OMAHA, Neb. (AP) — An Omaha energy developer has withdrawn its application to build a natural gas-fired power plant in Nebraska.

Bluestem Energy Solutions had submitted an application to the state to plan, build and operate a 38-megawatt plant and then sell electricity to Beatrice, a city in southeast Nebraska. The company recently withdrew its permit application from the Nebraska Power Review Board, the Omaha World-Herald reported .

Beatrice still plans to purchase electricity from the new plant, even though it won't be built in the state.

The Omaha Public Power District and Nebraska Public Power District told the board last year that state law prohibits private entities from building power plants in Nebraska that would serve residents. Nebraska is a 100 percent public-power state.

The utilities also argued they already own more electric generation than they need and that allowing another plant would result in "unnecessary duplication of facilities."

Officials with Bluestem and the city of Beatrice said they disagreed with the utilities.

Beatrice attempted to get cost-saving proposals from the utilities that already own generation in Nebraska. But with the new gas plant, the city hoped to reach a better deal for its customers than under its existing contract with Nebraska Public Power District.

City officials decided to break with the utility after negotiations in which the company refused to include price guarantees in a long-term contract.

The $38.5 million plant will now be built elsewhere in the Southwest Power Pool's 14-state territory. The power pool operates the regional electric grid and wholesale market in which electricity producers buy and sell power.

Beatrice City Administrator Tobias Tempelmeyer said the city would save 10 percent on its energy costs by purchasing power from the proposed plant. Details are still unclear on where the plant's new location will be and how competitive it will be with Beatrice's first site choice.

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Information from: Omaha World-Herald, http://www.omaha.com