(CN) - Nebraska's attorney general on Thursday pushed back on the Omaha Public Power District's plan to shutter 40% of its energy generation ability, saying it violated state policy.
Attorney General Mike Hilgers filed suit in state court over the district's decision to eliminate the North Omaha Station's use of coal for fuel. He argues the move violates the Legislature's two dictates for energy producers: reliability and affordability.
Hilgers asks a judge in the suit to permanently stop the district from taking any action that doesn't prioritize the reliability and affordability of energy, as well as declare the district's board of directors as having breached its fiduciary duty.
"Energy is one of the most important resources we have," Hilgers said during a press conference. "In Nebraska, we've been blessed with low-energy costs."
The district said last year it was committed to net-zero carbon emissions by 2050, adding reductions reached 40.6% from 2013 to 2023. It also noted its plan to retire three gas units at its North Omaha Station and transition two coal units to gas by 2027.
Hilgers pointed to the district's environmental justice concerns and desire to become net-zero, saying many places in the nation have abandoned that goal.
Regardless of someone's belief about environmental justice, Hilgers said it has no relation to the reliability and affordability of energy.
The attorney general also cast aside arguments that that power plant hampers air quality.
"I just want to be clear - that is not true," he said, adding that metrics show the quality is good.
According to Hilgers' office, keeping the status quo would save the district over $40 million over the next five years and some $440 million over the next 15 years. It argued those savings could go toward stabilizing rates or to consumers.
Hilgers said he had no desire to micromanage the district's operations, adding that it's not restricted from reducing emissions or particulate matter. The problem is when those goals interfere with the Legislature's policy demands.
"When you elevate those issues over reliability or over affordability ... that is a violation," he added. "That is directly contradictory to the policy set out by the Nebraska Legislature."
Nebraska is the only state with no investor-owned electricity utilities. It has over 160 public utilities that generate and distribute electricity to state residents.
The Omaha Public Power District is the 12th-largest public utility in the nation. It serves almost 900,000 people in 13 counties and has a 5,000-square-mile service area.
Hilgers in his suit says that the state's commitment to public power has enabled low electricity costs to become a feature of life.
Without adding more capacity, coupled with a higher demand for electricity, the district will face deficiencies in providing enough energy over the next decade, Hilgers argues.
"The proposed elimination of coal-fired generation capacity at North Omaha Station and retirement of three of its five generation units will significantly decrease the supply of dispatchable baseload generation necessary to ensure both price stability and the reliability of the supply of electricity to the customers [the district] serves," Hilgers says in the suit.
That means the district is contravening state policy. As a public utility, its actions prioritizing goals other than reliability and affordability are null and void, Hilgers says.
Additionally, by taking action over "environmental considerations," the board of directors has breached its fiduciary duty to provide economical, reliable and adequate electric power to its customers, the attorney general adds.
"Those are the rules of the road," Hilgers said.
A representative for the utility district declined comment about the pending litigation.
Source: Courthouse News Service
