Opinion ID: 1625906
Heading Depth: 1
Heading Rank: 7

Heading: Statutory Interplay

Text: The city's argument begins with our declaration in Cornhusker P.P. Dist. v. Loup River P.P. Dist., 184 Neb. 789, 798, 172 N.W.2d 235, 240 (1969), that [a]rea service contracts must be respected in the furtherance of the intent of the statute unless and until the supplier is unable to provide the service in accordance with the guidelines set out in section 70-1007.... Pointing out that § 70-1010(1) subjects an application to modify a service area to the same procedures as to notice, hearing, and decision ... as in the case of an original application, the city concludes that the elements of § 70-1007 are as controlling in an application to modify an existing service area as they are in an application for the initial establishment of a service area under the provisions of § 70-1005. It is true that in Cornhusker P. P. Dist., we relied upon the factors enumerated in § 70-1007 to determine whether the supplier in that case was unable to provide the service. However, in Cornhusker P.P. Dist., we did not, as the city infers, hold that § 70-1007 is to be applied in modification cases on a best provider wins basis. Moreover, the city's argument overlooks the effect of 1979 Neb.Laws, L.B. 223. Prior to the enactment of L.B. 223, § 70-1008 (Reissue 1976) provided: In the absence of an agreement between the suppliers affected and notwithstanding the provisions of subdivisions (1) to (5) of section 70-1007: (1) In the zoning area surrounding any municipality and outside the corporate limits thereof, if such municipality operates a retail system, it shall have the right to serve such zoning area at retail except as to such customers as are presently served by other suppliers. Such a municipality may acquire the facilities of other suppliers in such zoning area by negotiation. (2) In determining the service area of a municipally-owned electric system, there shall be included, as a maximum, the corporate area of the municipality, the zoning area outside the corporate limits of such municipality, and the area beyond the zoning area which is presently being served by such municipality, including not more than the area one half mile on each side of the line presently used by such municipality to serve its existing customers, except for customers presently served by other suppliers. When any new customer outside the corporate limits of any municipality and outside the zoning limits surrounding such municipality locates closer to electric lines owned by other suppliers in the municipal service area as provided for in this section, in case of disagreement, the question of which supplier shall serve such new customer shall be submitted to the Nebraska Power Review Board for determination under the standards set forth in section 70-1007. Thus, L.B. 223 removed the zoning area preference previously afforded to municipalities by § 70-1008; the present language of § 70-1008 makes annexation the event which triggers a municipality's right to serve the new area. This more specific language controls over the general language of §§ 70-1007 and 70-1010(1) and thus limits the board's power to amend certified service areas to the grounds specified in § 70-1011. It is true that subdivision (3) of § 70-1008 (Reissue 1990) provides for joint planning between [a]ll retail power suppliers having adjoining certified service areas utilizing the considerations specified in section 70-1007. Upon a first reading, this provision appears inconsistent with the earlier language of § 70-1008 that in the absence of an agreement and notwithstanding the provisions of § 70-1007, existing service areas shall remain as certified service areas. It is logically impossible to consider and at the same time not consider the § 70-1007 factors. However, although not artfully drawn, the proviso requiring consideration of the § 70-1007 factors in joint planning harmonizes with the notwithstanding language by recognizing that the planning provision is nothing more than a nonbinding tool to be used under appropriate circumstances. As a consequence, absent the concurrence of the suppliers, the only present means of obtaining a modification of a service area is by meeting the requirements set forth in § 70-1011, that is, by establishing that the present supplier cannot or will not furnish adequate electrical service or that its doing so involves a wasteful and unwarranted duplication of facilities.