Note: These minutes are in draft form pending approval by the Board at its next public meeting.
NEBRASKA POWER REVIEW BOARD
Minutes of the 782nd Meeting
March 24, 2017
The 782nd meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the Liquor Control Commission Hearing Room, 5th floor, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The roll was called and present were Chairman Reida, Mr. Grennan, and Mr. Morehouse. Mr. Haase has informed the staff earlier that he would be out of town and not able to attend this meeting. Mr. Lichter was not in attendance. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on March 14, 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 of the Open Meetings Act was available in a three-ring binder on a table in 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. Executive Director Texel welcomed several special guests in the audience and thanked them for attending: Senator Bruce Bostelman, who is a member of the Legislature’s Natural Resources Committee, and the new appointee to the Board, Greg Moen.
The Board first considered the draft minutes from its January 27, 2017, meeting. The staff did not have any recommended changes. Mr. Morehouse moved to approve the minutes. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
The next agenda item was acceptance of the expense reports for the month of January and February. The expenses for January were $22,545.49 in personal services, $34,266.51 in operating expenses, and $680.07 in travel expenses. The total expenses were $57,492.07. Executive Director Texel explained that the JK Energy Consulting payment was done twice in this month and therefore that account was higher. The December payment was processed at the beginning of the month and January’s payment at the end. In addition, a payment was made to GIS Workshop for hosting the online digital service area map. The expenses for February were $23,428.23 in personal services, $2,979.16 in operating expenses, and $2,115.71 in travel expenses. The total expenses were $28,523.10. Mr. Texel explained why the report showed a different amount in operating expenses than he had announced. Since the Board is reimbursed for paying the printing fees the numbers given demonstrate what the Board actually spent. Mr. Morehouse moved to the expense reports for January and February. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman
Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
The next item on the agenda was a presentation given by Paul Suskie, Southwest Power Pool’s (SPP) General Counsel and Executive Vice President for Regulatory Policy, and Kandi Hughes, an attorney in SPP’s Corporate Legal Division. The SPP offers to visit each state regulatory agency with jurisdiction over SPP members every year or two. The Board asked to have this presentation and the SPP was happy to oblige. Executive Director Texel thanked Mr. Suskie and Ms. Hughes for taking the time to travel to Nebraska to give this presentation. Also speaking on behalf of their SPP member utility was Tom Kent, with the Nebraska Public Power District, Dennis Florom, with the Lincoln Electric System, and Joe Lang, with the Omaha Public Power District. The presentation covered SPP background information, current activities before the SPP and the Regional State Committee, and the involvement of the Nebraska members in SPP. The discussion included information on potential new members considering joining the SPP, the diversity of the SPP footprint, and the SPP market. After the presentation the Board members thanked those who spoke on behalf of SPP and the Nebraska utilities.
The Board recessed its meeting at 10:42 a.m. The Board reconvened its public meeting at 11:01 a.m. All three Board members that were present prior to the recess were again present.
The next item on the agenda was to consider renewal of the Southwest Power Pool Regional State Committee Consultant contract with JK Energy Consulting, LLC. Under the terms of the contract, JK Energy is allowed to submit a request to increase its compensation by no more than 5% at least 120 days of the contract’s renewal. JK Energy submitted a written request for a 3% increase prior within the required timeframe. JK Energy requested to increase the monthly compensation from $13,500 to $13,900. JK Energy has been at the same compensation level since 2009. John Krajewski, the owner of JK Energy, spoke to the Board and explained that his company had asked for an increase from all of its clients, but the increase requested from the State was much less than for his other clients. He told the Board that health insurance increases is the biggest reason creating the need for the change. Mr. Morehouse moved to approve an increase in monthly compensation for State Contract 69810 04 with JK Energy Consulting from $13,500 to $13,900 for the 2017-2019 contract term. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
The Board went into recess at 11:13 a.m. to conduct an evidentiary hearing on Norris Public Power District’s Charter Amendment 19 and Seward County Public Power District’s Petition for Dissolution. During an evidentiary hearing, the Board acts in its quasi-judicial capacity, so the hearing is not part of the public meeting. The executive director explained that the Board will reconvene its public meeting after the hearing and may or may not issue a preliminary decision on the filings.
The Board reconvened its public meeting at 12:42 p.m. During its break, the Board held an evidentiary hearing. The Board addressed both the Norris PPD’s charter amendment and Seward Co. PPDs Petition for Dissolution. The evidentiary hearings were combined to address both items. Executive Director Texel explained that the Norris PPD and Seward Co. PPD presented evidence during the hearing that it was in the best interests for Seward Co. PPD to merge with and become part of Norris PPD. Seward Co. PPD’s chartered territory would become part of Norris PPD’s charter and two additional directors would be added to the Norris PPD’s board. Norris PPD’s charter amendment would incorporate the Seward PPD’s chartered territory and include the two directors. The Seward Co. PPD’s dissolution would terminate the existence of Seward Co. PPD as a district, allowing Norris to incorporate all its debts and assets into its business. The PRB had to publish notice of Norris PPD’s charter amendment for three consecutive weeks in at least two newspapers and then have a three-week wait period before acting on the petition. Notice was published in the Lincoln Journal Star, the Beatrice Daily Sun, and the Seward County Independent on February 15, February 22, and March 1, 2017. The notice explained that any interested party could file a protest or objection prior to the date of the hearing. No protests or objections were filed. The Board can waive a hearing on the charter amendment, however, due to the significance of the merger of Seward Co. PPD and Norris PPD, the Board combined the two hearings. One issue in this amendment is that absorbing Seward Co. PPD’s population creates some disparity in the population of the District’s subdivisions. The general rule is if the population difference is within a 10% variance, the presumption is that the district exercised due diligence to perform a reasonable apportionment and the population is substantially equal. Population figures on Exhibit C show one subdivision will be slightly over the 10% variance, while two subdivisions will be slightly under the 10% variance. The subdivisions under 10 % were from Norris PPD’s territory. The District acknowledged that there is a slight variance. I will examine the numbers closely after the next census. The plan is for the merger and charter amendment to become effective on May 1. The Board made two separate motions. Mr. Morehouse moved to approve Norris Public Power District’s Petition for Charter Amendment 19 and have it become effective May 1, 2017. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
Mr. Morehouse moved to approve the Seward County Public Power District’s Petition for Dissolution and terminate its district effective May 1 at 12:01 a.m. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
The Board then went into recess again at 12:48 to conduct an evidentiary hearing on the Lincoln Electric System’s (LES) application, PRB-3849. During an evidentiary hearing, the Board acts in its quasi-judicial capacity, so the hearing is not part of the public meeting. The executive director explained that the Board will reconvene its public meeting after the hearing and may issue a preliminary decision.
The Board reconvened its public meeting at 1:15 p.m. During its break the Board conducted an evidentiary hearing. LES presented material on its application, PRB-3849. This is an application to construct approximately 8 miles of 115-kilovolt transmission line south of the City of Lincoln in Lancaster County. The application was filed on February 14, 2017. The PRB consulted with the Game and Parks Commission (the Commission) as required by Neb. Rev. Stat. §37-807(3). In a letter dated March 15, 2017, the Commission informed the Board that there are no records of threatened or endangered species in the project area. The Commission determined that the project would have “No Effect” on any threatened or endangered species and it does not object to the Board approving the project. The Board also published notice in the Lincoln Journal Star newspaper on March 1. The notice stated that anyone may file an objection or protests to the project prior to the hearing. The Board also sent notice to alternate and potentially interested power suppliers in the area. In addition to LES, notice of the hearing was sent to the City of Hickman, the City of Bennet, Nebraska Public Power District, Omaha Public Power District and Norris Public Power District. During the hearing LES put on evidence regarding the need for the project. Mr. Morehouse moved to approve Lincoln Electric System’s application for a transmission line, designated as PRB-3849. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent. The executive director explained that the vote was a preliminary action. The written order will be the Board’s final action on the matter. But the Board considers the preliminary action binding as to the approval or denial of the project, which allows applicants to proceed with the project without waiting 30 days or more for the Board to issue its written decision.
The next item on the agenda was to consider creation of Service Area Agreement 419. SAA 419 is the next available number to be assigned to a new service area agreement. Twin Valleys PPD and Southern PPD filed this application on January 6, 2017. Currently, the two power suppliers have two service area agreements: SAA 256 and SAA 301. There are two agreements because many years ago Franklin Co. PPD merged with Southern PPD. The separate service area agreements were never merged, though, so that is what is being requested now. The new service area agreement does not involve any change in the service area boundary between Southern PPD and Twin Valleys PPD, it would just merge the two agreements to create one agreement, so Southern PPD and Twin Valleys PPD would have one service area agreement delineating their boundary instead of two. Mr. Morehouse moved to approve the creation of SAA 419. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent.
The next item on the agenda was to consider SAA 253-17-A. This is a joint application filed by the City of South Sioux City and the Nebraska Public Power District (NPPD) to amend retail service area agreement 253. The application was filed on February 13, 2017. The amendment would transfer territory annexed by the City from NPPD to the City. The annexations occurred in 2007 and 2015, so the transfer is beyond the one year time frame in which a municipality can acquire annexed service area as of right. This is a joint application and the parties have worked out the details for the transfer of customers and territory prior to filing the application with the Board. Executive Director Texel stated he thought it was a straightforward amendment and recommended approval. Mr. Morehouse moved to approve SAA 253-17-A. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr. Grennan—yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two 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. With the presentation earlier the Board did not have any new information to add.
The next item was the Legislative update. The executive director reported on several bills that the Board’s staff is tracking. The Board members also had a document in their notebook showing the bills being tracked and the current status of each bill.
Fist was LB 327, which is the State’s main budget bill for the next biennium. Executive Director Texel explained that the Governor proposed to reduce the Board’s appropriated budget request by $50,000 in each year of the biennial budget. Almost all agency budgets were reduced in the Governor’s proposed budget, so the Board was not being singled out. The Appropriations Committee’s preliminary decision was to not reduce the PRB’s budget and appropriate the entire requested budget of $656,000. The Boards budget had an approximate 1% reduction when not taking into account health insurance and cost of living raises. There was a .9% increase when health insurance and cost of living raises are included. A letter was submitted to the Committee instead of testifying at the budget hearing.
LB 127 was introduced by Senator Groene. The bill would change the notice requirements for public meetings in the Open Meetings Act. It would repeal language allowing public bodies to decide on the method of how to issue public notice of its meetings and instead require that all public bodies publish notice in a newspaper with general circulation in each county within the public body’s jurisdiction. That means state agencies would have to publish notice in newspapers that can be shown to have general circulation in all 93 counties. Executive Director Texel told the Board that an amendment had been added exempting state agencies from the new requirements, as the bill would only apply to political subdivisions. The Government, Military and Veteran’s Affairs Committee had added the amendment when the bill was forwarded to general file.
LB 547 was introduced by Senator Watermeier. This bill would amend § 70-667 to remove the ability of public power districts to use eminent domain to acquire privately operated electric generation or transmission facilities. It would also amend § 70-1014.02 to exempt all privately developed electric generation or transmission facilities from Power Review Board approval requirements. The private developer would only need to file the certifications in § 70-1014.02 for all types of generation, not just those using renewables. The bill retains Board oversight for public power entities, though. The Natural Resources Committee indefinitely postponed the bill.
LB 657 was introduced by Senator Wayne. It would adopt the Retail Electricity Transparency Act. This is essentially a requirement for electric utilities to unbundle their electric bills. By July 1, 2018, all electric utility bills would have to separate out and show the charges for energy, generation, transmission and distribution. The Natural Resources Committee indefinitely postponed the bill.
LB 660 was introduced by Senator Wayne. It would adopt the Nebraska Retail Electricity Choice Act and eliminate retail service areas. The bill provides for retail competition in Nebraska’s electric market beginning July 1, 2018. The Nebraska Public Service Commission is charged with establishing the retail competition system, after holding a series of public hearings. At the hearing before the Natural Resources Committee Senator Wayne indicated he was open to having the PRB oversee implementation of retail competition in the electric industry instead of the PSC. The hearing on this bill was very extensive with a great deal of opposition from many different groups, including many businesses and chambers of commerce. The Committee indefinitely postponed the bill.
The Board has scheduled its 2017 meeting dates for the fourth Friday of each month. The next meetings will be on April 21, May 26 and June 23.
Mr. Morehouse moved to adjourn the meeting. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Haase – absent, Mr.
Grennan – yes, Mr. Lichter – absent, and Mr. Morehouse – yes. The motion carried 3 – 0 with two absent. The meeting was adjourned at 1:44 p.m.
Timothy J. Texel
Executive Director and General Counsel