Gwen Kautz
General Manager
It’s time to update you on the possible merger between Dawson Public Power District and The Central Nebraska Public Power and Irrigation District. February was a busy month and an important milestone in the process.
The districts held a joint board meeting in Kearney to discuss Phase 2 of the merger study. There’s a projected overall savings of $11.7 million over seven years if the companies consolidate. The savings come from Dawson PPD’s ability to use almost 20 megawatts of power from Central’s Jeffrey Hydro, efficiencies, realignment, and reduction of workforce through natural attrition as employees retire.
The meeting gave directors an opportunity to ask questions and talk with representatives from the other district. We invited a lawyer to explain Nebraska’s consolidation process according to public power statutes. The Nebraska Power Review Board Executive Director Tim Texel outlined the review process for merger documents.
Each board met individually on Monday, February 7. The board presidents, Pat Hecox of Dawson PPD and Dave Rowe of Central, called for a vote about continuing the consolidation study. By voting in their own regular meetings, the directors had an opportunity to cast their ballot without pressure or influence from the other board’s vote. Both boards chose to continue the consolidation study.
As I reflect on February’s events, it is important that directors not only look at the significant savings for our customers, but also at the subjective values a merger could provide. More of these will be shown in the study’s third phase.
Board representation and governance are two of the biggest questions to answer as we go forward. Currently, Central has a 12-seat board and Dawson PPD has an 11-seat board. A new entity needs to ensure that customers and stakeholders are well represented. Decisions also need to be made about the business model and the new district’s name.
A friend compared the merger to housing construction – building either a single-family home or a duplex. There’s greater benefit if the new entity is a fully integrated, single business rather than two entities co-existing under one name. The next steps will take study, negotiation, creativity, and hard work. We are up for that challenge.
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