Retail Choice To Be Debated Today in Nebraska

A legislative hearing is being held today on a bill (LB660) referred to as The Nebraska Retail Electricity Choice Act that would remove restrictions on what electricity providers Cornhusker State ratepayers can choose, the NBC-TV news affiliate in Scottsbluff reported on February 14.

If the law passes, retailers will be allowed to compete with in-state utilities. LB 660 also would revoke the right of public power entities to seize private assets used in the generation, transmission, and distribution of electricity through the use of eminent domain.

Nebraska currently is the only “public power” state in America. Indeed,  NBC said that the Nebraska Public Power District plans to testify that, to date, 17 states have chosen retail choice; and, on average, customers in those areas actually are paying 31 percent more than those in Nebraska.

“In that grouping of states that has retail choice, their average kWh cost was 12.8 cents. In the states that had opted not to adopt retail choice, 9.4 cents,” Pat Pope, CEO of NPPD told the network affiliate.

NPPD is a non-profit, which Pope says puts their focus on its customers. “What are the drivers between an all public power utility like NPPD, and an investor owned utility? Their primary stakeholders are two different groups. In public power, our primary stakeholder group is our customers,” said Pope.

According to the U.S. Energy Information Administration 2015 rankings, Nebraska had the tenth lowest residential electric rates in the country.

However, a study conducted on behalf of the Omaha, Nebraska-based Platte Institute for Economic Research found last January that, while electricity rates in the Cornhusker State are the third-lowest in the West North Central (WNC) region of the country, they are increasing at a much faster pace than those in neighboring states.

The research paper – entitled The Costs and Benefits of Public Power in Nebraska: An Investigation of Electricity Rates, Taxes, and Competitiveness  was produced by economist Dr. Ernie Goss and research economists Jeffrey Milewski and Scott Strain of Creighton University, also in Omaha, and was released by the institute on December 30, 2015.

What’s more, rates would be be decided differently, if the measure passes. Under the new law, instead of granting utilities’ publicly elected boards of directors rate-setting authority, that responsibility would be shifted to the Public Service Commission, “in order to regulate a competitive electric market for the benefit of all Nebraska residents,” the bill states.

Pope says those who want this bill to pass think they’ll have lower rates, but it will not be true in the long run. “Right now maybe our price is a fraction above what the best deal that the developer might be touting. That’s fine, but that’s not the long term price, and people always need, I think to look at the long term value,” he told NBC.

If the bill passes, a substantial regulatory restructuring requiring the involvement of the Public Service Commission will add cost to taxpayers, the local news outlet said.

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