Note: These minutes are in draft form pending approval by the Board at its next public meeting.
Minutes of the 761st Meeting
January 23, 2015
The 761st 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. Haase and Mr. Morehouse. Mr. Grennan had informed the Board at the previous meeting that he would be out of the State on January 23 and thus would not be able to attend the January meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on January 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 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 December 12, 2014, meeting. There was one noted change in the third to last paragraph. In the last sentence, the word “there” should be “the”. Mr. Haase moved to approve the minutes with the correction indicated. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida –abstain, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 3 – 0 with one absent and one abstaining. Vice Chairman Reida explained that he abstained because he was absent from the December 2014 meeting.
The next agenda item was acceptance of the expense report for the month of December. The expenses were $20,548.91 in personal services, $200,597.05 in operating expenses, and $710.92 in travel expenses. The total expenses were $221,856.88. Executive Director Texel explained that the operating expenses category was substantially higher than normal because The Brattle Group was paid $185,000 for completing the Nebraska Renewable Energy Export study, in accordance with the contract. Mr. Haase moved to accept the expense report. Vice Chairman Reida seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider Perennial Public Power District’s Petition for charter amendment 4. The Petition was filed on October 28, 2014. The purpose of the amendment is to remove unneeded language and correct inconsistencies in the district’s chartered territory when compared with the chartered territory stated in the district’s neighboring utilities. In addition to not matching the chartered territory stated in the charters for its neighboring districts, the description of Perennial PPD’s territory described in its charter did not match up with the PRB’s retail service area map for the district. Perennial PPD’s current charter states that Perennial PPD’s chartered territory consists of all of York County except the City of York, and all of Fillmore County except the City of Geneva. However, Perennial PPD’s retail service area extends a short distance into Hamilton, Clay and Seward Counties. There are also small areas of York and Fillmore County that are part of other utilities’ retail service areas. Perennial PPD agreed to correct the text of the charter to describe the areas of the other counties that the District does not serve, and to include the parts of the other counties that the District does serve. Perennial PPD also took the opportunity to remove the list of its directors from its charter. This is not unusual. Many power districts are removing the list of directors to avoid the need to amend the list every time an amendment is submitted. The list of directors was required to be included when the original petition for creation was filed, but there is no requirement to keep the list in the charter after the petition to create the district is approved. Perennial included exhibits along with the Petition that describe the territory involved in Hamilton, Clay and Seward counties. The PRB is required by statute to publish the notice in at least two local newspaper for three consecutive weeks. The notice included the sections of the charter that was to be amended, and the procedure for any member of the public who wanted to file a protest or objection to the amendment. The notice was published in the York Times and Nebraska Signal on November 12, 19, and 26, 2014. The Board did not receive any protests or objections concerning Perennial PPD’s Petition for charter amendment 4. It is the Board’s procedure to waive a hearing if there is no protest or objection. Mr. Morehouse moved to waive the hearing and approve Perennial Public Power District’s Petition for Charter Amendment 4. Vice Chairman Reida seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider application SAA 357-15-A. This is a joint application submitted by the Seward County Public Power District and the Norris Public Power District. The application was filed on January 2, 2015. The application requests the transfer of two loads or customers from Norris PPD to Seward County PPD. The customers are located in Seward County PPD’s service area but have been served by Norris PPD since the creation of the original service area maps. Therefore, these loads are indicated as part of Norris PPD’s service area on the current service area map. SAA 357-15-A requests to remove these exceptions on the service area map. Exhibit A shows where the loads are located. The service area boundary line is not affected by this amendment. Mr. Haase moved to approve SAA 357-15-A. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider the Motion to Dismiss Complaint C-50. Rob Robertson filed a formal complaint against Nebraska Public Power District under Neb. Rev. Stat. section 70-604.05. The complaint alleged that NPPD’s charter does not comply with Nebraska law and must be amended to bring it into compliance. An evidentiary hearing was held November 14, 2014. On December 18, 2014, prior to the Board issuing its decision, Complainant filed a Motion to Dismiss the Complaint. Attached as an exhibit was a settlement agreement. The parties agreed to settle the matter without the PRB having to issue a ruling on the matter. As part of the agreement, NPPD agreed to amend its charter prior to December 31, 2015. The amendment will remove from NPPD’s chartered territory the areas in Lancaster, Adams and Hall counties that are outside the city limits of Lincoln, Hastings and Grand Island, but are part of the local municipalities’ retail service area. The PRB’s Rules of Practice and Procedure state that a party shall not be permitted to withdraw an application or pleading without the Board’s approval. The executive director recommended to the Board that the motion be without prejudice, as the parties agreed to in the settlement agreement. Vice Chairman Reida moved that the Board approve the Motion to Dismiss complaint C-50 without prejudice. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider the Motion to Withdraw the Rattlesnake Creek Wind Project, designated as PRB-3779-G. This application is for a proposed either 100 or 200 megawatt wind generation facility in Dixon County. The applicant filed the application on October 28, 2014. The facility would be located east and south of the Village of Allen. The Applicant was not able to secure a power purchase agreement for the proposed wind farm. As with the previous agenda item, the PRB’s rules state that a party shall not be permitted to withdraw an application or pleading without the Board’s approval. The executive director recommended the motion be without prejudice. Vice Chairman Reida moved that the Board approve the Motion to Withdraw PRB-3779-G without prejudice. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider application PRB-3786-G. A hearing is scheduled for this application later today. The executive director explained to the public present the process that would be followed. The Board will recess its public meeting and convene the evidentiary hearing on PRB-3786-G. When conducting the evidentiary hearing, the Board will be acting in its quasi-judicial capacity, which is similar to a court. After the conclusion of the hearing, the Board may deliberate. The Board will then reconvene its public meeting and may make a decision on the application, but that is not certain. The Board may take the matter under consideration and issue a written decision at a later date. Since the Board is acting in its quasi-judicial capacity during the hearing and deliberations, the general public does not have the ability to comment on the applications involved in the hearing. To participate in the hearing, a person or entity would have had to file a Petition for Intervention or a Protest. All Board members agreed to table application PRB-3786-G until after the hearing could be held. The Board then recessed its public meeting at 9:42 a.m. to conduct the scheduled hearing.
The Board reconvened its public meeting at 11:03 a.m. All members that were present prior to the recess were again in attendance. During the recess the Board had conducted the evidentiary hearing on PRB-3786-G. Application PRB-3786-G was filed by Prairie Breeze Wind Energy II to request authority to construct a 73.5 megawatt wind generation facility in Antelope and Boone counties. The application was filed on January 2, 2015. The total estimated cost is $125,000,000. It is estimated to be completed in December 2015. The Board sent a written notice to all parties that the Board deemed to be potentially interested in the application. A public notice was also published in two local newspapers with general circulation in the project area. The notice was published in the Petersburg Press and the Elgin Review on January 15. No Petitions for Intervention or objections were filed. Executive Director Texel stated that the Board consulted with the Nebraska Game and Parks Commission as required by Nebraska Revised Statute section 37-807(3). In a letter dated January 22, 2015, the Commission noted that the project area is in the range of the endangered whooping crane, western prairie fringed orchid, small white lady’s slipper and the river otter. Prairie Breeze has agreed to certain mitigation measures, such as site surveys to determine if the species are present prior to construction. Based on Prairie Breeze’s mitigation agreements, the Commission determined that the application “may affect, but is not likely to adversely affect any state-listed endangered or threatened species.” The Commission did not object to the PRB’s approval of the application. Vice Chairman Reida moved to approve application PRB-3786-G. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one absent.
The next item on the agenda was the executive director’s report. The Board members had a copy of the December activities update from JK Energy Consulting regarding its SPP activities. The Chairman discussed the issue of the benefit to cost ratio, on which SPP is currently working. The minimum required ratio that is being used is .8 (each utility must receive at least eighty cents in benefits for each dollar it contributes to SPP projects), but there are concerns about the returns for utilities like Lincoln Electric System that are currently below that ratio.
The executive director then discussed some of the legislative bills that may effect or be of interest to the PRB.
LB177 was introduced by Senator Haar. This bill would prohibit public power district employees from serving as directors on any public power district board. The current law only prohibits a public power district employee from serving on the board where the employee works. This bill was referred to the Government, Military and Veterans Affairs Committee. The Board took no position on LB 177.
LB 209 was introduced by Senator Hilkemann. The requires all political subdivisions to go to mediation prior to commencing litigation against another political subdivision. Executive Director Texel told the Board he was concerned because the bill does not define the term “litigation”. He would also like the bill to include a provision exempting political subdivisions from the Act if there is an existing administrative remedy available to the entities designed to mediate or decide disputes between political subdivisions. The Board is specifically designed to resolve disputes involving utilities, almost all of which are either public power districts or municipalities. It is not clear if the Act would require these entities to go to mediation prior to filing a complaint or application with the Board. As written, the language would require that a public power district or municipality would have to go to mediation prior to appealing a decision of the PRB, as that would appear to be “litigation.” How could a utility appeal the Board’s decision within 30 days as is required if it must go through mediation first? The executive director stated that he spoke with Senator Hilkemann and raised these concerns. Senator Hilkemann was agreeable to adding a definition of “litigation” and adding an exemption from the Act in instances where an administrative remedy already exists. This bill was referred to the Judiciary Committee. The Board authorized the executive director to testify in a neutral capacity to raise the concerns mentioned.
LB 282 was introduced by Senator Baker. This bill amends the open meetings law relating to closed sessions. It allows public bodies to go into closed sessions to evaluate job performance of an employee or non-elected official if that person has not requested it to be open. The current law says the closed session is only allowed to prevent needless injury to reputation of the person. This bill was referred to the Government, Military and Veterans Affairs Committee.
LB 407 was introduced by Senator Ken Haar. This bill amends the certified renewable export facility statute. The bill was referred to the Natural Resources Committee. The bill removes several requirements from the Certified Renewable Export Facility approval process. It removes the requirement that an applicant offer up to 10% of the facility’s output to Nebraska’s public power utilities, removes the requirement that the applicant have a power purchase agreement with a customer outside Nebraska for 90% of the facility’s output, removes the stranded asset definition, removes the requirement that the applicant have a memorandum of understanding or other written indicia that they are negotiating with a customer for a power purchase agreement, and repeals the right of first refusal for transmission facilities in section 70-1028. The Board did not take a specific position on LB 407.
LB 412 was introduced by Senator Mello. This bill amends the Community Base Energy Development (C-BED) statutes. The bill was referred to the Natural Resources Committee. The bill would limit the county boards that have to express support for a C-BED project to those that have adopted zoning regulations requiring approval of a C-BED project. It would also require that developers provide notice of the incentives for local ownership in a C-BED project to each person that owns property where a turbine will be located, as well as to the elected governing body of each municipality or other political subdivision in whose jurisdiction a turbine will be located.
LB 423 was introduced by Senator Nordquist. This bill changes the renewable energy tax credit for C-BEDS. C-BED developers would be able to choose between an increased renewable production tax credit or a one-time tax credit equal up to thirty percent of the total cost of the facility. This bill was referred to the Revenue Committee.
LB 424 was introduced by Senator Davis. This bill amends the provisions relating to nameplate capacity tax. It expands the tax to all renewables instead of only wind facilities. It also creates an exemption for depreciable tangible personal property used to generate electricity using renewable energy sources for facilities at or over 100 kilowatts.
LB 432 was introduced by Senator Baker. This bill amends the Public Records Act. The bill would eliminate the right of members of the public to make copies of government documents using their own photocopying equipment, would allow copies of records to be provided in print or electronic format if the requestor can receive them in either form, and eliminates a provision that copies are not required to be made if copying equipment is not reasonably available. This was referred to the Government, Military and Veterans Affairs Committee.
LB 462 was introduced by Senator Seiler. This bill changes restrictions on campaigning by public officials. This is a new version of a similar bill that was introduced last year in reaction to an Accountability and Disclosure Commission decision. The general manager and another employee at the Northwest Rural Public Power District ran public service announcements in a local radio station concerning wind power. Some of the comments contradicted what a person running for the Northwest Rural PPD’s board of directors had said publicly about wind power. The Accountability and Disclosure Commission essentially found that whenever a public official makes a statement contradicting a statement made by a person running for elected office, the public official is engaged in “campaigning” and if any public funds were used in conjunction with making the statement at all, the public official can be fined up to two thousand dollars. The executive director believes the decision is an example of hard cases making bad law. The Accountability and Disclosure’s decision was extremely broad and far-reaching. As he reads the Commission’s decision, if the executive director or any PRB member would make any statement about any generation or transmission resources that contradicted any statement made by any person who was a declared candidate for any elected office in the State, they would open themselves up to being fined by the Commission. Last year the executive director testified in his capacity as a State official and in his personal capacity about the ramifications of this overly broad decision and the need to narrow its scope through legislation. He clarified that he was not testifying for the Power Review Board. He told the Board he planned to testify similarly on LB 462. The Board members indicated they were fine with him testifying with the clarification that he was not testifying for the PRB. This bill was referred to the Government, Military and Veterans Affairs Committee.
LB 469 was introduced by Senator Smith. This bill requires that the Nebraska Department of Environmental Quality study and develop a state plan for regulating carbon dioxide emissions. The bill was referred to the Natural Resources Committee.
LB 475 was introduced by Senator Davis. This bill amends the PRB jurisdiction under 70-1012. As written the bill limits the PRB approval jurisdiction to generation facilities that would increase the capacity of existing facilities or to facilities that have a total cost in excess of $150 million. This was not what was intended by Senator Davis. The intent of the bill was to clarify that the PRB must approve of all upgrades to existing facilities when the result would be an increase in capacity, or when a project at an existing or new generation facility exceeds $150 million. Senator Davis’ office told the executive director an amendment would be submitted to correct the mistake. The bill was referred to the Natural Resources Committee. The Board authorized the executive director to testify that the Board has no position on the bill if the proposed amendment is adopted.
LB 536 was introduced by Senator Ken Haar. This bill requires all public power suppliers in the State to submit an annual report to PRB. The bill sets out a list of information that must be included in the report. The bill requires the PRB to make the reports available on the Board’s website. The data base information must be searchable and allow comparisons between the information provided by public power suppliers. Nebraska Interactive was contacted in order to obtain an estimate as to what it might cost to create such a system. Based on what staff was told, the executive director submitted a fiscal note for $60,000 in the first year, and $10,000 for following years for maintenance. Executive Director Texel expressed concern that some of the terms were not defined, that some of the required information is already available on the PRB’s website (such as service area maps), and that it would likely be very difficult to obtain the information from smaller utilities such as villages. The Board authorized the executive director to testify on LB 536 in a neutral capacity to express the concerns raised by the executive director. The bill has not yet been referred to a committee.
LB 583 was introduced by Senator Schilz. This bill requires the Energy Office to develop a state energy plan. The bill has not yet been referred to a committee.
The Board previously scheduled its 2015 meeting dates for the fourth Friday of each month unless otherwise specified. The next meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall, Lincoln, Nebraska on February 27, March 27, and April 17, 2015. The executive director noted that April 17 is the third Friday of the month due to the State holiday of Arbor Day on April 24.
The Board took up elections for its Chair and Vice Chair for 2015. Vice Chairman Reida nominated Mr. Lichter to continue as Chair. Mr. Morehouse nominated Mr. Reida as the Vice Chair. Mr. Haase seconded both nominations. The Board voted to adopt the slate by unanimous acclamation.
Mr. Morehouse moved to adjourn the meeting. Mr. Haase seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – absent, Mr. Haase – yes, and Mr. Morehouse –yes. The motion carried 4 – 0 with one absent. The meeting was adjourned at 11:47 a.m.
Timothy J. Texel
Executive Director and General Counsel