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Minutes

Note: These minutes are in draft form pending approval by the Board at its next public meeting.

NEBRASKAPOWER REVIEW BOARD

Minutes of the 785th Meeting

July 28, 2017

The 785th meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the Liquor Control Commission hearing room, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The roll was called and present were Chairman Reida, Vice Chairman Morehouse, Mr. Grennan, and Mr. Moen. Mr. Hutchison had informed the staff a month or two ago that he had a previously scheduled surgical procedure that prevented his attendance at the meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on July 18, 2017. All background materials for the agenda items to be acted on had been provided to all Board members prior to the meeting and a copy was in each Board member’s notebook. The executive director announced that a copy of the Nebraska Open Meetings Act was on display on the north wall of the room for the public to review, and another copy was available in a three-ring binder on a table at the back of the room. A copy of all materials that the Board would consider was available for public inspection on a table in the back of the room, as well as extra copies of the agenda.

The Board first considered the draft minutes from its June 23, 2017, meeting. The staff did not have any recommended changes. Chairman Reida abstained from voting because he was absent at the last meeting. Vice Chairman Morehouse moved to approve the minutes. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – abstain, Vice Chairman Morehouse – yes, Mr. Grennan—yes, Mr. Hutchison—absent, and Mr. Moen—yes. The motion carried 3– 0 with one absent and one abstaining.

The next agenda item was acceptance of the expense report for the month of June. The expenses were $21,415.14 in personal services, $16,063.10 in operating expenses, and the travel expenses actual $1,138.47. The actual expenses for the month were $38,616.71. Due to the reimbursements in travel expenses the travel expenses due not show actual expense numbers. Mr. Texel explained that Mr. Grennan received a reimbursement of $591.75. The net difference of $546.72 is shown on your budget status report. Vice Chairman Morehouse moved to accept the expense report for May. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—yes, Mr. Hutchison—absent, and Mr. Moen—yes. The motion carried 4– 0 with two absent.

The next item on the agenda was to consider SAA 318-17-A. This is a joint application filed by the City of Wahoo and the Butler Public Power District to amend retail service area agreement 318. The application was filed on June 22, 2017. The application requests to transfer territory from Butler PPD to Wahoo. The amendment is not based on an annexation. Exhibit A is a map that shows the territory to be transferred. Due to the fact that the boundary follows a curved path through a couple of sections, the staff had asked for a metes and bounds description of the boundary location. The parties responded that there is no metes and bounds description of the boundary. The Board members noted that the new boundary follows the new Highway 77 bypass on the Northwest side of Wahoo. The Board members expressed concern about exactly where the boundary is located. The Board also wanted to know if the boundary in sections 32 and 33 west of Wahoo is intended to be the north-south midpoint or half-section line. The Board members asked if the new boundary would be the middle of Highway 77, or on the north or south side of the highway. Executive Director Texel said nothing in the file addresses that point, but he has always assumed when a boundary line follows a road or waterway, the parties intend the boundary to be the middle of the roadway, river, etc. The Board considered not approving the application until an exact description of the location was provided, but decided instead to take action on the application today, but have the parties provide a written clarification of where the boundary is located. The Board asked the executive director to send a letter with the approval order asking both parties to provide the Board with written clarification stating the parties’ intent regarding the location of the boundary line in relation to Highway 77. Mr. Grennan moved to approve application SAA 318-17-A, but the staff will request the parties to provide clarification regarding the exact location of the boundary line. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—yes, Mr. Hutchison—absent, and Mr. Moen—yes. The motion carried 4– 0 with one absent.

The next item on the agenda was the executive director’s report. The first item discussed was an update on Southwest Power Pool (SPP) activities. Mr. Grennan discussed the most recent SPP and Regional State Committee (RSC) meetings. He stated that he had a handout that was provided to the RSC members at the RSC Retreat. He would gladly share the electronic version. If anyone wanted it he could send it to the executive director to be forwarded to the other Board members.

The executive director informed the Board about an update to the Board’s website. Nebraska Interactive provides assistance with the website updates and general maintenance for the Board’s website. They are designated by the Secretary of State’s office as the entity that provides this service to agencies without their own information technology personnel. The Board currently uses Amaya software to update the website, which was installed many years ago by Nebraska Interactive. Nebraska Interactive informed the staff that the PRB is now the only agency that uses Amaya, and it is no longer supported. In fact, the staff at Nebraska Interactive is no longer familiar with the Amaya system. When the PRB staff installed their new computers, there was an issue with Amaya. The staff lost its ability to update the website and had to pay Nebraska Interactive to load the updates. Nebraska Interactive proposed to update the Board’s website for a cost of approximately $6,000. They would not be able to start on the project until January or February 2018. There will also be an annual fee for the maintenance service. The Office of the Chief Information Officer had someone check the Board’s computers and provided a temporary fix to the Amaya issue, but if the problem recurs the staff will likely once again lose the ability to make any changes to the agency’s website. This will be an upcoming expense but there is no action required by the Board. The executive director just wanted the Board to be aware of the situation. Executive Director Texel stated that Nebraska Interactive provided him a with a draft scope of work for the website update project, which will include updating the PRB’s website logo that appears at the top of each page. The executive director reviewed the Scope of Work and the parties need to sign the paperwork.

The executive director then discussed LR 125. This is a Legislative study reviewing the public power system in Nebraska. The hearing will be on September 22, which is the same day as the Board’s September public meeting. The executive director stated that he planned to testify at the hearing, since one of the issues to be studied is the role, jurisdiction and relationship of the PRB in the development, generation, transmission and delivery of electricity in Nebraska. The hearing is open to the public, so the Board members could attend if they wished to do so. The executive director was not sure if there would be public testimony or if it would be by invitation only.

The executive director then told the Board that there are two subjects of possible legislation that he would like the PRB to pursue during the 2018 Legislative session. The first item was to add language in 70-1020 specifically authorizing the use of a “special assessment.” The Board for several decades has collected the entire appropriation authorized by the Legislature in its biennial budget, then used any unallocated funds at the end of the fiscal year to offset or reduce the next year’s assessments. The Governor’s Budget Office now insists that that the PRB collect only the amount of its appropriation that the Board historically spends. If additional funds are needed, the Budget Office’s position is that the Board can levy a special assessment to collect the additional funds, up to the total appropriation authorized by the Legislature. The problem is that there is no statutory language authorizing such a special assessment. There is language in 70-1024 authorizing the Board to levy a special assessment, but that is limited to collecting the funds needed to pay for a coordinated long-range power supply plan if the representative organization cannot or will not perform the work. Executive Director Texel explained that he does not want to be put in a situation where the Board needs to collect additional funds, but the Board’s authority to conduct a special assessment is either unclear or subject to challenge due to lack of statutory authority. Executive Director Texel would like to ask the Legislature to clarify in 70-1020 that the Board is authorized to use a special assessment to collect its remaining appropriation. Although a substantive change, it would hopefully be noncontroversial, as it is just providing the Board with flexibility for funding that would hopefully reduce the assessments on the utilities and their customers. Since the need for this change is being created by the Governor’s Budget office position, the executive director would like the Governor to support the change.

The second item is to allow the PRB to fine entities or take other action to ensure compliance with provisions in 70-1014.02 for privately developed renewable energy generation facilities. Currently the language in that statute states that the private developers must provide the certifications in the statute at least 30 days prior to commencement of construction. There was a situation where an entity began construction prior to submitting the certifications to the PRB required by 70-1014.02. In this situation, the executive director believed it was an oversight. After learning of the certification requirements in 70-1014.02, the entity stopped construction and submitted the certifications in 70-1014.02. In the response setting out his opinion, Executive Director Texel found that the legislative intent was to promote private renewable generation facilities. Although he would have the authority to deny the exemption from the normal hearing requirements under 70-1014 due to noncompliance with the notice requirements in 70-1014.02, the executive director believed that would run counter to the Legislature’s intent. However, he does not want developers to believe they can simply ignore the statutory requirement, and he does not want to ignore a requirement set out in statute, either. The acknowledgement letter finding that the developer was exempt from the normal hearing requirements stated that the letter was not intended to establish a precedent.

Executive Director Texel explained that he would like to ask the Legislature to amend 70-1014.02 to allow him to impose a fine on an entity that did not file the certifications at least 30 days prior to construction. Currently the only alternative is to find that the developer failed to comply with the 30-day requirement, and so is required to file a formal application and proceed to an evidentiary hearing under 70-1014. Executive Director Texel said he spoke with representatives of several developers about imposing a fine as a solution and they thought it was a good option to avoid the hearing requirement. The Board agreed that the executive director should draft language to amend the statute to address the problem. The Board told the executive director the amount of the fine would need to be commensurate with either the project’s rated capacity or the total cost. That way small projects pay a small fine, while large commercial facilities would pay a large fine. The Board asked where the funds from the fine would go. The executive director said he believes the Nebraska Constitution has a provision requiring all fines to go to the education units in the county where the fine is levied. The funds would not go to the PRB.

The Board noted its next scheduled meeting dates are on the fourth Friday of each month. The next meetings will be on August 25, September 22, and October 27.

Vice Chairman Morehouse stated that the City of Grand Island was a good host last month and he appreciated the use of the City’s impressive Council Chambers. He asked the executive director to send a letter to the City thanking them for their hospitality. He also asked the executive director to send a thank you to the Doniphan Control Center.

The tour and information was very interesting and he wanted to express the Board’s appreciation for the work that was put into the tour.

Mr. Grennan moved to adjourn the meeting. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse—yes, Mr. Grennan—yes, Mr. Hutchison—absent, and Mr. Moen—yes. The motion carried 4 – 0 with one absent. The meeting was adjourned at 11:12 a.m.

_______________________________

Timothy J. Texel

Executive Director and General Counsel



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