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

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www.nebraska.gov/apps-courts-epub/
07/28/2022 07:07 AM CDT
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813In re Application No. P-12.32 of Black
Hills Nebraska Gas, LLC.
Metropolitan Utilities District, appellant, v.
Black Hills Nebraska Gas, LLC,
et al., appellees.
___ N.W.2d ___
Filed June 17, 2022. No. S-21-620.
1. Public Service Commission: Appeal and Error. Under Neb. Rev. Stat.
§ 75-136(2) (Reissue 2018), an appellate court reviews an order of the
Public Service Commission de novo on the record. In a review de novo
on the record, an appellate court reappraises the evidence as presented
by the record and reaches its own independent conclusions concerning
the matters at issue.
2. Administrative Law: Appeal and Error. When an appellate court
makes a de novo review, it does not mean that the court ignores the
findings of fact made by the agency and the fact that the agency saw and
heard the witnesses who appeared at its hearing.
3. ____: ____. Where the evidence is in conflict, an appellate court will
consider and may give weight to the fact that the agency hearing exam-
iner observed the witnesses and accepted one version of the facts rather
than another.
4. Administrative Law: Statutes: Appeal and Error. The meaning and
interpretation of statutes and regulations are questions of law for which
an appellate court has an obligation to reach an independent conclusion
irrespective of the decision made by the court below.
5. Public Service Commission: Time: Presumptions. The determina-
tion of the public interest with regard to a specific application to the
Public Service Commission pursuant to Neb. Rev. Stat. § 66-1863(Reissue 2018) is based on the conditions presented by the application
and relates directly to the time and conditions presented, and it does
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813not 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 deter-
mination or a conclusive presumption as to an application that may be
presented to the Public Service Commission under different conditions
in the future.
Appeal from the Public Service Commission. Affirmed.
Mark A. Fahleson, Andrew S. Pollock, and Jennifer L.
Ralph, of Rembolt Ludtke, L.L.P., and Mark Mendenhall and
Marc Willis, of Metropolitan Utilities District, for appellant.
Trenten P. Bausch and Megan S. Wright, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., and Douglas J. Law,
Associate General Counsel, Black Hills Energy, for appellee
Black Hills Nebraska Gas, L.L.C.
Douglas J. Peterson, Attorney General, and L. Jay Bartel, for
appellee Nebraska Public Service Commission.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
and Freudenberg, JJ., and Dougherty, District Judge.
Miller-Lerman, J.
NATURE OF CASE
Metropolitan Utilities District (MUD) appeals the order of
the Public Service Commission (PSC) which approved the
application of Black Hills Nebraska Gas, LLC, doing business
as Black Hills Energy (Black Hills), seeking an enlargement or
extension of its natural gas mains in Sarpy County, Nebraska.
MUD generally argues that the application was contrary to a
2010 order which it asserts conclusively established that it was
in the public interest for MUD to provide natural gas service
to the area that was the subject of Black Hills’ application. We
affirm the PSC’s order.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813STATEMENT OF FACTS
Black Hills’ Application.
On February 23, 2021, Black Hills filed an application with
the PSC pursuant to Neb. Rev. Stat. § 66-1863 (Reissue 2018)
in which it sought a determination that Black Hills’ proposed
extension of its natural gas mains to provide service to a site
in Sarpy County was in the public interest. The application
was designated by the PSC as “Application No. P-12.32.”
Black Hills asserted that it would be providing service to
Omaha Public Power District (OPPD) at a site in the area
of 168th Street and Fairview Road in Sarpy County and that
OPPD planned to build new generation facilities at the site.
The approval of Application No. P-12.32 is the subject of
this appeal.
Black Hills asserted in the application that the site at issue
was within the extraterritorial zoning jurisdiction of Papillion,
Nebraska, and that Black Hills served Papillion and its extra-
territorial jurisdiction under a current and valid natural gas
franchise. Black Hills noted that there had been litigation
between Papillion and Springfield, Nebraska, and that follow-
ing such litigation, the two cites had agreed that the site at
which OPPD planned to build its facilities would be within the
boundaries of Papillion and not within Springfield. Black Hills
asserted that because the site was within Papillion’s extraterri-
torial jurisdiction, under Neb. Rev. Stat. § 66-1861(2) (Reissue
2018), there was a rebuttable presumption that it was in the
public interest for Black Hills to provide service to the area.
Black Hills also stated that MUD did not possess a current and
valid franchise to serve areas within Papillion and that pursu-
ant to Neb. Rev. Stat. § 66-1858 (Reissue 2018), MUD could
not solicit a franchise from Papillion.
Black Hills asserted in Application No. P-12.32 that the
facilities to be built by OPPD would “support growth in
the region while ensuring high reliability of electric gen-
eration” and that the facilities would require a high volume of
natural gas which would require installation of a new main.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813Black Hills stated its preferred route for a new main would
be almost entirely within the extraterritorial jurisdiction of
Papillion and that the small portion that was not located within
such jurisdiction was not presently located within the zoning
jurisdiction of any community. Black Hills provided a map
depicting known existing infrastructure in the area of OPPD’s
proposed site, and it stated that it was not aware of any MUD
mains within a quarter mile of the proposed service area.
Black Hills finally asserted that extension of its gas distri-
bution system into the site at issue would “contribute to the
orderly development of natural gas utility infrastructure,” and
it noted that as Papillion expanded into its extraterritorial zon-
ing jurisdiction, Black Hills would be the service provider to
customers in those areas. Black Hills therefore requested an
order from the PSC determining that the proposed extension by
Black Hills was in the public interest.
MUD’s Protest.
On March 3, 2021, MUD filed a protest and motion to
dismiss Black Hills’ Application No. P-12.32. MUD gener-
ally asserted that the site of Black Hills’ extension was within
MUD’s service area as established by a 2010 order of the
PSC and that the proposed extension by Black Hills would be
duplicative of MUD’s planned extension into the area. MUD
asserted that the 2010 order established a conclusive presump-
tion that MUD’s extension into the area was in the public inter-
est and that presumption could not be overcome by additional
evidence or argument. MUD therefore requested that the PSC
“summarily dismiss and deny Black Hills’s [a]pplication, as a
matter of law.”
MUD asserted that in 2010, Black Hills and MUD had filed
a joint application with the PSC, setting forth their plans to
extend and enlarge their respective service areas. MUD further
asserted that no objections were filed to the joint applica-
tion in 2010 and that therefore, pursuant to § 68-1863(3), the
application was “conclusively presumed to be in the public
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813interest” and the two utilities were therefore allowed to pro-
ceed with their plans without further action by the PSC.
The joint application of Black Hills and MUD, upon which
MUD relies, was filed with the PSC on April 19, 2010, and
was designated by the PSC as “Application No. P-0014.” In
the application, Black Hills and MUD provided a map showing
areas within Sarpy County into which each intended to extend
or enlarge its respective service area. Black Hills and MUD
stated in the application that they stipulated and agreed that
such extensions or enlargements satisfied relevant statutory
requirements. They further asserted that they had discussed
the matter with representatives of Sarpy County and of cities
within the county, including Papillion and Springfield, and that
the application had received the support of those governmental
entities. They also attached to the application an exhibit set-
ting forth applicable conditions and providing that, except for
certain stated exceptions, neither Black Hills nor MUD would
maintain gas facilities within the other’s service area as shown
in the map. One of the exceptions was when “[t]he parties
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.”
On May 12, 2010, the PSC filed an order regarding
Application No. P-0014 in which it stated that it had sent
required notices and posted notice of the joint application filed
by Black Hills and MUD on April 19 and that such notices
stated that protests or formal interventions must be filed on or
before May 11. In the May 12 order, the PSC stated that no
protests or petitions for intervention had been filed and that
therefore, pursuant to § 66-1863(3), “the proposed enlarge-
ment or extension is presumed to be in the public interest and
Applicants may proceed with the extension or enlargement
without further [PSC] action.” The PSC therefore ordered that
the docket in Application No. P-0014 be closed without fur-
ther action.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813In its protest to Application No. P-12.32, MUD asserted
that the proposed OPPD site at issue in Black Hills’ current
application was within MUD’s service area established by
Application No. P-0014 in 2010 and that MUD was planning
to extend serv­ice to the site. MUD asserted that in Application
No. P-0014, Black Hills had agreed that MUD’s extension of
service to the area was in the public interest and that the PSC’s
order in Application No. P-0014 recognized the conclusive pre-
sumption that MUD’s extension of service to the area was in
the public interest. MUD further asserted that Black Hills’ plan
to extend service to the site would be duplicative of MUD’s
planned extension and that therefore, Black Hills’ extension
would not be in the public interest.
In sum, MUD denied that Black Hills’ extension of service
proposed in Application No. P-12.32 was in the public interest
or that it would contribute to the orderly development of natu-
ral gas utility infrastructure. MUD therefore requested that the
PSC summarily dismiss and deny Black Hills’ application.
Hearing Before PSC.
The PSC held a hearing on Black Hills’ Application
No. P-12.32 and MUD’s objection thereto on June 9, 2021. At
the hearing, exhibits offered by Black Hills and by MUD, as
well as by the PSC, were entered into the record. Both Black
Hills and MUD presented testimony by their respective wit-
nesses in the form variously of prefiled direct testimony, live
testimony, and cross-examination.
Among other evidence and testimony, Black Hills presented
testimony by Kevin Jarosz, Black Hills’ vice president of oper-
ations. Jarosz provided general background regarding Black
Hills’ history, its franchise with Papillion, and Black Hills’ plan
to extend service to the site of the planned OPPD facility. He
generally testified regarding how the proposed extension would
improve the financial profile of Black Hills and would benefit
its ratepayers.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813Jarosz also testified regarding his involvement with
Application No. P-0014 in 2010. Jarosz stated, inter alia, that
the joint application was filed in an attempt to resolve ongoing
service area disputes between Black Hills and MUD. He stated
that the parties had determined as a general matter that MUD
would serve Springfield and its future growth and that Black
Hills would serve the rest of Sarpy County. Jarosz testified that
in 2010, the parties were attempting to estimate how the cities
would grow in the future and that the parties knew at that time
there would be occasions in the future where they may need to
adjust the service area lines because of changed circumstances.
Jarosz also testified that pursuant to the resolution of a dispute
between Springfield and Papillion regarding boundary issues,
the area at issue in the present application was determined to
be in the extraterritorial jurisdiction of Papillion serviced by
Black Hills rather than that of Springfield. Jarosz further testi-
fied regarding extensions made by both Black Hills and MUD
since 2010 that were made following agreement between the
two utilities.
MUD presented evidence, including the application filed and
the order entered in 2010 regarding Application No. P-0014.
MUD highlighted portions of the map included in that applica-
tion which indicated that the site at issue in Black Hills’ cur-
rent application was in MUD’s service area at the time of the
2010 application.
MUD also presented testimony by Jim Knight, MUD’s vice
president of gas operations. Knight testified, inter alia, that
the site at issue in the present application was within MUD’s
service area pursuant to Application No. P-0014. He testified
that since 2010, Black Hills and MUD had followed their
agreement with rare exception, and that MUD had relied on
the service area maps throughout that time. Knight testified
that if Black Hills’ application was denied, MUD would pro-
vide service to the OPPD site, and that it would not need to
seek approval to do so because the site was already within its
service area pursuant to Application No. P-0014. He testified
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813that service to the area would be provided by extending a
pipeline through territory that was not currently in Black
Hills’ service area and that it would not be duplicative infra-
structure. Knight also testified that if MUD were to provide
service at the site, it would be of financial benefit to MUD
and its ratepayers.
PSC Order on Application No. P-12.32.
After the hearing, on June 29, 2021, the PSC filed an order
in which it approved Black Hills’ Application No. P-12.32. At
the beginning of its analysis, the PSC stated that because the
site at issue was within Papillion’s extraterritorial jurisdiction
and because Black Hills held a franchise with Papillion, under
§ 66-1861(2), there was a rebuttable presumption that it was
in the public interest for Black Hills to provide service to the
area. The PSC further stated that because of the rebuttable
presumption, MUD had the burden of proof to show that Black
Hills’ application was not in the public interest.
Reviewing the evidence presented at the hearing, the PSC
stated that Black Hills had presented evidence to support
each of the five statutory factors listed in Neb. Rev. Stat.
§ 66-1860 (Reissue 2018) to show that its proposal was in
the public interest. In contrast, the PSC stated that MUD had
presented “minimal evidence” to dispute that the factors were
met. Instead, the PSC stated, MUD’s argument was narrowly
focused on the 2010 order in Application No. P-0014 and
MUD’s contention that any consideration of the public inter-
est in the current application was foreclosed by the 2010 order
and the conclusive presumption under § 66-1863(3). The PSC
rejected MUD’s argument and stated that although there was
a conclusive presumption as to Application No. P-0014, the
presumption did not apply to Application No. P-12.32 which
was a separate and distinct application. The PSC stated that
Application No. P-0014 was closed on May 12, 2010, and that
Application No. P-12.32 was a new application for which new
evidence could be adduced.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813The PSC further rejected MUD’s argument that the PSC’s
approval of Application No. P-12.32 would amount to a revo-
cation of its order in Application No. P-0014. The PSC stated
that the action requested by Black Hills was not to revoke the
previous order, but instead was to expand or enlarge its serv­
ice area. The PSC stated it was required to consider the pres-
ent application based on “current public interest needs” and
that it was not “bound to inflexible limits of past practice.”
The PSC stated it would be a “curious state of affairs” if it
“could never revise any of its previous findings to better serve
the current public interest.” The PSC stated that its determina-
tion of the current public interest with regard to Application
No. P-12.32 would not revoke its order on Application No.
P-0014 and that the conclusions regarding “what was in the
public interest in 2010 remain untouched.” The PSC stated
that its task with regard to the current application was to
“decide what is in the public interest when Black Hills and
MUD are unable to reach an agreement as to their respective
service territories.”
The PSC then reviewed the evidence submitted in this mat-
ter, and it found that MUD had not met its burden of proof to
overcome the rebuttable presumption in favor of Black Hills.
The PSC stated that Black Hills had presented evidence on
each of the factors under § 66-1860, and it found that “none
of the factors set out [therein] weigh against Black Hills.”
The PSC noted MUD’s argument that granting the application
could disrupt the orderly development of natural gas infra-
structure as set forth in the maps in Application No. P-0014.
The PSC found, however, that the maps filed in 2010 were
no longer accurate because of significant changes that had
been made without notice to the PSC. The PSC also stated
that it was “unclear to what extent the parties themselves
relied on these maps in the past eleven years.” The PSC stated
that ruling on the current application based on “inaccurate,
outdated maps” would subvert its responsibility to deter-
mine the current public interest and would not contribute to
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813the orderly development of the natural gas infrastructure in
Sarpy County.
One commissioner dissented and generally reasoned that the
order in Application No. P-0014 was controlling and should be
respected in the interest of finality. The commissioner noted
that since 2010, both Black Hills and MUD had made exten-
sions and enlargements based on the conclusive presumption
that such actions were in the public interest based on the 2010
order. The commissioner reasoned that because the order in
Application No. P-0014 was final, the PSC should not have
engaged in a new analysis of public interest and no rebuttable
presumption in favor of Black Hills applied. The commissioner
further reasoned that even if the PSC could revoke the 2010
order, it should not do so because MUD was willing and able
to provide service to the area at issue, and that therefore, it was
not in the public interest to allow Black Hills to provide service
to the area. However, the majority of commissioners concluded
that the application was in the public interest, and the PSC
therefore approved Application No. P-12.32.
MUD appeals the PSC’s order approving Black Hills’
application.
ASSIGNMENTS OF ERROR
MUD generally claims that the PSC erred when it approved
Black Hills’ Application No. P-12.32. MUD specifically claims,
restated and renumbered, that the PSC erred when it (1) found
it had authority to determine what was in the public interest in
this case; (2) generally disregarded its May 12, 2010, order on
Application No. P-0014 and in particular disregarded (a) the
conclusive presumption under § 66-1863(3) that Application
No. P-0014 and the service areas set forth therein were in
the public interest, (b) provisions of Application No. P-0014
describing what was to happen in the event Black Hills and
MUD could not reach agreement on service areas, and (c)
the extent Black Hills and MUD had relied on the maps set
forth in the approved Application No. P-0014; and (3) found
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813that MUD did not overcome the rebuttable presumption under
§ 66-1861(2) that Black Hills’ Application No. P-12.32 was in
the public interest.
STANDARDS OF REVIEW
[1-3] Under Neb. Rev. Stat. § 75-136(2) (Reissue 2018),
an appellate court reviews an order of the PSC de novo on
the record. In a review de novo on the record, an appellate
court reappraises the evidence as presented by the record and
reaches its own independent conclusions concerning the mat-
ters at issue. In re Application No. OP-0003, 303 Neb. 872,
932 N.W.2d 653 (2019). When an appellate court makes a de
novo review, it does not mean that the court ignores the find-
ings of fact made by the agency and the fact that the agency
saw and heard the witnesses who appeared at its hearing. Id.Where the evidence is in conflict, an appellate court will con-
sider and may give weight to the fact that the agency hearing
examiner observed the witnesses and accepted one version of
the facts rather than another. Id.[4] The meaning and interpretation of statutes and regula-
tions are questions of law for which an appellate court has an
obligation to reach an independent conclusion irrespective of
the decision made by the court below. Id.ANALYSIS
MUD generally claims that the PSC erred when it approved
Black Hills’ Application No. P-12.32, and it sets forth vari-
ous 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813then 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 enlarge-
ment 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 jurisdic-
tional 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 stat-
utes: § 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 circum-
stances, a proposed enlargement or extension will be conclu-
sively 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 natu-
ral 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813determination 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 enlarge-
ment 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 jurisdic-
tional utility or metropolitan utilities district may pro-
ceed 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 sec-
tion 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 pub-
lic interest[.]
Section 66-1860 provides in relevant part:
No jurisdictional utility or metropolitan utilities dis-
trict 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:
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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 exist-
ing and future natural gas ratepayers of the metropolitan
utilities district or the jurisdictional utility;
(3) Whether the extension or enlargement contrib-
utes to the orderly development of natural gas utility
infrastructure;
(4) Whether the extension or enlargement will result
in duplicative or redundant natural gas utility infrastruc-
ture; 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 enlarge-
ment 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 “con-
clusively presumed to be in the public interest.” Instead, the
PSC was required to determine whether the proposed exten-
sion 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 author-
ity 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.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813PSC 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
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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 determina-
tion 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 deci-
sions.” 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 condi-
tions 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813Application of Union P. R. R. Co. as “demonstrat[ing] the time
frame reference of orders involving issues of public conve-
nience 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 stat-
ute 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 spe-
cific 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 adju-
dication 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813deemed” 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 ren-
dered 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 excep-
tion 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813terms agreed to by the utilities do not override the statutory
requirement for the PSC to determine the current public inter-
est 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 reli-
ance 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 inter-
est. 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.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813Considering 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 pre-
sumption was overcome by MUD. Although the 2010 order in
Application No. P-0014 did not preclude the PSC’s consider-
ation 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 deter-
mination of the public interest was properly focused on condi-
tions 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
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813MUD’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 agree-
ing 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 con-
trary 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 conclu-
sive 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.
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IN RE APP. NO. P-12.32 OF BLACK HILLS NEB. GAS
Cite as 311 Neb. 813CONCLUSION
We conclude that the PSC had authority to determine the pub-
lic interest with respect to the current application, Application
No. P-12.32, and that the PSC’s 2010 order in Application
No. P-0014 did not preclude the PSC’s consideration of the
public interest with respect to the current application. We
further conclude that the PSC did not err when it determined
that in light of all the evidence, including evidence related to
Application No. P-0014, MUD had not overcome the rebut-
table presumption that the proposed extension or enlargement
sought by Black Hills to extend service to the OPPD site at
168th Street and Fairview Road under Application No. P-12.32
was in the public interest. We therefore affirm the PSC’s order
approving Application No. P-12.32.
Affirmed.
Papik, J., not participating.