Court Opinion

ID: 9847813
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:07:48.012905+00
Date Added: 2024-06-11T09:17:35.519359
License: Public Domain

Spencer, J.,
dissenting.
I respectfully dissent from the majority opinion herein because I am convinced that a fair appraisal of the situation reveals the sole purpose of the agreement between Norris Public Power District and Nebraska Public Power District is to limit competition and institute a captive market. Such application of our statutes is contrary to public policy.
Section 70-625.02, R. R. S. 1943, states: “It is declared to be the policy of the State of Nebraska that electric transmission facilities and interconnections which are defined as being electric lines having a rating of thirty-four thousand five hundred volts and higher will be provided and made available to all power agencies- so as to result in the lowest possible cost for the transmission and delivery of electric energy over the transmission and interconnected facilities of any public power district, public power and ' irrigation district, ■ municipality, governmental subdivision, or nonprofit- electric cooperative corporation.”
*569It certainly cannot be said that the above-declared policy of the State of Nebraska is being effectuated by limiting a municipality’s access to a source of power through a wholesale sale agreement. It is patently apparent an opposite result is being achieved.
Section 70-1001, R. R. S. 1943, provides in part: “* * * it is the policy of this state to avoid and eliminate conflict and competition * * * in furnishing electric energy to retail and wholesale customers, to avoid and eliminate the duplication of facilities and resources which result therefrom, and to facilitate the settlement of rate disputes between suppliers of electricity.” This should obviously be interpreted as follows: “* * * it is the policy of this state to avoid and eliminate conflict and competition * * * (in order) to avoid and eliminate duplication of facilities and resources which result therefrom, and (in order) to facilitate the settlement of rate disputes * *
That is, the purpose of these statutes is not to avoid conflict in competition per se, but rather to avoid those particular sorts of conflict and competition which cause costly and unnecessary duplication of facilities and impede the settlement of rate disputes.
In order for any particular application of these statutes to accord with the public policy, it is necessary that such application conform to the purpose of these statutes outlined above. The public policy which serves as the underpinning for such anti-competition agreements is very limited. It is a carefully defined exception to the rule that agreements which limit competition are normally contrary to public policy. Obviously it follows that an application of these statutes which serves to destroy the normal competitive market system, while not furthering the announced purposes of these statutes, is void as contrary to our public policy. In most instances the general public is being adequately served before the implementation of the limiting agree*570ment. Consequently, the Agreement is not serving the interest of the general public but rather that of the power companies.
A limiting agreement of this sort cannot be held to further the purposes declared by our Legislature unless there is evidence indicating that retention of the present form of service will result in costly and unnecessary duplication of facilities or impede settlement of rate disputes. In this case, the evidence is definitely otherwise. Diversity of sources, an ability to shop around, so to speak, becomes important to a municipality operating its own facility. Only by matching its particular consumption pattern with that of several suppliers can it be assured of the lowest possible cost per unit of power purchased. It is apparent that as each competing source of supply is eliminated the municipality faces a much more difficult task in minimizing the cost of electrical energy to its retail customers.
It is here argued that wholesale agreements actually hold down costs. This definitely is not true in the present situation. In Crete for example, Norris is not allowed to sell to, or buy from, the city even though its lines are already close by, and actually interconnected into the city through the NPPD system. These lines are a necessary length in the power grid rather than a duplication of facilities, and will be utilized whether Crete is able to purchase from Norris or not. It makes little sense to say there is a saving of money when the necessary facilities for purchasing a district’s power are already in existence and are maintained by the district. It should be noted that this situation is not only common to the city of Crete, but is also found in many other municipalities throughout the state.
Many of the evils that led to the passage of antitrust legislation are present where public power districts have agreed to divide their service areas. Trade area agreements rarely have any purpose other than to suppress *571competition and correspondingly increase costs. Through such an agreement a public supplier acquires monopolistic power and is able to manipulate rates while at the same time dictating terms of sale.
I cannot agree with the majority opinion that there is evidence sufficient to sustain a finding that wholesale power can be supplied to the area at a reasonable cost. Representatives of both districts simply testified by way of conclusion that such would be the case. No sufficient showing was made to sustain that conclusion. The evidence offered in opposition was to the effect that the rates were different, and therefore would have an adverse or different effect, depending upon who the supplier was.
While it is true that an administrative agency can forego some of the stringencies of the rules of evidence, it is not true that it can entirely ignore them when the approval of the agreement is dependent upon a specific finding, and the parties fail to produce evidence to sustain that finding. In Midwest L. C. Co. v. Tri-State L. C. Co. (1967), 182 Neb. 41, 151 N. W. 2d 908, we said: “While an administrative agency may relax the strict rules of evidence in affording a full and fair hearing, it must in every instance require any action taken by it to be supported by competent and relevant evidence.”
In City of Schuyler v. Cornhusker P. P. Dist. (1967), 181 Neb. 704, 150 N. W. 2d 588, we held: “An order of the Nebraska Public Power Review Board which is not sustained by the evidence will be reversed.” See, also, Cornhusker P. P. Dist. v. Loup River P. P. Dist. (1969), 184 Neb. 789, 172 N. W. 2d 235.