City, MEAN dispute going to state supreme court

City of Sidney's dispute with energy-provider MEAN (Municipal Energy Agency of Nebraska) is going to the state supreme court, J. Leef, city attorney, informed the city council on Nov. 24.

"This is not something that often comes up," Leef remarked.

The city's dispute with MEAN is over increased transmission rates.

Ed Sadler, city manager, said these increases will cost Sidney taxpayers hundreds of thousands of dollars per year.

"We had an agreement," Sadler said. "You pay for two things. You're paying for energy and transmission. It's got to get to you somehow."

MEAN, however, changed this agreement.

"They were supposed to notify us by our contract and get our permission to do this. They did not," Sadler said. "In simple terms, the net difference is hundreds of thousands of dollars of years."

The city argues there is "no reason the original transmission agreement had to stop."

"They're supposed to be looking out for 'my' best interests. 'I' am one of their customers," he said. "We think they should have consulted with us. There's no reason Sidney should have incurred this additional cost. And so, we're fighting it."

This summer, Sidney won the dispute through arbitration "overwhelmingly."

"MEAN is appealing that, because now they're into this deal and if we don't pay for it, guess who has to pay for it," Sadler said.

While the agreement is in dispute, the money is being held in an escrow account.

Nebraska uses all public power.

"There are no private power companies. We may buy our power from public companies, like Basin (Electric Power Co-operative)," Sadler said. "It was meant to make sure everybody in Nebraska got power."

The implications for this town "are huge," Sadler said.

"When you're taking several hundred thousand dollars and dividing it over three thousand some odd customers, that's a big expense for a long period of time, because these contracts are very long," he said.

The system for purchasing power benefits cities otherwise.

"You don't want to buy on the open market because depending on what time of day you buy, you could be paying $5 per megawatt or $125," Sadler said. "It's that kind of difference, because during peak time everybody wants it so it's very valuable, but at three o'clock in the morning? You've got your alarm clock running and the refrigerator is kicking in once in a while."

Because it is a long-term contract, Sadler said, the implications for the city of such a charge are also long-term.

"Did they have to get rid of the agreement we had that provided us power very cheaply or not? Were they watching out for our best interests or not?" he said. "We think not. They think they are. That's the whole discussion. It means big money for this place."

He added, "Why would I pay hundred of thousands of dollars to get it from there to here?"

The dispute is expected to go before the state supreme court in January.