Electricity bills are going up here in Wahoo, where it is 104 in the shade and windy on an August afternoon. They havent gone up enough yet to bother Mildred Sudik, who has lived in one house or across the street from it all of her 90 years, but then they were pretty low to begin with.
Yet prices for power in Nebraska are starting to rise faster than the national average, and they aren't supposed to do that because all the electricity here is publicly owned. This is the only state in the union other than Alaska where voters and their elected officials have taken over a task that some people say government everywhere ought to assume: the control of all electricity sold.
Like most Nebraskans, Mildred Sudik has grown up taking cheap power for granted, assuming that any problems with the electric company were simple errors that a chat with the town council member down the block would solve. In Wahoo, population 3,850, the utility is still so close to its customers that it offers discount rates to those who put up special Christmas lights.
Consumer advocates say public power was designed to provide that kind of responsiveness, the kind of relevance to need they say callous big business investor-owned utilities have no interest in providing.
But in Nebraska, where there has been 100 percent public power since 1946, the modern energy era has brought massively complex issues and new management structures into the equation. Public power here is no one's panacea anymore.
"The bottom line evaluation of public power has got to be rates that are lower," said Rosemary Skrupa, a member of the Omaha Public Power District board of directors. "You've got to run the thing as though stockholders owned it and were standing over you with an axe . . . when prices start rising, that's when it commences to be a big concern to me."
In 1970, Nebraska's rates were the fourth lowest in the country for residential customers of 250 kilowatt hours per month, surpassed only by states with large quantities of cheap hydropower. Equally low industrial rates helped attract some industry, and things seemed to be running on a businesslike basis.
But recently that situation changed. Nebraska's ranking dropped to 12th in 1973 and to 26th in the list of low-priced states last year, when rates rose an average of 16 percent, according to a legislative staff memorandum. Government Financing
NEBRASKA owed its cheaper power to the financing advantage shared by all government units, the ability of each town or power district to issue low-interest municipal bonds. The Omaha district obtained $600 million to finance construction this way last year, for example, the largest such bond offering in the country, and the difference between the 6 percent interest Omaha must pay and the 8 percent a privately owned utility would have to pay means Omaha consumers saved about $12 million.
In addition, rural electric cooperatives in Nebraska get cheap government loans, and all publicly owned utilities have first claim on any federally produced hydropower, the cheapest energy source there is in the long run. This has caused some annouance among private firms.
"All the people pay to build a dam, but this practice confines its benefits to [the] 22 percent of the people" who are served by public power, said Ed Frye, who manages special projects for the private industry's trade association, the Edison Electric Institute.
There is considerable argument over whether the income and property taxes private utilities pay are less or more than the payments in lieu of taxes which publicly owned companies make to their communities. The debate is complex, turning on accounting methods and tax deferral reckonings, and many experts call it a draw. All fuel and other costs such as labor and materials being more or less equal, the remaining financial advantages should bring voter-run utilities in under the prices of most private firms.
With all prices rising nationwide, the American Public Power Association reports a wave of interest in its pamphlets that tell a community how to take over the local power company. Campaigns to do just that are under way in dozens of places, especially in New York state. There are 2,228 publicly owned electric utilities nationwide, some in every state except Hawaii.
Like the seven in Maryland and the 17 in Virginia, most are small. The Los Angeles Department of Water and Power is the largest, with 1.2 million customers, more than the entire 1.1 million population of Nebraska, where there are 393 public power companies. Together the systems produce 13 percent of America's electricity; the rest comes from 256 privately owned "public utilities" like Consolidated Edison of New York and Virginia Electric and Power Co.
Most of the voter-run units are concentrated in the Mid-west, where they began in earnest as a by-product of irrigation projects for the Dust Bowl in the 1930s. They include tiny rural electric cooperatives and municipal companies like Wahoo's which buy all or part of their power wholesale from large public power districts like the Nebraska Public Power District, which blankets most of the state. The Red Tape Argument
PRIVATE INDUSTRY has typically argued that public power means bureaucratic red tape and inefficiency. "With government in as high a disregard as it now is, I would not want to have to promote more government," conceded Marty Rogol, a former consumer lobbyist on energy matters in Washington.
"The big utilities say, "Well, if you want something like the Post Office running your electricity . . . and that always quiets the crowd down immediately."
Nebraska electric bills are free of any state regulation on the theory that a state regulatory commission would only put distance between the voters and the results. If low rates are beginning to slip upward, the theory is that irate voters can force management through elected boards of directors to be efficient on pain of losing their jobs.
"Public power is controlled by the political process, and that is regulation, friends, even if it's not called a state regulatory commission," said the American Public Power Association's J.D. Brown. That view is echoed here at every level.
But State Sen. Richard Lewis of Holbrook, a self-described lone voice crying for some kind of state oversight on rates, said it hasn't always worked that way. His staff found rates in selected Kansas, New Mexico and Missouri towns with private owner "somewhere near" rates in comparable Nebraska communities, he said. "There's something wrong somewhere if investor-owned utilities can pay stockholder dividends and taxes and [higher] bond rates and still be competitive," he said.
Regulatory issues have become so massively complex, he argued, that very few board members or council members, not to mention ordinary citizens, have the time or energy to do much other than abandon the field to professional utility managers.
And although it would seem logical that managers of publicly run firms might have a more consumer-oriented view than managers beholden to faraway stockholders, consumer advocates here insist that is not the case.
"Grow, grow, grow, build, build, build - it's Chamber of Commerce thinking and it leads to exaggeration," said Mary Alice Race, an outspoken senior citizen who at 69 is running for a seat on the Omaha board in November.
Managers and engineers here come from the same universities as those that supply private firms. They frequently exchange jobs, belong to the same professional organizations and mailing lists and are in constant touch over national power flows and possible joint projects across state lines.
"In the old days we fought like cats and dogs," recalled Durwood W. Hill, who, as general manager of the Nebraska Public Power District, is widely regarded as among the most powerful people in the state. The NPPD controls the bulk of Nebraska power, wholesaling it to nearly all the municipal and rural systems. "Now I deal as much if not more with investor-owned utilities [outside Nebraska] as with publicly owned ones." Building Programs
THERE IS NONE of the financial incentive to keep building power plants here that East Coast consumer activists blame for what they insist is unnecessary construction by private companies. There are no tax or dividend advantages that can be maintained with ever-increasing investments; rate hikes to finance construction "only mean more grief from the voters," noted Lincoln Electric System's Harold Simmons.
Yet the main districts maintain substantial building programs, citing the same 5 to 6 percent annual growth in demand that their counterparts predict nationwide. Critics here, as elsewhere, insist demand is falling off and the building should slow down.
They also complain that a spirit of innovation one might expect from voter-run operations is lacking here. A state-run program to promote the use of grain alcohol as a fuel was prompted by Nebraska farmers, not its utilities; the public power association boasts of widespread experimentation among its members in rate restructuring, solar and other alternative energy forms, but such programs are minimal in Nebraska.
All these matters are highly technical and the utilities marshal impressive statistics to back their views. "It took me four months [on a citizens' advisory commission] before I could talk to those [management] guys on a toe-to-toe basis" about demand and rates and other matters, recalled Bill Lock, staff aide to a state legislative committee on rate review.
Sen. Lewis complained that NPPD resistance thwarted two previous attempts by hired consultants to obtain detailed information on the way prices are figured, and Lincoln Mayor Helen Boosalis agreed there was a possibility that aggressive managers might intimidate their elected boards into rubber-stamp operations.
"We insist we be kept fully informed . . . if management runs roughshod over a board it's because the board members let 'em and can't be bothered to do their jobs," she said.
The managers see their jobs differently. "The board directs management, so that proposals should reflect the desires of the board and should be approved," reasoned Omaha Public Power District general manager Ralph Shaw. Constant conflict, he said, would mean that management is not doing its job of understanding and responding to the board's wishes.
In essence, the consumer activists' complaint is that professional utility managers seem to think pretty much alike whether they work for stockholders or voters. And while activists find the interests of stockholders relatively simple to define (more money), they find the interests of voters rather more difficult to fathom, to articulate and, finally, to shape. The battles can go either way. The Nuclear Issue
A PROPOSED third nuclear power plant, to be built near Omaha and called Calhoun II, fired the usual pro-nuclear and anti-nuclear controversy from the moment it was initiated in 1974, when the Omaha board favored it, 7 to 0. Management of both the Omaha district and the NPPD boosted their joint project enthusiastically, offering a 20 percent share to the Lincoln Electric System that serves the capital.
After a stormy debate by the Lincoln City Council and two hard-fought elections to the Omaha system's board, however, Lincoln declined to participate and the Omaha board voted, 4 to 3, last February to kill the project. NPPD and some of the power plant contractors are now suing the Omaha district, but the episode was hailed as a major victory by anti-nuclear forces and as an example of public control in action.
"It was the numbers," said Omaha board member Skrupa, who voted against the project. "We were convinced it would just have been too expensive . . . I'm still basically pro-nuclear."
Industry officials saw the vote as an example of the way "a few fanatics representing a minority position can stampede the political process" to override sound management planning, as one of them put it.
In another case, a group of citizens noisily demanded a restructuring of Omaha's electric rates so as to give price breaks of low-income residents and put a heavier bite on industry and agribusiness. The Omaha management set up a 21-member citizens' study-advisory commission which looked into rate structures for several months. It emerged with a majority recommendation to keep the system as it was, with no special breaks for the poor.
This outcome pleased the industry by endorsing its longstanding view that costs of service, which are lower for big-volume users, must determine the price charged. But consumerists said the utility stacked the commission and carefully screened the information it received. "It was the finest brainwashing job I ever saw," said Mary Alice Race. Fights Can Be Nasty
THE POINT IS clear for both sides: Voters are an unpredictable lot. Swaying a democratic system is a messy, difficult business, and when the system is as large and as sprawling as the NPPD, the fights can get really nasty.
Critics argue that the district is too diffuse for the elected board to have any sense of local battles or any real control over management. "Arrogant, that's the word I'd use," said Asa A. Christensen, a Lincoln attorney representing a group of farmers opposing an NPPD power line route plan.
A group of municipal companies organized the Nebraska Municipal Power Pool in late 1975 to try to face NPPD as a united front in negotiating wholesale rates, with mixed results. "It's better than a private system in that if you can prove on paper they're doing something wrong, you can usually get them to move off dead center," said power pool director Steve Wacker.
But NPPD and the Lincoln Electric System have been involved in a lawsuit over wholesale rates for nearly five years, with no end in sight, and NPPD's lobby in the unicameral state legislature was strong enough to deprive the power pool of requested authority to issue revenue bonds itself.
Such suits are rarer here than they are in some states where private power predominates because the informal grievance procedures generally work, according to Robert White, assistant general manager of the Loup River Public Power District. "We just pick up the phone," he said.
When that doesn't work, however, the next election is the only recourse. "I've been going to [Omaha Public Power District] board meetings for four years and often I'm the only member of the public there," lamented Mary Alice Race. "That's the problem . . . these boards are governments but not enough people show up to treat them that way, so as a result they sometimes don't act that way."
State Sen. Steve Fowler, a prominent activist on energy matters here, summed it up. "In all, I'd rather fight a public agency than a private one," he said, "but you can't just convert to public and walk away from it. It takes a lot of work."