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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 766th Meeting

July 24, 2015

The 766th 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 July 14, 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 June 19, 2015, meeting. There was one recommended change in the description of the discussion pertaining to MEAN’s charter amendment. In the first paragraph on page 2, the minutes state that the City of Wray has 6.5 megawatts of wind generation. Ms. Dibbern, legal counsel for MEAN, contacted the Board’s staff and said that Wray has a total of 6.5 megawatts generation capacity, but only one megawatt of that is wind. She asked if the information could be corrected. The executive director recommended that the sentence be amended to read “The City has one megawatt of wind generation, with a total of 6.5 megawatts of generation.” Mr. Morehouse moved to approve the minutes with the new amended language. 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 agenda item was a correction to the May 22, 2015 minutes. In the last line on page 3, it refers to PRB-3787-G, stating a hearing was held in that matter. The hearing for PRB-3787-G was for the Holdrege Solar Center, and the hearing for that application was not in May. The hearing referenced in the May minutes was actually PRB-3798-G, for the Prairie Breeze III wind generation facility. The hearing for Prairie Breeze III was held on May 22. The executive director recommended the Board amend the minutes to remove the incorrect citation to PRB-3787-G and replace it with the correct citation to PRB-3798-G. Mr. Morehouse moved to approve the amendment to the May 22 minutes as described by the executive director. Mr. Haase 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 agenda item was acceptance of the expense report for the month of June. The expenses were $19,515.45 in personal services, $18,674.56 in operating expenses, and $2,409.00 in travel expenses. The total expenses were $40,599.01. Chairman Lichter asked about the status of the funds the Legislature had allocated for the LB1115 renewable energy study that was done by The Brattle Group. Executive Director Texel said all the expenses had been paid, but he was not sure how much of the funds were not used, or what had been or would be done with the funds. He said he could get that information to the Board at the next meeting. Chairman Lichter said that would be fine. Mr. Grennan moved to accept the expense report. Mr. Haase 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 PRB-3803. This is an application filed by the Omaha Public Power District to construct a 69kV transmission line that would be between 2.5 and 5.5 miles in length, depending on the final route selected. The line would be located northeast of the City of Fremont, in Dodge County, Nebraska. The application was filed on June 26, 2015. The line is located in the City of Fremont’s retail service area. A Consent and Waiver form was filed by Fremont waiving the hearing. Mr. Grennan stated that his employer, HDR Inc., is performing work on the projects involved in applications PRB-3803 and PRB-3804. Mr. Grennan filed a form C-2 Potential Conflict of Interest Statement with the Accountability and Disclosure Commission informing the agency that his employer is doing work on these projects, and that he was recusing himself from the discussion or voting on these applications. He announced that the Commission had sent a response acknowledging his statement and agreeing that recusal was appropriate. Mr. Grennan then sat in the audience and did not participate in the discussion or voting on PRB-3803 or PRB-3804. The project involved in PRB-3803 is a portion of a larger project that is referred to as the “Elkhorn River Valley Transmission Project.” The Southwest Power Pool, the regional transmission organization in which OPPD is a member, identified reliability issues within the Elkhorn River Valley Transmission Project area and issued a “notice to construct” directing OPPD to build the line. Due to the voltage and that the length of the line could be over five miles, a public notice was published in the Fremont Tribune on July 8, 2015. A Notice of Filing was also sent to those parties the Board deemed to be potentially interested in the application, including Nebraska Public Power District, OPPD and the City of Fremont. The Board did not receive any protests or objections to this application. The Board consulted with the Nebraska Game and Parks Commission pursuant to Nebraska Revised Statute section 37-807(3). In a response letter dated July 13, 2015, the Commission stated that the project is in the range of several threatened and endangered species. OPPD agreed to certain protective and mitigation measures. Based on the mitigation measures to which OPPD agreed, the Commission determined the project “may affect, but is not likely to adversely affect” threatened or endangered species and did not object to the approval of the project. Executive Director Texel recommended that the Board waive a hearing and approve application PRB-3803. Chairman Lichter moved to waive the hearing and approve PRB-3803. Vice Chairman Reida seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – recused, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one recusal.

The next agenda item was to consider application PRB-3804. The Board scheduled an evidentiary hearing for the PRB-3804. The Board went into recess at 9:20 a.m. to conduct the evidentiary hearing for PRB-3804. The Board reconvened its public meeting at 10:26 a.m. All board members who were present prior to the recess were again present. Mr. Grennan, who previously recused himself from the discussion of PRB-3803 and PRB-3804, remained seated in the audience and did not participate in the hearing.

The Board then considered agenda item PRB-3804. This is an application filed by the Nebraska Public Power District (NPPD) to construct 40 miles of 115 kV and a substation in Custer and Valley counties, Nebraska. The application was filed on June 30, 2015. The total estimated project cost is $29,900,000. The PRB provided written notice of filing and hearing to the City of Broken Bow, City of Ord, City of Arcadia, City of Sargent, Village of Berwyn, Village of Comstock, Custer PPD, and Loup Valleys Rural PPD. A notice was published on July 8 in the Ord Quiz and on July 9 in the Custer County Chief. No Petitions for Intervention were filed. The PRB consulted with the Nebraska Game and Parks Commission as required by section 37-807(3). In a letter dated July 23, 2015, the Commission informed the PRB that the project area was in the range of several threatened and endangered species. The species included the whooping crane, interior least tern, piping plover, river otter, white lady’s slipper and the northern long-eared bat. NPPD agreed to certain mitigation measures. As a result of NPPD’s mitigation agreements, the Commission determined the project “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 PRB-3804. The executive director explained that the Board had deliberated on this issue. He stated that Although the Board’s written Order is the final action, the PRB considers any action taken today to be a binding preliminary decision regarding issues of approval or denial of an application. Vice Chairman Reida moved to approve application PRB-3804. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Lichter – yes, Vice Chairman Reida – yes, Mr. Grennan – recuse, Mr. Haase – yes, and Mr. Morehouse – yes. The motion carried 4 – 0 with one recusal.

Mr. Grennan rejoined the Board after the completion of the vote on PRB-3804.

The next item on the agenda was the 2015 Annual Load and Capability Report. Jason Fortik, Vice President for Power Supply for the Lincoln Electric System and chair of the Nebraska Power Association’s Joint Planning Subcommittee, gave a presentation on the report. The PRB many years ago designated the NPA as the representative organization to prepare this report pursuant to Neb. Rev. Statute 70-1024. The report covers statewide utility load forecasts and resources available to satisfy the loads in Nebraska over a 20-year period. The Board thanked Mr. Fortik for the presentation and the discussion. Mr. Morehouse moved to accept the 2015 Annual Load and Capability Report. Mr. Haase 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 agenda item was approval of travel expenses for Board members to attend the Southwest Power Pool’s Regional State Committee informational retreat on July 26, quarterly meeting on July 27, and the Board of Director’s meeting on July 28 in Kansas City, Missouri. The Board members has discussed this opportunity to attend the RSC and SPP meetings at the June meeting and the Board directed the executive director to add the issue as an agenda item for the July meeting. The PRB’s Policy 4 covers travel expenses for Board members and states that the PRB’s RSC member or his or her proxy has standing approval to attend the RSC and SPP meetings. PRB Policy 7 gives standing authorization for the Board’s executive director to attend the RSC and SPP meetings. There is no standing approval for additional PRB members to attend the meetings, though. That means the Board needs to approve the travel expenses for Board members other than Chairman Lichter and the executive director. The expenses would include the hotel, possibly a meal or two, and mileage reimbursement. Chairman Lichter encouraged the other members to attend the meeting if possible. The informational retreats are very informative, and the travel expenses will be much less than usual due to the proximity of the meetings in Kansas City. Vice Chairman Reida and Mr. Grennan indicated they planned to attend the RSC and SPP meetings. Mr. Morehouse moved to approve the reimbursement of travel expenses incurred by any interested PRB members to attend the SPP and RSC meetings in Kansas City, Missouri in July. Mr. Haase 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 Board members had a copy of the June activities update from JK Energy Consulting regarding its Southwest Power Pool (SPP) activities. The Executive Director reminded the Board that Sam Loudenschlager, an SPP staff member, will give a presentation to the PRB on current issues before the SPP in conjunction with the PRB’s August 28 meeting.

The executive director mentioned that the cybersecurity briefing by an official with the National Association of Regulatory Utility Commissioners (NARUC) that was originally scheduled for June 16 had been rescheduled for August 25 at 1:30 p.m. The PSC will ask the speaker to fly in the evening prior to the briefing to avoid a repeat of what happened on June 16. The meeting will be held at the Public Service Commission’s hearing room at 1200 ‘N’ Street, The Atrium, Suite 300, Lincoln, Nebraska.

The Board then considered whether to give the executive director and general counsel a pay raise in conjunction with the raise given to other State employees at the start of the State’s fiscal year on July 1. At the June meeting the Board decided to table this agenda item until the July meeting so Chairman Lichter could schedule a meeting with the Governor’s office. The Board would like to give the executive director a pay raise that would be a higher percentage than what other State employees received. The Board is authorized to set the executive director’s salary and change it as it wants, provided the Board does not exceed its personal services limitation in the agency’s budget. The Board and the executive director did not want to take any action that the Governor might find inappropriate, so the Board decided the Chairman should speak with the Governor’s office before voting on the executive director’s raise. Chairman Lichter did met with the Governor’s Chief of Staff, Mr. Matt Miltenburger. Chairman Lichter gave a summary of his visit. They had discussed staffing issues due to the increased work involved with the SPP and the SPP consultant. Mr. Miltenburger had informed the Chairman that there is a study that would be done concerning “across the board compensation” issues regarding State employees. The Chairman provided Mr. Miltenburger with a comparison showing the salary of all Nebraska agency directors. Mr. Miltenberger asked about a salary comparison with the PRB executive director’s salary and the pay for similar positions in other states. The Chairman had told him the PRB did research that issue two or three years ago, but the data would not be current any more. Mr. Miltenberger indicated he would like to see the new figures. He told the Chairman that for the most part, as long as the salary remains under the agency’s personal services limitation (PSL) set in the State budget, the Governor’s office does not normally scrutinize pay raises for non-code agency directors.

The Board members discussed pay raises in general, and performance-based pay raises and bonuses for the other office staff. The executive director informed the Board that although there is a provision allowing for performance-based pay raises and bonuses in the State personnel rules, that provision has been administratively frozen since the Johanns administration. He was told that until and unless Governor Ricketts takes affirmative action to lift the freeze, it will remain frozen. The Board then discussed the PSL limits. Mr. Grennan suggested increasing the executive director’s salary 4.5% and then next year another additional percentage to get the executive director’s salary caught up to where the Board feels where it should be. The Board members discussed the importance of experience and institutional knowledge, particularly in such a small agency. They also expressed concern that if the PRB’s pay were too low, it might be too easy for another entity to offer a higher salary and lure the executive director to a new position. Mr. Morehouse pointed out that the Board has been trying to get the salary to $100,000 for many years and at this point the Board needs to make the jump and put his salary at $100,000. Chairman Lichter discussed a pay raise to put the executive director at or over $100,000. He proposed setting the salary at $99,000, which is approximately a 7.5% raise. Then the following year the State budget provides for a 2.5% increase for all State employees, which would take the salary over the $100,000 level organically. Vice Chairman Reida expressed that he was comfortable with the Chairman’s proposal, given the results of the meeting the Chairman had with the Governor’s Chief of Staff. Chairman Lichter asked the executive director do a follow up on salary comparisons with other similar positions in other states. He would like to be able to submit that in the next couple of weeks. He also recommended including with the other state salaries the salaries for general counsels or senior attorneys at Nebraska’s utilities. He would also like the executive director to estimate the percentage of his time spent on duties related his role as executive director vs. his role as general counsel. Vice Chairman Reida commented on the fact that other states’ PSC positions will include oversight duties for other utilities, such as gas, railroad, telecommunications, etc. The executive director said he would try to find salaries for the division that oversees electricity in the other states. The Board members agreed that might be a better comparison than the overall executive director at other State’s utilities commissions. Chairman Lichter made a motion to set the executive director’s salary at $99,000 annually, effective at the start of the next pay period on July 27, 2015. 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 Boar had previously scheduled its 2015 meeting dates for the fourth Friday of each month unless otherwise specified. The next meetings have been scheduled for August 25 (the cybersecurity briefing), August 28, September 25, and October 23, 2015. They will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall South, Lincoln, Nebraska.

Mr. Morehouse 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 12:38 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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