NPPD's retirement plan says Wells Fargo misled it about the risks associated with a securities lending investment program.
Nebraska Public Power District sued the San Francisco-based bank for $1.5 million.
The lawsuit was moved from Nebraska courts to federal court this month.
NPPD says Wells Fargo marketed its securities lending program as a conservative option for the retirement funds of 2,400 people. But instead of the $140,000 in additional returns the bank projected, NPPD's retirement fund lost money.
Wells Fargo filed a petition to move the lawsuit to federal court, but it hasn't responded directly to NPPD's allegations. The bank has until Dec. 10 to reply in court.
NPPD opted out of a class-action lawsuit investors filed against Wells Fargo over its securities lending program.