City of Lincoln v. Nebraska Public Power District

636 N.W.2d 645, 10 Neb. Ct. App. 713, 2001 Neb. App. LEXIS 275
CourtNebraska Court of Appeals
DecidedDecember 18, 2001
DocketA-00-421
StatusPublished
Cited by1 cases

This text of 636 N.W.2d 645 (City of Lincoln v. Nebraska Public Power District) is published on Counsel Stack Legal Research, covering Nebraska Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Lincoln v. Nebraska Public Power District, 636 N.W.2d 645, 10 Neb. Ct. App. 713, 2001 Neb. App. LEXIS 275 (Neb. Ct. App. 2001).

Opinion

Carlson, Judge.

INTRODUCTION

Nebraska Public Power District (NPPD) appeals from an order of the district court for Lancaster County granting a declaratory judgment in favor of the City of Lincoln, doing business as Lincoln Electric System (LES), and MidAmerican Energy Company (MEC). For the reasons set forth below, we affirm.

*715 BACKGROUND

This case is an appeal from a declaratory judgment action involving the Cooper Nuclear Station (Cooper). NPPD owns and operates Cooper, an electric utility system providing for the generation, transmission, and distribution of electric power to customers in Nebraska and elsewhere. NPPD is a public corporation and political subdivision of the State of Nebraska. MEC is a public utility corporation organized under the laws of Iowa. MEC provides electrical service to customers and communities in Iowa, South Dakota, and Illinois. LES is a municipal corporation created by and organized under the laws of Nebraska. LES operates an electric generation and distribution system pursuant to its home rule charter and municipal code.

LES and MEC receive certain percentages of Cooper’s electricity, 12.5 percent for LES and 50 percent for MEC. In exchange, LES and MEC pay corresponding, percentages of Cooper’s construction and operating costs.

In 1966, NPPD determined that it would need additional electric generating capacity to meet the needs of its customers. NPPD then determined that a nuclear power station with a capacity of approximately 800 megawatts would meet NPPD’s needs and create additional power for future sale. Similarly, by 1966, MEC, then known as Iowa Power and Light Company, had determined that it could use additional energy to serve its own customers.

Thus, in the summer of 1966, NPPD and MEC agreed that Cooper would be constructed. In 1967, NPPD and MEC entered into a long-term power sales contract in which NPPD and MEC agreed that MEC would receive 50 percent of Cooper’s electricity while paying 50 percent of the cost of Cooper’s construction and operation. The evidence shows that NPPD and MEC desired to enter into a partnership, but were unable to do so. The record shows that this is because a partnership between NPPD and MEC would negatively affect Cooper’s ability to obtain the necessary permits and approvals from the Nebraska Power Review Board. A partnership would also negatively impact Cooper’s ability to issue tax-exempt revenue bonds. In addition, there was some concern about MEC’s ability to own property under Nebraska law. Therefore, NPPD and MEC directed the attorneys *716 drawing up the contract to keep things as close as possible to a partnership concept, while making the contract legal.

The record shows that in 1968, NPPD entered into a similar power sales contract with LES. In that contract, NPPD agreed to sell LES approximately 12.5 percent of Cooper’s electricity, with LES paying 12.5 percent of Cooper’s costs of construction and operation. The history of the negotiations between LES and NPPD is not included in the record before us.

NPPD’s power sales contract with LES ends on September 22, 2003, and NPPD’s power sales contract with MEC terminates on September 21, 2004. Because the power sales contracts between NPPD and MEC, and NPPD and LES are essentially identical, we will hereinafter refer to the power sales contracts collectively as the contracts.

This case is centered around two sections of the parties’ contracts, sections 13 and 15. Section 13 of the contracts requires NPPD to make available to LES and MEC “[a]ll operating and financial records and reports” relating to Cooper and states that “[t]he Purchaser’s [LES and MEC] representative[s] shall at all reasonable times be given reasonable access to the Nuclear Facility and the records and reports” referred to above. Section 15 also requires that NPPD “confer with [LES and MEC] at all reasonable times when requested by [LES and MEC] and to give good faith consideration to [LES’ and MEC’s] reasonable recommendations in regard to operating practices of [NPPD] as related to [Cooper].”

From the beginning of Cooper’s operation in 1974 until the mid-1990’s, it appears that LES’ and MEC’s access to Cooper’s operating and financial records and reports in addition to LES’ and MEC’s access to Cooper itself were not contested issues. The record shows that in the early to mid-1990’s, issues began to arise under the contracts. In 1993, Cooper experienced an extended outage. Additionally, Cooper was shut down from May 1994 until February 1995 after the Nuclear Regulatory Commission found Cooper to be in violation of the commission’s standards. As a result, LES and MEC began requesting more information about and greater access to Cooper. Additionally, LES and MEC filed suit against NPPD because of the financial costs to LES and MEC due to Cooper’s shutdown.

*717 In October 1998, NPPD issued a document entitled “PCM-01,” its stated purpose being “to better assure that the Parties consistently observe the provisions of the Contracts.” In section 6.0 of PCM-01, NPPD states:

The District has often provided the Participants with information and access not required by the Contracts. . . . [W]hile the District will continue to provide the Participants with information and access as required by the Contracts, and may provide additional information or access, the District will not at any time be required to provide a Participant with information or access that is not required by the Contracts, even if similar information or access has been provided in the past.

Specifically, PCM-01 provides that from then on, NPPD would only provide LES and MEC with certain information through an NPPD employee with the title of project manager. Specifically, PCM-01 contains the following provisions:

6.1 Information to be provided to MEC and LES.
6.1.1 Participants will be advised that requests for information concerning CNS [Cooper] or the Contracts will be made in writing and sent to (or a copy provided to) the Project Manager. . ..
6.1.4 Information regarding District non-nuclear activities will not be provided under this procedure.
6.1.5 Information provided to the Participants will not include discussion of business proprietary, privileged or other confidential information of the District.
6.1.6 Information provided will not include draft information unless the District is requesting specific input or comment from the Participants on draft information.
6.1.7 The District will not analyze, manipulate, prepare data in specific reporting formats, or otherwise expend resources to present data in a manner other than that in which it is generally available for the specific use of the Participants.

Paragraph 6.2 of PCM-01, entitled “Site Access.” contains the following relevant provisions:

*718 6.2.2 MEC and LES representatives will not be allowed unescorted access to the facilities described above.

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636 N.W.2d 645, 10 Neb. Ct. App. 713, 2001 Neb. App. LEXIS 275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-lincoln-v-nebraska-public-power-district-nebctapp-2001.