Four Nebraska municipalities and a utility have filed suit to block a Nebraska Public Power District rate plan that would give a rate break to companies that sign a new contract with NPPD.

Wayne, Wakefield, South Sioux City and Valentine joined with Northeast Nebraska Public Power District in challenging a rate plan that would increase rates only 0.6 percent next year for wholesale power customers that sign a new 20-year contract with NPPD — and 3.8 percent for those that don’t.

The lawsuit, filed in Wayne County District Court, had been expected. Wayne, Wakefield, South Sioux City and Northeast Nebraska Public Power District had long before indicated they did not plan to sign the new contract, choosing to get all their power from utilities out of state after 2021, after the current NPPD contract expires.

The suit says the rate plan is intended to “unfairly punish’’ customers who decide to go elsewhere for future power while simultaneously coercing customers to sign new long-term contracts. The suit asks the court to block the rate plan, direct NPPD to set rates for 2016 that are equal for all customers, force the utility to refund any overcharges and award damages.

NPPD has defended its rate plan, saying it makes sure all current customers pay their fair share of some $150 million in unfunded retiree health care costs. Companies that sign new contracts would pay a lesser amount in 2016 because they will be paying their share of those costs over the long haul.

“Nebraska Public Power District strongly believes that our wholesale rates set for 2016 are fair, reasonable and nondiscriminatory,” said NPPD spokesman Mark Becker.

Most of NPPD’s 76 wholesale customers have decided to sign new long-term contracts with the utility.

Contact the writer: 402-444-1130, henry.cordes@owh.com

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