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Nebraska Supreme Court: Extension of Natural-Gas Main is in “Public Interest” Despite Prior Agreement

on Tuesday, 28 June 2022 in Dirt Alert: David C. Levy, Editor

In re App. No. P-12.32 of Black Hills Neb. Gas, 311 Neb. 813 (2022).

The Nebraska Public Service Commission (“PSC”) has broad authority to regulate natural-gas providers in Nebraska. Under Nebraska Revised Statutes section 66‑1863, a provider must obtain PSC approval before expanding or enlarging its service area.[1] The standard of review is whether the expansion or enlargement is in the “public interest.”  § 66-1860.

Here, Black Hills Energy applied to extend a gas main in Papillion. According to Black Hills, this expansion was in the public interest because it would support primarily residential growth in the area. 

A different natural-gas provider, Metropolitan Utilities District (“MUD”), however, protested the application. Based on a 2010 agreement with Black Hills, MUD argued the site was in its exclusive service area. The PSC had approved that agreement in a 2010 order. MUD thus argued that the PSC’s 2010 order conclusively rendered the Black Hills expansion contrary to the public interest.

The PSC approved Black Hills’ application, and MUD appealed. The Nebraska Supreme Court affirmed.  

The Court agreed with the PSC that Black Hills’ expansion is in the public interest. Black Hills is a jurisdictional utility with a franchise to serve Papillion. Thus, section 66-1861(2) provides a rebuttable presumption that Black Hills’ extension is in the public interest.

MUD could not rebut that presumption. The Court held that the 2010 order did not preclude Black Hills’ expansion. Rather, according to the Court, a prior order is merely one of many factors for the PSC to consider in evaluating public interest. Under section 66-1860, the main consideration in each application is present public interest.

[1] All statutory references are to the Nebraska Revised Statutes.

Hannes D. Zetzsche

Ryan T. McKeever

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