January 2000 – Times have changed and with them York County Rural Public Power District changed it’s name. Effective in January, the District became Perennial Public Power District. Why the change? There are a number of reasons. According to Jamey Pankoke, General Manager of the District, the electric industry is in a time of drastic change. “We may soon be facing the challenge of a new era of competition in a deregulated environment. Acting now to establish a strong, unified presence in the marketplace will help prepare us to be competitive. Additionally we soon will be offering a wide array of new services and innovative ways of doing business with us. This new approach to our business demanded a new way to present ourselves to our customers.” Pankoke went on to say that another reason for the name change is that the old name did not accurately reflect the District’s service area. “In addition to York County, the District had served Fillmore County for decades, and also recently started serving Exeter, Gresham, Henderson, McCool Junction, Milligan, Ohiowa and Waco. The old name – referring to “York County” and “Rural” – simply did not describe us anymore. With the assistance of a marketing communications firm, the District chose the name Perennial because it best conveys the position that the District has adopted as it gets ready for competition. “Perennial means lasting indefinitely, or perpetual. We believe it succinctly summarizes the message that we want to communicate as we prepare to operate in a competitive environment. We want people to understand that they can have confidence in the District being here to take care of all their service needs. Customers can remain confident that the lights will come on when they flip the switch, and they will have the power that they need to keep their businesses and farms running with no downtime,” Pankoke said. “We want our customers to know that if a problem does arise, we’ll be there to fix it quickly and accurately,” he added. Pankoke concluded by saying, “even though the name has changed, our commitment to customers has not.” In conjunction with the new name, the District adopted a tagline of Energy For Generations.
October 2000 Deregulate Electricity? Be Wary
By John McClure – The writer is vice president of government affairs for Nebraska Public Power District
Deregulation of the electric industry has created a crisis in California. While this issue has received limited local attention, the recent dramatic failures of retail electric competition in California have caused policy-makers throughout the nation to question the merits of electric deregulation.
Complete electric deregulation – where people get to pick their energy supplier for their homes, churches, schools, businesses and factories – is currently the law in a handful of states and will be phased in over the next few years in about half of the United States. Like other service-sector-industry deregulation, electric deregulation has been promoted with promises of lower rates, increased reliability and innovative services.
In response to the California crisis, a recent report to California Gov. Gray Davis from the California Public Utilities Commission noted that prices in San Diego have increased 270 percent since last year and that rolling blackouts and threats of rolling blackouts have been at an all-time high. So much for lower rates and better service.
Perhaps the most frightening statement in the report is the conclusion that “the State of California no longer possesses the tools to ensure its citizens can procure reliable electric service at reasonable prices.”
The situation has now deteriorated to the point where California State Sen. Steve Peace – the author of the California deregulation law – has publicly called on his fellow citizens to practice “economic disobedience.” Peace says that “The power generators need to see consumer reaction, and the best price signal consumers can send them is, ‘I won’t pay your bill.’”
California is not alone, although its situation is the most extreme. Industries in several deregulated states have been forced to shut down due to dramatic increases in the price of electricity, and electric customers are seeing the promises of retail competition ring hollow. In New York, June electric bills were up 43 percent in the new deregulated market.
The price spikes in the California power markets are now spilling over and causing problems in markets in nearby states. In mid-June, Kaiser Aluminum Corp. laid off 400 workers in Spokane and Tacoma, Wash. In announcing the layoffs, Kaiser complained that electric power costs were spiraling skyward and were now “at levels never before experienced in this region.”
In Montana, another state that moved quickly to deregulation, the state’s largest power company, Montana Power, sold its electric generation assets. Customers are no longer dependent on the local utility to provide reasonably priced electricity. The new electricity markets in Montana were so distorted this summer that one of the state’s major mining companies shut down some of its operations and laid off employees because the firm could not afford to purchase electricity.
Affordable and reliable electricity is a basic necessity. Once again, we can be thankful we live in Nebraska, where the Legislature has carefully considered retail electric deregulation and said “no thanks” for now.
In 1996, the Nebraska Legislature’s Natural Resources Committee, chaired by State Sen. Chris Beutler and subsequently by Sen. Ed Schrock, began a three-year study to look at the electric industry in light of significant changes throughout the nation. The study concluded that Nebraska should not rush into retail competition in the electric industry, since Nebraska’s present public power system has produced rates placing it among the 10 lowest-cost states in the nation.
In addition, the study recommended that retail competition would not benefit Nebraska’s electric consumers and should not occur until and unless the regional wholesale market and transmission system are adequate to support retail competition.
Nebraska’s state and federal elected officials have displayed a unified, bipartisan effort to protect the electric consumer in Nebraska. Both Gov. Mike Johanns and former Gov. Ben Nelson have provided leadership in the Governor’s Public Power Alliance, which seeks to protect Nebraska’s electric consumers and other public power customers.
In addition, Sens. Bob Kerrey and Chuck Hagel and Congressman Doug Bereueter, Bill Barrett, and Lee Terry have co-sponsored legislation to address tax issues arising from electric deregulation and have been skeptical of changes that would undermine the state’s unique public power structure. Congressman Barrett convened a House Subcommittee hearing last year to focus on potentially adverse impacts of electric deregulation on rural areas.
Our elected officials have demonstrated a basic Nebraska trait – good common sense – in dealing with this issue. While states like California are in crisis, we can be thankful that Nebraska’s approach is to protect the customer and improve what we have, not destroy it.
December 2000 – Consider Change Carefully
In Nebraska, we have a great thing going with our locally owned public power systems. You may not be aware, but Nebraska is the only state in America that is totally served by a power system that is owned by the residents and delivers electricity as a nonprofit service. Our public power system represents billions of dollars of investment in our state and provides electricity at some of the lowest rates in the nation.
Change could be on the horizon however, because of a law passed by the U.S. Congress. The Federal Energy Policy Act, passed in 1992 allowed for competition in the electric utility industry. States throughout the nation are in different stages of deregulation with some implementing changes, others conducting studies, and some choosing not to do anything. To get a better understanding of the impacts that change could bring to our state, the Legislature conducted a three-year study which concluded in late 1999.
L.R. 455, as the study was known, examined how Nebraska would compete in a deregulated environment. It included participants from the electric utility industry, State Senators, and others knowledgeable about the economic impacts of deregulation. The study recommended a two-phase approach, and concluded that Nebraska should adhere to a condition-certain timeline instead of setting a date for deregulation to occur. Nebraska, they concluded faces a very different set of circumstances from other states since electric rates in Nebraska are some of the lowest in the nation.
During the 2000 Legislative session, the Unicameral passed Legislative Bill 901 that implemented some of the study recommendations. This law directs the Nebraska Power Review Board to monitor the deregulation issues and report annually to the Legislature and the Governor regarding the status of the state’s electric system.
Many factors contribute to the success of the public power system in Nebraska but local control is the key ingredient. Governance is divided into municipal systems, public power districts, and rural electric cooperatives. These boards act on behalf of the public and set rates, budgets, and oversee quality of service. No other state makes that kind of local commitment to providing an essential service to its’ residents. For more than 70 years, public power has served Nebraska well. In the future Nebraska may begin to see for profit companies offer public power customers an alternative. We believe that when deregulation occurs, public power will compare favorably with investor owned utilities. Public power customers can also rest assured that we will continue to focus on the best interests of the entire state and provide a return on your investment in the form of low cost, reliable electricity.
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