Note: These minutes are in draft form pending approval by the Board at its next public meeting.
Minutes of the 752nd Meeting
April 4, 2014
The 752nd 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 Vice Chairman Reida, Mr. Grennan, Mr. Haase, and Mr. Morehouse. Executive Director Texel noted that Chairman Lichter would not be in attendance because he was attending the Southwest Power Pool’s Regional State Committee special meeting in Dallas, Texas to discuss the issue of the Western Area Power Administration’s request to join the SPP. The executive director announced that public notice for the meeting had been published in the Lincoln Journal Star newspaper on March 25, 2014. All background materials for the agenda items to be acted on had been provided to all Board members on the DocLanding electronic distribution system, 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 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 March 14, 2014, meeting. The staff did not have any recommended changes. Mr. Haase moved to approve the minutes. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan – yes , Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent. Chris Dibbern, General Counsel for the Municipal Energy Agency of Nebraska, expressed that she thought the minutes did a thorough job of describing the Board’s discussion of bills before the Legislature, especially LB 965. That is helpful to MEAN and other utilities.
The next agenda item was acceptance of the expense report for the month of March. The expenses were $18,981.76 in personal services, $11,805.52 in operating expenses, and $425.04 in travel expenses. The total expenses were $31,212.32. Mr. Morehouse moved to accept the expense report. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was consideration of the Seward County Public Power District’s Petition for Charter Amendment 8. The petition was filed on January 28, 2014. The purpose of the amendment is to incorporate portions of Butler, Seward and York counties that are served by the District, but had previously not been included in the District’s charter. Seward County PPD’s current charter states the District serves all of Seward County. As a result of the mapping project, it was discovered that Seward County PPD’s service area also includes a small portion of Butler and York counties. Notice of the proposed amendments was published on February 12, 19 and 26, 2014. The PRB is required to publish notice in two local newspapers for three consecutive weeks. The two newspapers were the Seward County Independent, and the York News-Times. The notice explained that any interested party could file a protest or objection by the close of business on March 20, 2014. The PRB did not receive any protests or objections. Executive Director Texel recommended the Board waive the hearing and approve Seward County PPD’s Petition. Mr. Morehouse moved to waive the hearing and approve Seward County Public Power District’s Petition for Charter Amendment 8. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was consideration of the Nebraska Public Power District’s Petition for Charter Amendment 7 – Supplemental. The original petition was filed on November 15, 2013. The purpose of this supplemental amendment is to correct a discrepancy in the notice. After the PRB issued the Certificate of Approval for Charter Amendment 7 on February 14, it was discovered that the notice published by the Board did not correctly set out the amendments concerning Dodge County in NPPD’s Subdivision 9. The notice mistakenly omitted the towns of Hooper, Nickerson and Winslow from a list of towns that were to be excluded from NPPD’s chartered territory. After consultation with NPPD’s legal division, it was decided to republish the notice in the affected area, which is Dodge County, to correct the error. The new notice was published on February 26, March 5 and March 12, 2014. The PRB is required to publish notice in two local newspapers for three consecutive weeks. The two newspapers were the Hooper-Scribner Rustler-Sentinel, and the Fremont Tribune. The notice explained that any interested party could file a protest or objection prior to the close of business on April 3, 2014. The PRB did not receive any protests or objections. The executive director told the Board since the PRB made the mistake, the PRB will pay for the cost of the notices. Unlike most petitions for charter amendments, this petition is being done on the Board’s own motion, in order to correct the error. The executive director recommended the Board waive the hearing and approve the Supplemental Petition. Mr. Haase moved to waive the hearing and approve the Petition for Nebraska Public Power District’s Charter Amendment 7 — Supplemental. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was application PRB-3752. This is an application submitted by the Southern Public Power District requesting authority to construct .6 mile of 69 kV transmission line in Hall County. The application was filed on March 10, 2014. The proposed construction is in the City of Wood River’s service area. The City filed a signed Consent and Waiver form consenting to the construction and waiving a hearing. The total cost of the project is estimated to be $115,000. The Board did not receive any protests or objections. The project would remove an existing 34.5 kV line and reconstruct the line on the opposite side of the road, but with an increase in capacity to 69 kV. The project is in anticipation of the conversion of NPPD’s Alda substation from 34.5 kV to a 69 kV. The new line also allows Southern PPD to rebuild its existing distribution as underbuild on the proposed 69 kV line. As required by Neb. Rev. Stat. section 37-807(3), the Board consulted with the Nebraska Game and Parks Commission to ensure that the project would not harm any threatened or endangered species or critical habitat. In a letter dated April 3, 2014, the Game and Parks Commission determined the project would have “no effect” on any threatened or endangered species or critical habitat, and the Commission does not object to approval of the project. Chris Dibbern, General Counsel for MEAN, commented that Wood River is currently a member of MEAN, and MEAN does not have any objection to the project. Wood River will be changing its membership status with MEAN, but MEAN will continue to supply the City until the middle of 2015. At that time Southern PPD will become Wood River’s source of wholesale power. Mr. Morehouse moved to approve PRB-3752. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was a presentation on resource adequacy by Pat Pope, President and CEO of the Nebraska Public Power District. The executive director told the Board that Mr. Pope had given the presentation to the Nebraska Rural Electric Association’s annual meeting in December 2013. The executive director thought the presentation would be beneficial to the Board members and asked if Mr. Pope would be willing to share his presentation with the PRB. At the beginning of his presentation, Mr. Pope shared several news articles describing situations where nuclear generation facilities were being closed in other states. One such closure was the Vermont Yankee facility in the northeast part of the country. The significance of these closures was that the facilities were being closed prior to the expiration of their operating licenses. These facilities could not show a profit in the new market, so the decision was made to close them permanently. Mr. Pope described NPPD’s baseload, intermediate and peak generation as shown on a load duration curve. He discussed the baseload available for NPPD. There are several contracts for baseload generation output at NPPD’s facilities that were not renewed. This energy capacity came back to NPPD, which increased NPPD’s baseload availability. There was some discussion about the cost of natural gas availability and prices and how it effects the cost of electric generation. Mr. Pope talked about wind resources in Nebraska. Several slides showed how Nebraska compared to the top ten states with wind generation resources. The slides showed the carbon intensity in each of the states, compared to the amount of wind generation resources. Texas is higher in wind generation than Nebraska, but it is also higher in carbon intensity. Nebraska has the lowest carbon intensity when compared to the other states with higher amount of wind resources. This information is available from the Energy Information Administration. Those states that were lower than Nebraska in carbon intensity relied on hydro and nuclear generation facilities. Vice Chairman Reida asked if carbon intensity is accounted for in states that import energy. Mr. Pope stated that the importation of energy is considered in the EIA numbers. Mr. Morehouse asked how the utilities are addressing those people who want utilities to switch from coal to wind resources, but often do not understand the difficulties in that process. Mr. Pope stated that the Nebraska Power Association has been engaging in more aggressive education to address those concerns. Mr. Grennan asked about how renewables fit into the SPP market. Mr. Pope replied that the new SPP market is an open retail market. What is different about it is all the utilities still have an obligation to serve their retail customers. Mr. Morehouse asked how the natural gas market would affect the electric market if natural gas prices were to go back to the prices when it was as high as $11 in 2008. Mr. Pope explained it would definitely hurt those utilities that rely heavily on natural gas generation facilities and no other types of fuel sources. Mr. Pope also stated that NPPD has fuel reserves at its coal facilities. If something happened to interrupt the coal supply, the generation facilities could continue to operate for about three months. Cooper Nuclear Station has enough uranium to operate for two years. If natural gas supplies are interrupted, natural gas facilities cease to operate. Executive Director Texel asked if the facilities such as the nuclear plants or coal facilities that were closed could be started again if needed. Mr. Pope discussed the difficulties to restart a plant once the decision was made to closed it. Basically, once it is closed, it is closed permanently. He also talked about the difficulty in getting the Yucca Mountain nuclear storage facility completed and how the federal government is not really helping to resolve issues related to nuclear storage due to the storage problems.
The Board recessed at 10:10 a.m. The Board reconvened its meeting at 10:20 a.m. All Board members present prior to the recess were still present.
The next item on the agenda was the executive director’s report. He noted that since Chairman Lichter and Mr. Krajewski were in Dallas at the RSC meeting, he had nothing to report on SPP issues. Mr. Krajewski would provide his monthly activities report after the RSC meeting.
The next item was the Legislative update. There are five days left in the session. 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. The executive director noted that bills without a priority designation are not expected to be debated any more this session.
LB 718 (introduced by Senator Crawford) would amend the Administrative Procedure Act to require each agency to twice each year prepare an agenda listing the rules and regulations that are being developed or reviewed, or there is a plan to do so. One agenda is due 30 days after the Legislative session ends, while the other is due on October 15. New rules or regulations, or amendments to existing ones, could not be approved unless they had been placed on the agenda. The bill was advanced to General File on February 4 with a technical Committee amendment. It has not been prioritized.
LB 719 (introduced by Senator Crawford) requires agencies to prepare a written report summarizing the testimony at the public hearing on new or amended regulations, including a list of issues and questions that were submitted, and provide the agency’s response. The report must be submitted along with the other paperwork necessary to process the approval of new or amended regulations. LB 719 was placed on Final Reading on March 3. This is designated as a speaker priority bill.
LB 720 (introduced by Senator Crawford) provides that any member of the Legislature, the governing body of a political subdivision, or a citizen with at least 100 signatures on a petition, can file a complaint concerning new regulations with the chairperson of the Legislative Council’s Executive Board. There is then a procedure to submit it to the bill’s sponsor and the committee with jurisdiction for action. Agencies must respond to the complaint. This bill is on General File with a Committee amendment. It does not have a priority designation.
LB 965 (introduced by Senator Ken Haar) is the “externalities” bill. Among other changes, the bill would require the PRB to give consideration to a list of costs and benefits when approving generation or transmission facilities. The Natural Resources Committee advanced the bill to General File. Senator Haar designated the bill as his priority bill. The Committee amendments are set out in AM 2045. At the March meeting the Board had voted to oppose LB 965, both as drafted and with the Committee amendments, due to the ambiguity and lack of clarity regarding what the PRB’s review would entail. The executive director had provided Sen. Haar with a memo outlining the Board’s concerns about the bill. Senator Haar had filed an amendment, AM 2562, to remove the entire section of the bill that requires the Board to do anything regarding the externalities. The PRB would neither review the costs and benefits, nor assure that the applicant’s governing body had done so. The Board had decided that if AM 2562 were adopted, the Board’s position would switch from opposed to neutral, and the fiscal note would be reduced to “no fiscal impact.” The Board had clarified that it did have remaining concerns about the bill, but not enough to oppose the bill. Executive Diretor Texel told the Board that on the floor debate Senator Haar had substituted AM 2562 (the amendment removing the PRB’s review) for a minor wording amendment. After three hours of debate, Senator Haar’s amendment was not adopted by a vote of 20 to 19. Senator Haar moved to reconsider the vote, but after another half hour or so of debate, he must not have thought he had sufficient votes to prevail, because he moved to bracket, or kill, the bill.
LB 1075 (introduced by Senator Burke Harr) would make elected or appointed officials serving on governing bodies of political subdivisions or state agencies ineligible to be employed by that entity for two years after leaving office. Also, any person who appoints a member to a governing body of political subdivision or state agency is not eligible to be hired by that entity for two years after leaving the office that had the appointment authority. The bill is still in Committee, and was not prioritized.
LB 1100 (introduced by Senator Ken Haar) creates a Public Power Task Force to study many aspects of public power in Nebraska, including whether certain power suppliers should be consolidated, and the role of the PRB in determining duplication of generation and transmission resources. The report would be due December 1, 2014. Senator Haar did not ask the Committee to forward the bill to general file.
LB 1115 (introduced by Senator Davis) would appropriate $200,000 to the PRB to pay for a study of state, regional and national transmission issues, the infrastructure needed in order to export electricity to markets outside Nebraska, and barriers to those export opportunities. The PRB would issue a request for proposals for a consultant, after coordinating with a working group of stakeholders. The bill was designated as a Speaker priority bill, and was moved to Final Reading on March 31. The bill will need to be pulled back from Final Reading to Select File for an amendment. The executive director had made an error on the fiscal note by placing $2,000 in cash funds for the Board’s per diems. Those funds were supposed to come from general funds. The amendment will correct the mistake.
The Board has scheduled its 2014 meeting dates for the second Friday of each month. With one exception, the meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The next meetings will be on May 9, June 13, and July 11, 2014. The May 9 meeting will be held in Omaha at the Omaha Public Power District’s headquarters, followed by the Board taking a tour of Walter Scott Unit 4 in Council Bluffs.
Vice Chairman Reida moved to adjourn the meeting. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – absent, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0. The meeting was adjourned at 10:56 a.m.
Timothy J. Texel
Executive Director and General Counsel