Note: These minutes are in draft form pending approval by the Board at its next public meeting.
Minutes of the 768th Meeting
October 23, 2015
The 770th 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 Lichter, Vice Chairman Reida, Mr. Grennan, Mr. Haase, and Mr. Morehouse. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on October 13, 2015. All background materials for the agenda items to be acted on had been provided to all Board members by e-mail and a copy of the materials 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 the Board would consider was available for public inspection on the table in the back of the room, as well as extra copies of the agenda.
The Board first considered the draft minutes from its September 25, 2015 meeting. The PRB staff had no changes to recommend to the draft minutes. Mr. Haase moved to approve the minutes. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5 – 0.
The next agenda item was acceptance of the expense report for the month of August. The expenses were $28,374.06 in personal services, $18,527.31 in operating expenses, and $1,151.79 in travel expenses. The total expenses were $48,053.16. Mr. Morehouse moved to accept the expense report. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5 – 0.
The next item on the agenda was to consider South Central Public Power District’s Petition for Charter Amendment 5. The petition was filed on August 10, 2015. The purpose of the amendment is to redistribute the population among the District’s voting subdivisions to make them more substantially equal. The amendment also incorporates area into the District’s chartered territory where customers are located, but the area was not part of the District’s territory. The PRB published notice in two local newspapers as required by state law. The notice was published in the Hastings Tribune and the Superior Express on September 3, 10 and 17, 2015. The Notice stated that any interested party could file a protest or objection by close of business on October 21. No protests or objections were filed. The Board may waive a hearing if no protest or objection is filed. The Board did not receive any protest or objection. The executive director told the Board that the Petition states sections two and five are being amended. Actually, there are no changes in section 2. Exhibits D and E to the Petition show the population percentage range for each of the newly configure subdivisions. The executive director recommended the Board waive the hearing and approve the Petition for Charter Amendment 5. Mr. Grennan asked if the customers that would be added to the District’s territory were part of a service territory amendment and why this would not have been done after the census. Executive Director Texel explained that the purpose of the amendment was to add customers to the District’s territory so the District would not have to certify each individual prior to an election. It was not being done due to a service area agreement amendment. Executive Director Texel was not sure about the timing issue. Mr. Grennan moved to waive the hearing and approve South Central Public Power District’s Petition for Charter Amendment 5. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5 – 0.
The next agenda item was to consider PRB-3811. This was an application filed by Loup River Public Power District. The application was placed on the agenda when it was received due to the length of the project and because the staff thought substantive changes were being made to the voltage or location of the line. The engineer at Loup that needed to confirm what changes were being made was out of the office when the agenda was sent out, so the staff placed the application on the agenda. After further review, it was found that the project consisted of maintenance (including new support structures would be vertical instead of a cross arm and ten feet taller) and reconductoring that did not require formal Board approval. An tap line between two substations was under 500 feet in length, so that could be be administratively approved by the executive director. The application as filed was for .9 miles of line. But the new conductor was at the same voltage, and the project was not moving from the existing location. The existing line already had shield wire and underbuild, so there were no changes to the line that required formal Board approval. Board Policy 8 allows maintenance to a line without approval by the Board. Agenda item 5 was withdrawn from consideration.
The next agenda item was to consider PRB-3807-G. The City of Falls City filed this application on August 27, 2015. The application requests to install an additional 9.3 megawatts of generation. The proposed unit would be able to use dual fuel – natural gas or fuel oil. The additional generating unit would be installed in the City’s current municipal power plant. The Board held a hearing and heard evidence on this application on September 25 in conjunction with its September public meeting. The Board had taken the matter under advisement and no order has been issued. On October 16, the City of Falls City filed a Motion to Reopen the Record to submit additional evidence. The Board granted the motion. The matter is scheduled for an evidentiary hearing today. The Board agreed to table this item until after the new portion of the hearing could be conducted.
The next item was a discussion concerning the compensation for the PRB’s designated Regional State Committee member. Chairman Lichter asked to have this placed on the agenda for the Board to discuss. Chairman Lichter asked Executive Director Texel to explain the situation. The executive director told the Board he met with representatives of the Nebraska Power Association and the individuals that normally represent Nebraska’s transmission-owning members at SPP events to discuss this issue. He met with Kevin Wailes (NPA president), Shelley Sahling (NPA administrator/secretary), Joe Lang (OPPD), Tom Kent (NPPD) and Jason Fortik (LES) They expressed support if the PRB wanted to pursue additional compensation for the designated RSC member due to the additional workload that member assumes. The current law only allows Board members to be paid a per diem of $60 for each day they are engaged in Board business, in addition to reimbursement for expenses. Additional compensation would therefore require a legislative changes to amend the current statute (70-1003). Chairman Lichter discussed his time spent as the RSC representative. He pointed out that the previous RSC representative, Michael Siedschlag, had also commented on the time and dedication it takes to represent Nebraska’s ratepayers and utilities at the RSC meetings. Chairman Lichter explained that five to ten days a month was spent working on SPP RSC related material and issues. That would only increase if the member attended more NARUC (National Association of Regulatory Utility Commissioners) functions. Chairman Lichter stated that he had contacted Mr. Siedschlag and he had agreed that tenure is a key to having influence at the RSC meetings. To be truly effective the designee would need to commit to serving in the RSC capacity for 4 to 5 years. This type of longevity and continuity allows for the RSC member to become knowledgeable, and to have an important role in RSC decision-making. He thought that it would work best if the designee were either an engineer or an attorney. Those professions provide background and training in the types of work the RSC does, but an attorney not familiar with utility issues might have a steep initial learning curve. Chairman Lichter noted that the other RSC members were typically active at NARUC, and it provides a very good forum for networking and discussion of current issues. He therefore thinks that the PRB’s RSC member should become more active in attending NARUC activities. Chairman Lichter said the RSC member needs to dedicate about five to ten days a month to SPP related activities. Former Chairman Siedschlag had agreed with that estimate in an e-mail he sent to Chairman Lichter. Chairman Lichter stated that the RSC designee is performing part-time work similar to what a state senator would be doing when the legislature is not in session. The RSC designee is representing Nebraska in the SPP and RSC organizations. Chairman Lichter thought it made sense to consider compensating the RSC designee at a similar amount as state senators, in the range of $12,000 to $15,000 per year. Mr. Morehouse said if the problem is time away from the person’s normal employment, he doubted that the extra pay would help. It does not do anything to alleviate the time away from one’s regular job in order to fulfill the RSC duties, and that is probably the greater conflict. He wondered if the Governor would be able to find someone with a full-time job who would be willing and/or able to commit the time to be the RSC representative. Mr. Grennan stated the SPP RSC is of major importance for Nebraska, its utilities, and ultimately its ratepayers. The State definitely needs to have a designee that can represent Nebraska with longevity and continuity.
Chairman Lichter noted that there had previously been some discussion about designating the PRB Chairman as the RSC designee, or about making the RSC designee full time. He does not believe the Board member designations need to change, and does not believe the designations need to change, and it would not be necessary or even beneficial to have the Chairman designated as the RSC designee. This would deny other PRB members the opportunity to be Chairman. The compensation paid to the RSC designee is needed due to the amount of time required, though. It would be ideal to have two members assigned this role so that the members can establish a history, so when the Board has to change its representative there is a back-up ready to assume the post seamlessly. Jason Fortik, LES representative who often represents LES at SPP activities, stated that agreed with the idea that the RSC representative deserves additional compensation. Chairman Lichter stated that he wanted to make a motion so that it would have more weight with any potential legislation. Chairman Lichter moved to direct the executive director to discuss with the Nebraska transmission-owning utilities the best way to proceed in this area, and maybe draft legislation to accomplish the change. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5 – 0.
The Board recessed its public meeting at 9:44 a.m. The executive director explained that during the recess the Board would conduct an evidentiary hearing on application PRB-3807-G.
The Board reconvened its public meeting at 10:31 a.m. Executive Director Texel explained that during the recess the Board had conducted an evidentiary hearing on PRB-3807-G. This was an application filed by the City of Falls City to install a 9.3 megawatt dual-fuel generating unit. The application was filed on August 27, 2015. An evidentiary hearing was held on September 25, 2015. A motion to re-open the hearing was filed by the Applicant on October 16. The Board has not issued a decision in this proceeding yet, so the Board believes it retains jurisdiction over the proceeding. The Board granted the motion to re-open the hearing and allow new evidence into the record. The Board members noted that they had deliberated on this matter following the hearing and prior to reconvening the public meeting. Chairman Lichter asked if there was a motion. Mr. Grennan made a motion to approve application PRB-3807-G. Vice Chairman Reida seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5 – 0.
The next item on the agenda was the executive director’s report. The Board members had a copy of the monthly activities update from JK Energy Consulting regarding its Southwest Power Pool (SPP) activities. Chairman Lichter stated that at the SPP October meeting the new States entitled to a seat on the RSC based on the addition of the Integrated System (IS) utilities will be seated on the RSC. The new members would be North Dakota, South Dakota, and Iowa. The quarterly meeting is the following Monday, October 26.
Executive Director Texel told the Board about the planned meeting with the Nebraska Power Association, or at least selected NPA representatives, that was to be an Energy Forum to discuss PRB issues. Mr. Grennan, Mr. Haase and Executive Director Texel will meet with the NPA representatives on November 10. Next month there will be an update on how that goes.
The executive director then gave a progress report on the Request for Proposals (RFP) for the Board’s SPP consultant. The RFP has been issued and questions have been submitted. The State’s responses are due Monday. Mr. Grennan asked about the schedule for the RFP. The Board decided on November 20 they would stay after the Board’s public meeting to review and discuss the RFP bids. They set aside December 1 and 2 for dates to do interviews, if the Board decides it will conduct any interviews. Mr. Grennan will not be available the first week of December.
The executive director explained that formal complaint C-51, filed by Craig Carlson against Concorde Management Inc., had been dismissed. The PRB held oral arguments in this proceeding, after which the Board issued an order dismissing the proceeding based on it being moot. Concorde Management is no longer the property manager for that building in question. The Board found that the only relief it could provide is to order a party to cease activity that violates Nebraska law, particularly Chapter 70, Article 10. Because the party, Concorde Management, has already ceased the activity, the proceeding is moot. A copy of the Order is available for any utilities who wish to review it.
The Board’s next meetings are scheduled for November 20, December 18, 2015, and January 22, 2016. The 2016 meetings have been scheduled for the fourth Friday of the months, unless there is a State holiday that falls on the same day. The meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall South, Lincoln, Nebraska, unless otherwise specified on the agenda.
Mr. Grennan moved to adjourn the meeting. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan– yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 5– 0. The meeting was adjourned at 10:57 a.m.
Timothy J. Texel
Executive Director and General Counsel