as in the public interest. Because Black Hills was a jurisdictional utility with a franchise to serve Papillion and because the proposed OPPD site was within the extraterritorial jurisdiction of Papillion, under § 66-1861(2) there was a rebuttable presumption that Black Hills’ extension of its service area to the site was in the public interest. The PSC therefore needed to consider the evidence presented to determine whether that rebuttable presumption was overcome by MUD. Although the 2010 order in Application No. P-0014 did not preclude the PSC’s consideration of the public interest in this case, the terms and effect of Application No. P-0014 were properly among the factors for the PSC to consider in determining whether MUD overcame the rebuttable presumption. We acknowledge that the service areas set forth in the 2010 application were a relevant consideration, but the PSC’s determination of the public interest was properly focused on conditions at the time of Application No. P-12.32. In addition to what had been agreed to between Black Hills and MUD in 2010, it was proper for the PSC to consider what had happened since 2010 and how conditions relevant to the public interest had changed since that time. In particular, OPPD had announced its need for service at 168th Street and Fairview Road in Sarpy County. Further, Papillion and Springfield had resolved their dispute, and pursuant to their agreement, the OPPD site came within the extraterritorial jurisdiction of Papillion, which was serviced by Black Hills. Conditions existing when Application No. P-12.32 was filed in 2021 supported the determination that the current application was in the public interest. In 2010, Black Hills and MUD had agreed in Application No. P-0014 that the site, which is at issue in the current application, should be part of - 833 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813 MUD’s service area. However, as noted above, the evidence in this case indicates that the determination of service areas in Application No. P-0014 was based on expectations of future growth in Sarpy County and that in 2010, Black Hills and MUD expected that the site at issue in this case would be in the area of growth for Springfield. Because MUD served Springfield, the site was included in MUD’s service area in Application No. P-0014. However, in the intervening years, Papillion and Springfield resolved ongoing disputes by agreeing that, inter alia, the site at issue in this case would be in the extraterritorial jurisdiction of Papillion, which was serviced by Black Hills. Therefore, the expectation of 2010 was contrary to the reality of 2021 and the public interest shifted to the site’s being served by Black Hills, which had a franchise with Papillion. Furthermore, Black Hills indicated in Application No. P-12.32 that there were no MUD mains within a quarter mile of the proposed OPPD site. The site was within MUD’s service area under Application No. P-0014, and based on the conclusive presumption under § 66-1863(3), MUD was permitted at the time in 2010 to “proceed with the extension or enlargement without further [PSC] action.” But there was no evidence in the present proceeding to indicate that between 2010 and 2021, MUD had taken demonstrable action to extend service to the site based on the authority of Application No. P-0014. More particularly, after OPPD announced its plan to build facilities on the site, there is no indication that MUD actively took steps to extend service to that site based on the order in Application No. P-0014, nor did it seek specific approval to extend service to the site. Our review of the record indicates that the PSC did not err when it determined that MUD had not overcome the rebuttable presumption that Application No. P-12.32 was in the public interest. The record instead indicates that the application was shown to be in the public interest and that the PSC did not err when it approved Application No. P-12.32. - 834 - Nebraska Supreme Court Advance Sheets 311 Nebraska Reports IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS Cite as 311 Neb. 813