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

Minutes

Minutes of the 757th Meeting

September 12, 2014

The 757th 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, and Mr. Grennan. Mr. Morehouse had informed the Board at last month’s meeting that he would not be in attendance at the September 12 meeting due to a business commitment. Mr. Haase had informed the Board’s staff that he had a business engagement that would not permit him to attend the meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on September 2, 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 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 August 8, 2014, meeting. The staff did not have any recommended changes. Vice Chairman Reida moved to approve the minutes. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent.

The next agenda item was acceptance of the expense report for the month of August. The expenses were $21,998.25 in personal services, $29,479.36 in operating expenses, and $1,923.85 in travel expenses. The total expenses were $53,401.46. Executive Director Texel explained that the operating expenses were higher than usual because a payment was made to GIS Workshop for the new contract to maintain the electronic service area maps and the online interactive map. In addition, a payment of $5,000 had also been made to The Brattle Group upon signing the Nebraska Renewable Energy Export Study (LB 1115) contract, as was required by the contract. The Board had also paid its Southwest Power Pool (SPP) consultant, JK Energy Consulting, an additional $1,750 above its normal contract payment to prepare for and attend the Regional State Committee’s annual retreat. The annual retreat was beyond the scope of the contract with JK Energy Consulting. Mr. Grennan moved to approve the minutes. Vice Chairman Reida seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent.

The next item on the agenda was to consider delegating approval authority for additional projects for JK Energy Consulting to either the chairman or the executive director. This pertains to the consultant position to represent the PRB and Nebraska on the SPP’s Cost Allocation Working Group and act as the advisor to the PRB’s RSC member. At last month’s meeting the board voted to approve a one-year renewal of the contract that ends December 31, 2014. During the August meeting the Board talked about the work that JK Energy Consulting was doing that was beyond the duties set out in the original request for proposals, and how to handle the process to approve any additional work and compensate JK Energy for it. State Purchasing Bureau added an addendum was to the current contract to include payment for additional duties at the hourly rate set out in JK Energy’s original proposal. But the additional work needs to be approved. Executive Director Texel explained that the Board had been approving the extra work and compensation for it. Unfortunately, since the Board meets monthly there is not always time to have the Board vote on these extra meetings. Sometimes the SPP or RSC sets up a special meeting to be held prior to the next PRB meeting. That puts JK Energy in a position where it would attend an extra meeting prior to the Board voting to authorize payment for the additional work. Chairman Lichter would like the Board to vote on the additional work and payment when possible, but when time is short he would like to delegate approval authority to the chairman or the executive director, depending who was available. This would allow Mr. Krajewski to know that when he attends an additional meeting he would be compensated for his time. Chairman Lichter stated that largely due to the Environmental Protection Agency’s proposed new regulations under 111(d) of the Clean Air Act, the RSC has been meeting monthly, and he would like to have the consultant advise him and participate in the meetings. Executive Director Texel said he had contacted the State Purchasing Bureau, which told him that the payments were authorized under the contract, but the procedure for approving the work and the compensation was entirely up to the Board. Executive Director Texel recommended that the Board move to approve that the Board delegate to the Chairman or the executive director the authority to approve additional work to be performed by JK Energy Consulting under Amendment 3 to Contract 47077 04 when, in their discretion, there is insufficient time for the full Power Review Board to authorize such work. Vice Chairman Reida so moved. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent.

The Board members agreed to table the next two agenda items, PRB-3774 and PRB-3777-G, until after a hearing could be held on each application later today. These applications were set for hearing on the same morning as the public meeting, and will be considered after the conclusion of the evidentiary hearings.

The next item on the agenda was to consider approval of the costs for the executive director and general counsel to attend the Nebraska Bar Association’s Government Practice Section legal seminar. The seminar will be held as part of the Nebraska State Bar Association’s annual meeting at the Conference Center in La Vista, Nebraska on October 9, 2014. The costs would include the registration expense of $90 and mileage. Executive Director Texel estimated the total for the expenses would be around $150. Vice Chairman Reida asked if he could also attend the seminar. The executive director said that was certainly allowable, as the Government Practice Section seminar was useful to all government attorneys. He recommended that the Board include approving the expenses for the Board’s attorney member along with the expenses for the executive director and general counsel. Chairman Lichter moved to approve the travel and registration costs for the executive director and the Board’s attorney member to attend the Government Practice Section’s legal seminar to be conducted as part of the Nebraska Bar Association’s annual meeting. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent.

The next item on the agenda was the executive director’s report. The Board members had a copy of the current month’s update from JK Energy Consulting regarding its SPP activities. Chairman Lichter stated that the Environmental Protection Agency’s proposed air emissions rule change is a major topic and comments are due to the EPA in October. Also, on Tuesday, September 9, 2014 SPP made its filing with FERC to accomplish the Integrated System (IS) change where the Western Area Power Administration and two utilities would join the SPP. August 2015 is the target date for the IS to become part of SPP. The Board also discussed the status of the SPP benefits for utility members. There are still several members who are in a deficit with regard to the benefit to cost ratio. LES is one of the SPP members still in a deficit. That means the utility is receiving less than $1.00 in benefit from being a SPP member for each $1.00 the utility pays to be a member of SPP.

Executive Director Texel then updated the Board on the Request for Proposals (“RFP”) required by Legislative Bill 1115. The RFP was awarded to The Brattle Group. The final contract negotiations are completed and the necessary paperwork has been signed. The contract is now in place. The Brattle Group is required by the RFP to provide a monthly written progress update to the Board. The first progress report is in the Board’s notebook and is dated September 3. The Brattle Group also wants to have bi-weekly calls with the executive director to discuss any issues or questions. Mr. Grennan will also take part in the bi-weekly calls. Mr. Grennan asked the chairman if he would prefer to participate in the calls instead of him. Chairman Lichter thought it would be fine for Mr. Grennan to be on the calls.

As the Board had requested, the Nebraska Power Association has agreed to give the Board a presentation on the EPA’s proposed new regulations under 111(d) of the Clean Air Act. The presentation will be given at the Board’s October 10 public meeting.

Mr. Grennan informed the Board that he has agreed to speak at a conference covering renewable issues. It will be held in Minneapolis, Minnesota on September 26. There will be a number of utility commissioners from other states attending the conference.

The Board scheduled its 2014 meeting dates for the second Friday of each month. The next meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall, Lincoln, Nebraska on October 10, November 14, and December 12, 2014.

The executive director then explained to public present at the meeting the process that would be followed to recess the Board’s public meeting and convene the evidentiary hearings on PRB-3774 and PRB-3777-G. When conducting the evidentiary hearings, the Board will be acting in its quasi-judicial capacity similar to a court. After the conclusion of the hearings, the Board will deliberate and may give its decision when the public meeting reconvenes. Since the hearings will be conducted in the Board’s quasi-judicial capacity, the general public does not have the ability to comment on the applications involved in the hearings. To participate in the hearings, a person or entity would have had to file a Petition for Intervention or a Protest. The Board then recessed its public meeting at 10:35 a.m. to conduct the scheduled hearings.

The Board reconvened its public meeting at 2:00 p.m. All Board members that were present prior to the meeting were again present. The first agenda item addressed was application PRB-3774. This is the application filed by the Nebraska Public Power District to construct 220 miles of 345 kilovolt transmission line. There were numerous entities that had filed Petitions for Intervention and Motions for Continuance. Executive Director Texel explained that the Board granted the Petition for all but one of the requested Intervenors. In the one that was denied, the requesting party did not own property or operate a business inside the project corridor in which the Applicant stated the proposed transmission line would be located. All other Intervenors either owned land or operated a business inside the project corridor. The hearing officer had granted the Intervenor’s motion for a continuance, but for approximately 30 days instead of the requested 60 days or more. The continuance had been granted to October 10, in conjunction with the Board’s next scheduled public meeting. At that time the Board will hold an evidentiary hearing on the merits of the application.

The next item remaining on the agenda was PRB-3777-G. This is an application filed by the Cottonwood Wind Project, LLC, for a 89.5 MW wind turbine generation facility. The application was filed on August 29, 2014. The location of the proposed wind facility is approximately three miles south of the City of Blue Hill, in Webster County, Nebraska. All interested parties were sent a written Notice of Filing and Hearing Date. Among the list of entities are those power suppliers within approximately 50 miles of the proposed facility that own any generation resources. A Public Notice of the hearing and opportunity to intervene was published on Thursday, September 4, 2014, in the Blue Hill Leader newspaper. The Board received a Petition for Intervention from the Omaha Public Power District and the Nebraska Public Power District. Both entities were allowed to intervene. The application was filed pursuant to Neb. Rev. Stat. 70-1014. The approval criteria under this statute states that the evidence must be sufficient for the Board to find that 1) the application will serve the public convenience and necessity, 2) that the applicant can most economically and feasibly supply the electric service resulting from the proposed construction, and 3) without unnecessary duplication of facilities or operations. As required by Neb. Rev. Stat. section 37-807(3), the Board consulted with the Nebraska Game and Parks Commission to determine whether the approval might harm any threatened or endangered species or their critical habitat. The Commission’s reply letter was submitted into evidence at the hearing. The Commission had identified several mitigation measures the applicant should take to minimize the potential impact on threatened or endangered species in the area. The Applicant is an agreement with the Commission’s recommendations. Vice Chairman Reida moved to approve PRB-3777-G with the condition that the applicant sign a Power Purchase Agreement with the Nebraska Public Power District prior to commencing construction, and also subject to applicant’s compliance with the protective measures set out in the Nebraska Game and Parks Commission’s consultation letter regarding PRB-3777-G. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent.

Vice Chairman Reida moved to adjourn the meeting. Mr. Grennan seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – yes, Mr. Haase – absent, and Mr. Morehouse – absent. The motion carried 3 – 0 with two absent. The meeting was adjourned at 2:07 p.m.

________________________________

Timothy J. Texel

Executive Director and General Counsel

Nebraska Power Review Board
301 Centennial Mall South
P.O. Box 94713
Lincoln, NE 68509-4713
PH: (402) 471-2301
Fax: (402) 471-3715

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