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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 762nd Meeting

March 27, 2015

 

The 762nd 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, and Mr. Haase. Mr. Morehouse had informed the Board several months ago that he would not be able to attend the March 27 meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on March 22, 2014. Normally the notice is published ten days prior to the meeting, but due to a technical issue at the newspaper, it ran in the Sunday edition prior to the meeting. 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 January 23, 2015, meeting. The staff did not have any recommended changes. Mr. Haase 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 – yes, and Mr. Morehouse – absent. The motion carried 4 – 0 with one absent.

The next agenda item was acceptance of the expense reports for the months of January and February. The January expenses were $18,804.98 in personal services, $14,123.76 in operating expenses, and $501.42 in travel expenses. The total January expenses were $33,430.16. The February expenses were $19,515.45 in personal services, $16,465.14 in operating expenses, and $636.26 in travel expenses. The total February expenses were $36,616.85. Vice Chairman Reida moved to accept the expense reports. 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 – absent. The motion carried 4 – 0 with one absent.

The next item on the agenda was a joint application submitted by the Nebraska Public Power District, the Dawson Public Power District and the City of Kearney. The application was filed on February 17, 2015. The application was designated as SAA 310-15-A and SAA 57-15-A (consolidated). Both service area agreement numbers are between NPPD and Dawson PPD. SAA 57 was between Dawson PPD and Platte Valley PPD, but Platte Valley PPD merged and became part of NPPD decades ago. It evidently was determined that it would be easier to leave both service area agreements intact and not merge them. NPPD serves Kearney at retail and holds the service area rights to the territory including and in the immediate vicinity around the City. Kearney is not an actual party to the amendment, but it is the PRB’s practice to allow a city in this type of situation to participate in the joint application to amend the service area directly affecting the city. Kearney annexed two tracts of land on the eastern edge of the City. NPPD and Kearney would like to include the two tracts of land into its service area. Exhibit A shows the area involved. There is also a metes and bounds description of the territory involved and a copy of the City’s resolutions annexing the territory. Mr. Haase moved to approve applications SAA 310-15-A and SAA 57-15-A (consolidated). 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 – absent. The motion carried 4 – 0 with one absent.

The next item on the agenda was a joint application submitted by Wheat Belt Public Power District and the City of Sidney. The application was filed on February 23, 2015. The application was designated as SAA 105-15-A. This amendment is not based on recent annexation. The territory involved was annexed by the City, but the annexation occurred many years ago. After some negotiating, the parties agreed to a compensation package where Wheat Belt PPD would be paid for any customers within the area over a period of years. Exhibit A-1 shows the new area that the application would add to Sidney’s service area. Mr. Grennan moved to approve application SAA 105-15-A. 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 PRB-3793. This is an application submitted by the Norris Public Power District for approval to construct two miles of 34.5 kV transmission line. The application was filed on March 13, 2015. The proposed line would be located in Saline County, near the City of Friend, Nebraska. Friend filed a Consent and Waiver form. The purpose of the construction is to provide back-up feed to the City. In addition, it will replace an existing underground line installed in 1978. The Board consulted with the Nebraska Game and Parks Commission, as required by Nebraska revised Statute section 37-807(3). A consultation letter was received on March 26, stating that the Commission has no record of endangered or threatened species in the project area. The Commission determined the project would have “no effect” on any endangered or threatened species and did not object to approval of the project. Mr. Haase moved to approve Norris Public Power District’s application PRB-3793. 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 – absent. The motion carried 4 – 0 with one absent.

The next item on the agenda was to consider establishing a PRB Legislative Review Committee. This committee would allow the Board to make decisions on legislative issues that arise between its monthly meetings. There have been numerous occasions where the executive director has been involved in working on legislation and senators, developers and Nebraska’s public power utilities would like to know the Board’s stance on a bill or amendment, or where an amendment is proposed and the executive director needs to know if the Board wants to take a position on the amendment. Because the Board only meets monthly, it is not possible to have the Board consider the bill or amendment without doing so on a conference call or by e-mail. But having the entire Board consider its position on legislation outside a public meeting arguably raises open meetings concerns. The executive director has in the past contacted the Board’s Chairman on legislative issues to avoid an open meetings concern. But then it is only the chairman’s opinion, and Chairman Lichter believes that having additional input from another Board member would help when making a decision. The Board could appoint two members by virtue of their position (chair and vice-chair, or chair and attorney member) or appoint specific individuals. The executive director thought that it might be preferable to appoint by position. He recommended that if the Board wanted to appoint the chair and the attorney member, it would need to clarify that if the chair is the attorney member, the vice-chair would be the second committee member. After discussion, the Board members agreed that the chairman and the Board’s designated attorney member should be the Board’s designated legislative committee members, and if the attorney member was the chair, then the vice-chair would be the second member. Chairman Lichter moved to establish the creation of a standing PRB Legislative Committee comprised of the Board’s chairman and the attorney member, or the chair and vice chair if the attorney member is the chair. The committee is delegated the authority to make decisions on the Board’s position on legislative matters when timing does not allow the full Board to do so. 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 – absent. The motion carried 4 – 0 with one absent.

The next item on the agenda was consideration of application PRB-3787-G. The Board has an evidentiary hearing scheduled on this application which will take place during a recess of the Board’s public meeting. All Board members agreed to table the matter until after the Board could hold the hearing. The Board members decided to continue to the next agenda item before taking a recess.

The next item on the agenda was the executive director’s report. The Board members had a copy of the January and February activities update from JK Energy Consulting regarding its Southwest Power Pool (SPP) activities. Executive Director Texel told the Board that Sam Loudenschlager, with the SPP, had contacted him about setting up an educational briefing visit with the PRB staff. SPP gave the PRB a similar presentation in the past, with Paul Suskie and Mr. Loudenschlager giving the presentation. The SPP had offered to give the briefing in Lincoln or in Little Rock at the SPP headquarters. Due to the small size of the PRB’s staff, the executive director recommended the briefing take place in Lincoln in conjunction with one of the Board’s public meetings so that the Board members could be present. The Board members agreed with this approach. The executive director are trying to schedule the briefing in the next few months. Chairman Lichter then spoke about the upcoming SPP meeting in Tulsa. He explained that the Regional Allocation Review Task Force (RARTF) is still putting off its final decision. The task force members believe that the models that are being used are outdated. The PRB’s SPP consultant, John Krajewski, will also be working on another task force called the Transmission Planning Integration Task Force (TPITF) over the next six months.

The Board went into recess at 9:41 a.m. to conduct an evidentiary hearing on PRB-3787-G.

The Board reconvened its public meeting at 12:13 p.m. All Board members that were present prior to the recess were again in attendance. During the recess the Board had conducted the evidentiary hearing on PRB-3787-G. The Board also deliberated on the matter prior to reconvening its public meeting. Executive Director Texel explained that the Board is acting in its quasi-judicial capacity when considering this application, and is not required to vote on the matter during its public meeting. The Board often does vote on applications as a courtesy to the applicant, providing the applicant with a preliminary but binding determination regarding whether the Board will approve or deny the application. This allows an applicant to proceed on a project without having to wait until the Board’s written decision is issued. The written order constitutes the Board’s final action on the matter, though. Application PRB-3787-G was filed by the Holdrege Solar Center, LLC requesting authority to construct a five megawatt solar generation facility in Lancaster County. The facility would be located west of the City of Lincoln, just north of Interstate 80. The application was filed on January 16, 2015. The total estimated cost is $8,700,000. It is estimated to be completed December 31, 2015. The Board had 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 the Lincoln Journal Star newspaper on January 28, 2015. No Petitions for Interventions or objections were filed in the matter. 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 February 23, 2015, the Commission noted that the project area is in the range of the western prairie fringed orchid, but there are no records of the species within the project area, and no suitable habitat within or adjacent to the project area. The Commission determined that the application would have “no effect” on any state-listed endangered or threatened species. The Commission did not object to the PRB’s approval of the application. The Board directed the applicant to provide the Board with a brief, addressing the issue of how the project meets the three approval criteria in Neb. Rev. Stat. section 70-1014. The Board wanted the applicant to have the opportunity to cite to evidence and testimony in the record, so the Board decided that the applicant will have ten days from when it receives a copy of the transcript to submit its brief. The hearing officer will coordinate with the applicant’s council to ensure that applicant receives a copy of the transcript and evidence, and the hearing officer will determine the due date for the brief.

The Board then continued with the executive director’s report. The executive director updated the Board on bills pending before the Legislature.

LB 177 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 of the district where the employee works. This bill was referred to the Government, Military and Veterans Affairs Committee. The bill was amended to prohibit employees in high-level management positions from serving on the board of directors for any public power district. The Legislature passed this bill on final reading on March 6. The Governor signed it on March 12.

LB 209 was introduced by Senator Hilkemann. This requires all political subdivisions to go to mediation prior to commencing litigation against another political subdivision. The Judiciary Committee indefinitely postponed the bill on January 23, 2015.

LB 282 was introduced by Senator Baker. This bill would amend the open meetings law as it relates to closed sessions. It allows public bodies to go into closed session to evaluate the 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 the employee’s reputation. This bill was referred to the Government, Military and Veterans Affairs Committee. This Committee indefinitely postponed the bill on February 23, 2015.

LB 407 was introduced by Senator Ken Haar. This bill would amend the certified renewable export facility (CREF) statute. The bill was referred to the Natural Resources Committee. It would strike several requirements from the certified renewable export facility approval process. The bill 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 definition of “stranded asset” in section 70-1001.01, 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. Executive Director Texel told the Board that representatives of private developers, Nebraska’s public power utilities and others have had several meetings in Senator Haar’s office about this bill. He had attended two or three of the meetings. The executive director conveyed to the group that the PRB opposes removal of the ROFR and sees is as unrelated to the CREF statute. The PRB believes it is necessary to require either a power purchase agreement (PPA), or a firm path delivery of the facility’s output outside Nebraska, or strong language regarding protecting against stranded assets. The language in the current law requires a PPA for the output for the life of the facility. The group had also discussed allowing developers to sell up to 50% of the facility’s output inside Nebraska if it is through a PPA. The executive director said he had told the group the percentage that could be sold inside Nebraska really does not matter as long as it is pursuant to a power purchase agreement to a Nebraska public power utility, to prevent a facility selling its output into the market at low or even negative prices (a particular concern for facilities that are eligible for the federal production tax credit). The Board confirmed that it agrees with the positions expressed by the executive director. The executive director said another possible change is to allow the PPA prior to commencement of construction, and not have any PPA or negotiations requirement at the conditional approval stage. The Board members discussed the proposed changes to the PPA requirement language. The Board members stated that they believed the PPA requirement or similar language is crucial, but it does not matter at what stage it is required as long as the PPA or similar language is required prior to construction. Senator Haar designated this bill as his priority bill.

LB 412 was introduced by Senator Mello. This bill amends the Community Based Energy Development (C-BED) statutes. The bill was referred to the Natural Resources Committee. The bill would limit the required county board support for a C-BED facility to only those county boards that have adopted zoning regulations requiring approval of C-BED projects by a planning commission or county board. 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. This bill is on General File, but has not been designated as a priority bill.

LB 423 was introduced by Senator Nordquist. This bill changes the renewable energy tax credit for C-BED facilities. C-BED developers would be able to choose between an increased renewable production tax credit or a one-time tax credit of up to thirty percent of the total cost of the facility. This bill was referred to the Revenue Committee. Senator Nordquist designated LB 423 as his priority bill.

LB 424 was introduced by Senator Davis. This bill amends the provisions relating to the nameplate capacity tax. It expands the nameplate capacity tax to all renewables instead of only wind facilities. This bill is on General File, but is not prioritized.

LB 432 was introduced by Senator Baker. The bill would amend the public records act. Senator Baker withdrew the bill. It is unclear why it was withdrawn.

LB 462 was introduced by Senator Seiler. This bill would change or clarify what actions or speech are to be considered prohibited campaigning by public officials. The bill was introduced as a result of a decision issued by the Nebraska Accountability and Disclosure Commission in which the Commission fined two officials at a public power district for running radio informational ads that contradicted claims about wind power made by a candidate for a public power district board of directors. The executive director’s concern is that the language in the Commission’s decision is extremely overbroad and far-reaching. It appears to be a reaction to a particular situation without regard for its broader impact. Executive Director Texel expressed concern that under the Commission’s decision, statements by himself or a PRB member that contradict statements made by anyone running for any office in the State could be considered campaigning and subject them to a $2,000 fine. He testified in favor of the bill at the hearing before the Government, Military and Veterans Affairs Committee, although he pointed out the bill protected disseminated speech, such as on radio or television, but not statements made such as a conference or seminar. The bill is not prioritized and is not expected to go to general file.

LB 469 was introduced by Senator Smith. This bill requires that the Nebraska Department of Environmental Quality study and develop a state plan for regulation carbon dioxide emissions. The bill was amended to have the Nebraska Energy Office conduct a report on the EPA’s clean carbon rules under section 111(d) of the Clean Air Act instead of the NDEQ. This bill is on General File and is Senator Lindstrom’s priority bill.

LB 475 was introduced by Senator Davis. This bill amends the PRB’s jurisdiction under 70-1012. As written, the bill limits the PRB’s approval jurisdiction to generation facilities that result in an increase in capacity or have a total cost of $150 million. The executive director had spoken to Senator Davis, and was told the inclusion of the word “only” that created the limitation of the PRB’s jurisdiction was unintentional and would be removed in an amendment. The bill is not prioritized.

LB 536 was introduced by Senator Ken Haar. This bill would require Nebraska’s public power utilities to provide a list of information to the PRB, which would be required to publish the information on the Board’s website in a searchable electronic database. Senator Haar asked the Committee not to move the bill forward this year.

The executive director then informed the Board that OPPD’s CEO, Gary Gates, has announced his retirement. He wished Mr. Gates well in his retirement. He also told the Board that OPPD had selected Tim Burke as Mr. Gates’ replacement, effective May 10, 2015. Executive Director Texel expressed his congratulations to Mr. Burke on his new position.

The Board scheduled its 2015 meeting dates for the fourth Friday of each month unless otherwise specified. The meetings will be held in the Liquor Control Commission Hearing room, 5th floor, State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The next three meetings are scheduled for April 17, May 22, and June 19, 2015.

Mr. Grennan moved to adjourn the meeting. 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 –absent. The motion carried 4 – 0 with one absent. The meeting was adjourned at 12:44 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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