Note: These minutes are in draft form pending approval by the Board at its next public meeting.
Minutes of the 750th Meeting
February 14, 2014
The 750th 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, Mr. Haase, Mr. Morehouse, and Mr. Siedschlag. Vice Chairman Reida had informed the Board several months ago that he would not be available for this meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on February 4, 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.
Executive Director Texel announced that Governor Heinemann had appointed Dennis Grennan of Columbus, Nebraska, to replace Mr. Siedschlag as the PRB’s designated engineer member. Mr. Grennan’s confirmation hearing before the Natural Resources Committee was held on Friday, February 7. It is expected that the full Legislature will vote on Mr. Grennan’s confirmation early next week, probably on Tuesday, February 18. Mr. Grennan attended the PRB meeting and sat in the audience to observe.
The Board first considered the draft minutes from its January 10, 2014, meeting. The staff did not have any recommended changes. Mr. Haase moved to approve the minutes. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – yes. The motion carried 4 – 0 with one absent.
The next agenda item was acceptance of the expense report for the month of January. The expenses were $18,689.22 in personal services, $40,025.92 in operating expenses, and $1,200.53 in travel expenses. The total expenses in January were $59,915.67. The executive director explained that the expenses were higher than usual due to the payment of $25,000 to GIS Workshop for completion of the online interactive service area map project. Mr. Siedschlag moved to accept the expense report. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – 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. The petition was filed on November 15, 2013. The purpose of the amendment is to make technical changes and address some relatively minor discrepancies that were discovered in the District’s charter subsequent to amendments approved by the PRB as part of Charter Amendment 6. Notice of the proposed amendments was published on January 8, 15 and 22, 2014. The PRB is required to publish notice in two local newspapers for three consecutive weeks. Due to the size and scope of NPPD’s territory, NPPD requested to have the notice published in six newspapers. The newspapers were the Columbus Telegram, Lincoln Journal Star, North Platte Telegraph, Chadron Record, Crawford Clipper, and Fremont Tribune. The notice explained that any interested party could file a protest or objection prior to the PRB’s meeting on February 14. The PRB did not receive any protests or objections. The executive director recommended the Board waive the hearing and approve NPPD’s Petition. Mr. Morehouse moved to waive the hearing and approve Nebraska Public Power District’s Petition for Charter Amendment 7. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – yes. The motion carried 4 – 0 with one absent.
The next agenda item was to designate the PRB’s new representative on the Southwest Power Pool’s (“SPP”) Regional State Committee (“RSC”). If a state has utilities that are transmission-owning members in the SPP, that State’s regulatory agency with jurisdiction over electric utilities is entitled to designate a Commissioner or Board member to be a member of the SPP’s RSC. Mr. Siedschlag has been the PRB’s representative to the RSC since 2009. The designated Board member is able to vote at the SPP RSC meetings, and designate a proxy when he or she is unable to attend. Chairman Lichter thanked Mr. Siedschlag for his continuous role in representing Nebraska at the RSC meetings since 2009. Mr. Morehouse also stated that Mr. Siedschlag had a huge role in the RSC as the Board’s representative and expressed his thanks and appreciation. Mr. Siedschlag moved to appoint Chairman Lichter as the PRB’s new designated SPP RSC representative. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – yes. The motion carried 4 – 0 with one absent.
The next agenda item was to re-consider the amendments to Board Policy 9 adopted at the January 10, 2014 meeting. Board Policy 9 authorizes the payment of the executive director and general counsel’s dues in the Nebraska Bar Association and dues in certain other legal organizations. On December 6, 2013, the Nebraska Supreme Court issued a decision in In re Petition for a Rule Change to Create a Voluntary State Bar of Nebraska. The Supreme Court decided the Bar would remain mandatory, but could only charge a mandatory assessment for its most basic core functions. Previously the dues were approximately $275. The Court determined that only $38 of that amount related to the Bar’s core functions and was therefore mandatory. There are also separates charges for the costs related to the counsel for discipline and the unauthorized practice of law that come to $60. The total amount for the mandatory assessment was set at $98, effective January 1, 2014. The Bar then notified all members that they had to decide by December 23, 2013, if they were going to pay the voluntary dues and mandatory assessment, or only the mandatory assessment. Members not paying the voluntary dues would be stripped of all benefits, other than their membership card allowing them to practice law, on January 1, 2014. After consultation with the Board’s attorney member, Frank Reida, and Chairman Siedschlag, it was determined that the PRB would only pay the mandatory $98, but not the voluntary $275. Unfortunately, due to the December 23 deadline, there was not time to place the matter on the agenda for the full Board to consider. Since the PRB had already submitted payment of the full Bar dues prior to December 23, it was decided the Bar should refund the voluntary amount to Executive Director Texel, who will then immediately reimburse the State for that amount. Although Chairman Lichter expressed a desire to table the decision, the PRB needed to amend its policy in order to provide authority for the payment and reimbursement. Then on February 4 the Bar Association sent a second letter stating that members had not been stripped of all membership benefits on January 1, but instead retained their membership rights until February 7. Executive Director Texel explained that he had been on the executive committee for the Bar’s Government Practice Section, and so had not been removed from that position on January 1 as he assumed. The executive director notified Chairman Lichter about this development, and Chairman Lichter asked the executive director to place the matter on the agenda at the February meeting to reconsider the previous policy change in light of this new development. An amendment to Board Policy 9 authorizing payment of the executive director and general counsel’s voluntary bar dues was drafted for the Board to consider. Chairman Lichter said that he believed the Board receives an important benefit by having its general counsel on the Bar’s Government Practice Committee, and it is also important for the Board’s counsel to have access to the Bar’s directory of attorney members and government officials. He acknowledged that Vice Chairman Reida had been concerned that the Bar Association could take a position that was contrary to the PRB’s position or to the electric industry’s position. He agreed that would be unfortunate, but he believed the chances of that happening were very slight. If that were to happen, the Board could change its policy again and not pay the general counsel’s voluntary dues. Mr. Siedschlag said he did not have a problem with the proposed policy change to pay the voluntary dues, especially in light of the new developments. It was unfortunate when the initial decision was made that there was very little time to react. Mr. Haase moved to approve the amendments to Board Policy 9 that would authorize the Board to pay the executive director and general counsel’s voluntary bar dues, in addition to the mandatory assessment. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – 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 the update on Southwest Power Pool activities. The Board had been provided a copy of JK Energy Consulting’s monthly activities update, and a copy of the update was in each Board member’s notebook. Mr. Siedschlag told the Board he was the Chair of the RSC’s Rate Allocation Review Task Force. He asked if the Board would be all right if he continued to work on the RARTF as the PRB’s representative for the next month or so while some issues he had been working on came to final resolution. It is expected that the RARTF would complete its task in March. The other Board members stated that Mr. Siedschlag has been a significant presence on this task force, partly due to his longevity on the RSC. The Board members agreed that it is essential to the Board and the RSC that Mr. Siedschlag completes this duty on the RARTF. Chairman Lichter stated that he did not believe it would be a problem for Mr. Siedschlag to continue on the RARTF. Executive Director Texel added that as long as the RSC was fine with Mr. Siedschlag continuing in this capacity, it should not present a problem. Chairman Lichter and Mr. Siedschlag had attended the quarterly RSC and SPP Board of Directors meetings on January 27 and 28. Mr. Krajewski then briefly addressed the Board. He provided the Board with further information about the recent RSC and SPP Board meetings and expressed that he was looking forward to working with Chairman Lichter as the PRB’s RSC representative.
The executive director then provided an update on the online interactive service area map. A letter was sent to all Nebraska power suppliers notifying them that the map was available on the Board’s website, and recommending that each supplier review the boundary shown for it on the map and notify the Board about any discrepancies. Several utilities have already pointed out minor errors with the boundary lines. Many of the errors so far related to service area agreement amendments that were not included on the online map. There were also some misspellings and areas that were mislabeled. The Board’s contractor for the project, GIS Workshop, has been updating the map as errors are identified. Overall, the interactive mapping project has had very positive reviews. Several utilities have asked for shape-files so the utility can overlay its boundary map on the Board’s online map to identify discrepancies easier. When a utility requests this file, the Board’s staff will notify GIS Workshop of the request and authorize the release of the information to the utility.
The next item was the Legislative update. The executive director reminded the Board that the 2014 Legislative session began on Wednesday, January 8. He reported on several bills that 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.
LB 718 (introduced by Senator Crawford) would amend the Administrative Procedure Act to require each agency to twice each year prepare an agenda of rules and regulations that are to be amended. One agenda is due 30 days after the Legislative session ends, while the other is due on October 15. The agenda must also include what rules and regulations are under development or review. New rules or regulations, or amendments to existing ones, could not be approved unless they had been placed on the agenda. The bill is still before the Government, Military and Veterans Affairs Committee.
LB 719 (introduced by Senator Crawford) requires agencies to prepare a written report summarizing the testimony at the public hearing on the new or amended regulations, include a list of issues and questions 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 General File on February 4.
LB 720 (introduced by Senator Crawford) adds that any member of Legislature, governing body of political subdivision, or citizen with 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 being held by the Executive Board.
LB 965 (introduced by Senator Ken Haar) is the “externalities” bill. The PRB would have to give consideration to a list of costs and benefits when approving generation or transmission facilities, including the cost of regulatory compliance, health impacts of the proposed facility, water usage costs, and environmental impacts including the cost of climate change. Executive Director Texel said he was told by Senator Haar’s office that the intent is to have the PRB “check off” on each of the factors, in order to make sure the applicant has considered each of the listed additional factors. The PRB would not be expected to conduct research into the cost of the externalities, but rather only confirm that the utilities performed that analysis as part of the application process. However, the executive director believed it would take an amendment to the bill’s existing language to clarify that the PRB would not be expected to conduct a review of the additional factors. The hearing was held before the Natural Resources Committee on January 31. The bill is still in Committee.
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 hearing on this bill before the Government, Military and Veterans Affairs Committee is set for February 20.
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. The hearing before the Natural Resources Committee was held on February 13. Several entities and individuals testified in support, and numerous public power officials testified in opposition.
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 consulting with a working group of stakeholders. Executive Director Texel stated that he testified in a neutral capacity asking that if the bill is moved to General File, AM 1790 be included. Senator Davis introduced AM 1790 after it was discovered that the wording in the bill would require the PRB to pay for the study using its cash funds, meaning it would have to assess Nebraska’s public power utilities to fund the study. The intent was to fund the study through a general fund appropriation, and AM 1790 corrects the language. This bill seems likely to move forward quickly, but for now is still being held by the Natural Resources Committee.
The Board briefly discussed transmission issues and the lack of knowledge concerning transmission issues on the part of the general public. Chairman Lichter stated that a report on transmission might assist the PRB in trying to educate people about issues such as the difference between the eastern and western interconnections, the SPP transmission markets, wind generation, and availability of transmission.
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 March 14, April 4, and May 9, 2014. The April meeting was moved to the first Friday in April in order to accommodate NPPD CEO Pat Pope’s schedule so he could give a presentation to the Board on resource adequacy. The May 9 meeting will be held in Omaha at Omaha Public Power District’s headquarters.
Mr. Morehouse moved to adjourn the meeting. Mr. Siedschlag seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – absent, Mr. Haase – yes, Mr. Morehouse – yes, and Mr. Siedschlag – yes. The motion carried 4 – 0 with one absent. The meeting was adjourned at 10:57 a.m.
Timothy J. Texel
Executive Director and General Counsel