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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 781st Meeting

January 27, 2017

The 781st 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 January 17, 2017. All background materials for the agenda items to be acted on had been provided to all Board members prior to the meeting and a copy 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 December 16, 2016, meeting. The staff did not have any recommended changes. Mr. Morehouse 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 – abstain, and Mr. Morehouse – yes. The motion carried 4 – 0 with one abstaining.

The next agenda item was acceptance of the expense report for the month of December. The expenses were $20,963.02 in personal services, $19,291.16 in operating expenses, and $396.36 in travel expenses. The total expenses were $40,650.54. Executive Director Texel explained why the report showed a different amount in travel expenses than he had announced. Since Mr. Grennan’s travel expenses to attend Southwest Power Pool (SPP) activities are paid by the Board then later reimbursed by the SPP, when the funds are received from SPP they are credited against the account and make it appear that there was income in the travel expense category. The $396.36 and the total expenses were with the reimbursed funds subtracted out. Vice Chairman Reida moved to accept the expense report. 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 item on the agenda was to consider application PRB-3846-M. This is an application filed by the Twin Valleys Public Power District requesting approval to add an additional microwave communication facility in its service area. The application was filed on December 12, 2016. The cost for the project was estimated at $6,578.37. The Board previously approved an application for Twin Valleys PPD to construct a microwave communication facility. The original application was filed in August 2012, and was designated PRB-3692-M. In the original application, Twin Valleys PPD allowed Cambridge Telephone Co. to provide the communications services at two locations, the Cambridge and Medicine Creek substations. Then in October 2013 Twin Valleys PPD filed another application to take over the communications service at the Medicine Creek substation due to the service being available only 82% of the time. That application was designated PRB-3738-M, and was approved. In the present application, PRB-3846-M, Twin Valleys PPD now is requesting to remove the cellular communication system at the Cambridge substation and replace it with its own microwave communications system. The service at the Cambridge substation has had to be rebooted numerous times and the equipment has been replaced by the Cambridge Telephone Company several times.

Pursuant to the requirements in Neb. Rev. Stat. 70-1021, notice of the application and an opportunity to file an objection or protest was sent via certified mail to all potentially interested regulated telecommunications carriers. The Board sent notice to telecommunications companies registered with the Nebraska Public Service Commission operating in the Twin Valleys PPD’s service area or in counties served by Twin Valleys PPD. Notice was sent to the following carriers: CenturyLink QC, headquartered in Minneapolis, Minnesota; Great Plains Communications, headquartered in Blair, Nebraska; Arapahoe Telephone Company, headquartered in Arapahoe, Nebraska; Rural Telephone Services, Co., Inc., headquartered in Lenora, Kansas; Cambridge Telephone Company, headquartered in Cambridge, Nebraska; Glenwood Telephone Membership Corp., headquartered in Blue Hill, Nebraska; Consolidated Telecom, Inc., headquartered in Lincoln, Nebraska; Harman Telephone Exchange d/b/a BW Telecom, headquartered in Benkelman, Nebraska; Curtis Telephone Company, headquartered in Lincoln, Nebraska; and Citizens Telecommunications Co. of Nebraska, headquartered in Mound, Minnesota. The Board did not receive any protests or objections to the application. In order to approve a microwave communication application the Board must follow Neb. Rev. Stat. 70-1021. The statute has three criteria that need to be met. First, in the judgment of the Board the district is not receiving the required quality of service and will not within a reasonable time receive the required quality of service from the regulated carriers. Second, the regulated carriers would not provide the required quality of service by the same or alternate methods, at the same or lower costs to the district. Third, that such construction would be in the public interest. As required by Neb. Rev. Stat. 13-807(3), the PRB consulted with the Nebraska Game and Parks Commission to ensure that the PRB’s approval of the application would not harm any threatened or endangered species or their critical habitat. On December 29, 2016, the Commission provided the Board with a letter stating that the proposed facilities and approval would have no effect on any threatened or endangered species or critical habitat. The proposed facility is described as a 900 megahertz band unlicensed microwave communications system. It will operate in the frequency band of 902 to 928 MHz as a point-to-multi point system. Mr. Grennan moved to waive the hearing and approve PRB-3846-M. 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 item on the agenda was application PRB-3848. This is an application submitted by the City of Fairbury Light & Water Department requesting authority to construct 1.25 mile of 13.2 kV distribution line in Jefferson County. The application was filed on January 13, 2017. The proposed construction is in the service area of Norris Public Power District. A signed Conditional Consent and Waiver form was filed by Norris PPD consenting to the construction and waiving a hearing. The total cost of the project is estimated to be $20,000. The Board did not receive any protests or objections. The project would construct a new section of 13.2 kV line to replace an existing section of line that is located one mile to the east along a dirt road. Approximately only three quarters of a mile of the line will be in Norris PPD’s service area. The condition on the Consent and Waiver form is that if Norris builds facilities to that area and wants to serve the customers served by the line, Norris can do so if it pays Fairbury the depreciated value of the line. As required by Neb. Rev. Statute 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 needed habitat. In a letter dated January 25, 2017, the Game and Parks Commission determined the project would have “no effect” on any threatened or endangered species or needed habitat and does not object to approval of the project. Mr. Haase moved to approve PRB-3848. 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 to consider preliminary action on SAA 400-16-A. This is an application filed by the City of Neligh to acquire the service area rights to annexed territory. The hearing was convened on August 26, 2016. A final hearing on the merits is scheduled to begin at 9:30 a.m. or shortly thereafter today. The hearing will determine the total economic impact on Elkhorn Rural Public Power District and the amount of compensation Neligh would need to pay to Elkhorn RPPD. The Board tabled the agenda item until after the hearing.

The next item on the agenda was for the Board to approve the conversion of the Board’s Policies into “guidance documents.” During the 2016 session, the Legislature enacted LB 867, which authorized state agencies to issue “guidance documents.” A guidance document can only provide an agency’s interpretation of statue or regulations, n not create new policy provisions. Policies that are internal to the agency and do not affect the public are not guidance documents. Examples of internal office policies would be a weather policy, dress code, etc.. The Board’s office policies are not on the website, but instead are kept in a 3-ring binder at the office. All guidance documents are already available on the Board’s website. Executive Director Texel explained that the statute did not require an agency to approve converting policies into guidance documents, but he wanted to remove any possible argument that the staff converted the policies into guidance documents without Board approval. When the Board policies were converted into guidance documents the text of the policies remained exactly the same, only the formatting changed. The statute requires that each guidance document include a notice on the first page informing the public that the document only interprets the agency’s controlling statutes or regulations. Every year an index of each agency’s guidance documents must be provided to the Legislature’s Executive Board. Chairman Lichter moved to approve the Board policies affecting the public to be converted into guidance documents. 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 the executive director’s report. The first item discussed was an update on Southwest Power Pool (SPP) 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. The executive director explained to the Board that SPP was scheduled to give a presentation at the March meeting, but Sam Loudenschlager with SPP notified him that there was a conflict and they needed to reschedule. SPP has not chosen a new date as of yet, but the Board’s 2017 meeting dates were sent to SPP so they can determine what will work for their schedule.

The Board went into recess at 9:41 to conduct a hearing on the merits of application SAA 400-16-A. During an evidentiary hearing, the Board acts in its quasi-judicial capacity, so the hearing is not part of the public meeting. The executive director explained that the Board will reconvene its public meeting after the hearing and may or may not issue a preliminary decision in SAA 40-16-A.

The Board reconvened its public meeting at 2:33 p.m. All Board members were again present. Chairman Lichter explained that since the parties in SAA 400-16-A are submitting briefs that the Board would not be issuing a preliminary decision today. Executive Director Texel stated that briefs were due on February 17. After the Board reviews the briefs a written order would be issued.

The next item was the Legislative update. 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.

Fist was LB 327, which is the State’s main budget bill for the next biennium. Executive Director Texel explained that the Governor proposed to reduce the Board’s appropriated budget request by $50,000 in each year of the biennial budget. Almost all agency budgets were proposed to be reduced, so the Board was not being singled out. The hearing on the Board’s proposed budget before the Appropriations Committee is scheduled for February 22. The Board decided it would not contest the budget reduction and informed the executive director that unlike previous years, it does not believe he should attend the budget hearing.

LB 87 was introduced by Senator Blood. The bill would increase net metering from 25kw to 100 kw. It also allows customer generators to aggregate more than one qualified facility and more than one meter to determine rated capacity. It also allows local distribution utilities to waive two requirements for net metering: 1) the generator is intended to meet or offset customer’s requirements, and 2) the qualified facility cannot be intended to offset or provide credits for electric consumption at another location owned or leased by the customer. A hearing is set for February 22. The executive director recommended the Board remain neutral on the bill. The Board members agreed.

LB 127 was introduced by Senator Groene. The bill would change the notice requirements for public meetings in the Open Meetings Act. It would repeal language allowing public bodies to decide on the method of how to issue public notice of its meetings and instead require that all public bodies publish notice in a newspaper with general circulation I each county within the public body’s jurisdiction. That means state agencies would have to publish notice in newspapers that can be shown to have general circulation in all 93 counties. Executive Director Texel told the Board that the bill was discussed at the last independent agency head meeting, and there were considerable concerns about the bill. One of the other directors spoke with Senator Groene about the bill. Senator Groene told him the target of the bill is special purpose districts with multi-county jurisdiction, in particular Natural Resources Districts and Sanitary Improvement Districts. Senator Groene was open to exempting state agencies from the new requirement. The other director drafted a proposed amendment, reviewed it with Executive Director Texel, then submitted it to Senator Groene. The Board members decided the Board opposes the bill as drafted due to cost, but the Board would be neutral if an amendment is filed exempting state agencies from the notice requirements. Due to the Southwest Power Pool presentation to the Natural Resources Committee on the same day as the Committee hearing on LB 127, so the Board will submit a letter to the Government, Military and Veteran’s Affairs Committee.

LB 392 was introduced by Senator Larson. The bill would adopt the “Wind Friendly Counties Act.” The bill directs the Department of Agriculture to establish a process, with criteria and standards to recognize counties as “wind friendly”. The Board will take a neutral position on the bill.

LB 426 was introduced by Senator Murante. The bill changes expense reimbursement provisions for state officers and employees. It removes the “actual and necessary” expense language from a multitude of statutes, including the one covering the Power Review Board’s expense reimbursements, and replaces it with only the word “expenses.” It does not appear the wording change would alter reimbursements, so the executive director was not sure the reason for the bill. The Board members agreed the agency will be neutral on the bill.

LB 429 was introduced by Senator Wishart. The bill provides for virtual net metering. Virtual net metering is described as purchasing shares in or subscribing to a portion of a renewable energy generation facility authorized to engage in net metering. The participants in a virtual net metering facility would receive a credit on their retail electric bill based on the energy generated. The credits would be divided among the participants in a pro-rata portion.

LB 464 was introduced by Senator Watermeier. The bill would change the timing requirements for amending or repealing regulations. Executive Director Texel explained that he has three concerns with this bill. The first concern is with the use of the term “should have” on page 2, lines 25-28. Current law says if an agency fails to adopt a regulation within three years after the effective date of legislation requiring it. The bill would expand the requirement to situations where the agency “should have” made changes to a regulation. Should have is a very subjective and vague term that does not provide clear guidance to agencies regarding when a regulation would need to be changed or repealed. The second concern is with the new requirement that any time an agency decides to amend or repeal a regulation, it must hold the public hearing on the proposed new regulation within 12 months after effective date of the bill requiring the amendment or repeal. The problem is that if an agency decides on its own to amend or repeal a regulation, there is no bill involved, and thus no start time for the twelve month period. The third concern is that the bill would require an agency to send a copy of the public hearing notice to the Legislature’s Executive Board and to the standing committee with subject matter jurisdiction over the issue. The concern is that agencies may not know which committee has subject matter jurisdiction over certain issues. The executive director thought the Board could suggest agencies could submit the notice to the Clerk of the Legislature, and let him or her decide what agency should receive it. Since the hearing on the bill was scheduled for the day prior to the Board’s public meeting, the Board’s legislative committee had approved submitting a letter earlier that week, a copy of which was in their meeting notebooks. In the letter, the Board took a neutral position on the bill, but expressed the concerns stated above.

LB 494 was introduced by Senator Briese. This bill would add an additional exemption in the public records law ( 84-712.05) allowing public entities to withhold certain records from the public. The additional exemption would allow public bodies to withhold information relating to critical physical and cyber assets of energy infrastructure, including maps, drawings, equipment, computer programs, data and identity of personnel responsible for control or maintenance of those assets. The records could be withheld from the public unless publicly disclosed in court or in an administrative hearing, public meetings, etc. Executive Director Texel noted that the Board has supported similar exemptions for energy infrastructure in the past. The Board members agreed the Board would support the bill and submit a letter to the Committee prior to the February 2 hearing.

LB 504 was introduced by Senator Brewer. The bill imposes a moratorium on the development of industrial wind generation facilities in the Sandhills, and creates a task force to study the issue. The moratorium would prohibit all commercial wind farms in the Sandhills area of the State beginning January 1, 2018. The Department of Natural Resources would designate the exact territory that would be affected, and the director would appoint a task force of no more than thirteen members that would submit a report by December 1, 2019. The Board agreed it should remain neutral on the bill.

LB 547 was introduced by Senator Watermeier. This bill would amend 70-667 to remove the ability of public power districts to use eminent domain to acquire privately operated electric generation or transmission facilities. It would also amend 70-1014.02 to exempt all privately developed electric generation or transmission facilities from Power Review Board approval requirements. The private developer would only need to file the certifications in 70-1014.02 for all types of generation, not just those using renewables. The bill retains Board oversight for public power entities, though. The executive director expressed concern that the bill would regulate public power entities in Nebraska, but not private developers. In many, if not most, other states, private entities are subject to oversight, while public power entities are not. The Board members agreed that a letter should be submitted pointing out that the bill would subject public power entities to state oversight, but not the private developers.

LB 626 was introduced by Senator Larson. The bill would adopt the Shared Community Solar Act. The Act authorizes shared community solar facilities. There Act requires the shared community solar facility be in the same retail service area as its customer-generators. The bill contains a placeholder for the maximum capacity for the solar facilities. The Board agreed it should remain neutral, but the Committee should be made aware that the bill may have unintended consequences, such as conflicts with the statutes pertaining to retail service areas.

LB 657 was introduced by Senator Wayne. It would adopt the Retail Electricity Transparency Act. This is essentially a requirement for electric utilities to unbundle their electric bills. By July 1, 2018, all electric utility bills would have to separate out and show the charges for energy, generation, transmission and distribution. The bill lists nine things the bill must include. The bill charges the Nebraska Public Service Commission to enforce the provisions of the bill. The Board agreed to oppose sections 6 and 7 of the bill, which give the enforcement authority to the Public Service Commission. On all other parts of the bill, the Board is neutral.

LB 660 was introduced by Senator Wayne. It would adopt the Nebraska Retail Electricity Choice Act and eliminate retail service areas. The bill provides for retail competition in Nebraska’s electric market beginning July 1, 2018. The Nebraska Public Service Commission is charged with establishing the retail competition system, after holding a series of public hearings. The executive director expressed concern that section 2, subsection 6 of the bill contained false information. That part of the bill refers to the “conditions certain report” that used to be prepared annually by the Board. The bill states that “Despite the fact that these conditions have been met, the Nebraska Power Review Board has taken no steps to open up Nebraska’s retail electricity market to competition.” He pointed out that whoever drafted the bill for Senator Wayne lacks a basic understanding of administrative law. Administrative agencies have only the power delegated to them by the Legislature. No statute authorizes the Board to take any action whatsoever to implement retail competition in the electric industry based on the report. The executive director told the Board that he had been informed by some of the electric utility lobbyists that Senator Wayne or his staff told them the bill was designed to initiate a dialogue on the topic, and if the bill has support he would ask for an interim legislative study to examine the issue of retail competition in electricity. The Board members decided the Board would convey that it is neutral on whether retail competition in electricity should be adopted in Nebraska, but the Board has concerns about the way the bill is currently drafted due to numerous unintended consequences, etc. The Board told the executive director to inform the Natural Resources Committee that it believes the Board, and not the Public Service Commission, should be the agency responsible to implement retail competition should the Legislature decide that it is in Nebraska’s best interests to do so. Vice Chairman Reida wanted it pointed out that the LR 455 report conducted years ago by the Legislature studied the electric industry issues in Nebraska, had found that if retail competition were to ever be implemented in Nebraska, the Power Review Board should be the agency to implement and oversee the issue. The other Board members agreed.

The Board next considered election of its chair and vice chair for 2017. Chairman Lichter nominated Mr. Reida as Chairman and Mr. Haase as Vice Chair. 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. It is the Board’s practice that the new positions become effective at the end of the meeting in which the election occurs.

The Board has scheduled its 2017 meeting dates for the fourth Friday of each month. The meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall, Lincoln, Nebraska, unless otherwise indicated. The next meetings will be on February 24, March 24 and April 21. The February 24 meeting will be held in Grand Island at the Grand Island City Council Chambers. Following the tour the Board members and staff will be given a tour of the Nebraska Public Power District’s control center in Doniphan. Due to security issues, the tour is not open to the public.

Chairman Lichter 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 – yes, and Mr. Morehouse – yes. The motion carried 5 – 0. The meeting was adjourned at 3:34 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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