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

Minutes

Minutes of the 741st Meeting

April 12, 2013

The 741st meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the Liquor Control Hearing Room, 5th floor, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The roll was called and present were Chairman Siedschlag, Vice Chairman Lichter, Mr. Morehouse and Mr. Reida. Executive Director Texel told the Board that Mr. Bourne had informed the Board’s staff that he would be able to attend if there was not a quorum available. The staff had informed him there would be a quorum and that his presence was not required. The executive director stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on April 2, 2013. All background materials for the agenda items to be acted on had been provided to the Board members prior to the meeting on the DocLanding electronic distribution system, and a copy of the materials was in each Board member’s notebook. Executive Director Texel announced that a copy of the Nebraska Open Meetings Act was displayed 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 minutes from its March 8, 2013, meeting. Executive Director Texel did not have any recommended changes. Mr. Reida moved to approve the minutes. Vice Chairman Lichter seconded the motion. Voting on the motion: Chairman Siedschlag – yes, Vice Chairman Lichter – yes, Mr. Bourne – absent, Mr. Morehouse – yes, and Mr. Reida – yes. The motion carried 4 – 0 with one absent.

The next agenda item was acceptance of the expense report for the month of March 2013. The expenses for March were $18,234.49 in personal services, $19,616.93 in operating expenses, and $1,243.08 in travel expenses. The total March expenses were $39,094.50. Vice Chairman Lichter moved to accept the expense report. Mr. Morehouse seconded the motion. Voting on the motion: Chairman Siedschlag – yes, Vice Chairman Lichter – yes, Mr. Bourne – absent, Mr. Morehouse – yes, and Mr. Reida – yes. The motion carried 4 – 0 with one absent.

The next item on the agenda was to consider PRB-3711. This is an application filed by the Cedar-Knox Public Power District requesting authority to construct .9 mile of 12.47 kilovolt distribution line. This is an existing line that needs to be moved to allow for a new rail facility that will serve a grain handling operation. The line is located in the service area of the Village of Laurel. A consent and waiver form was submitted with the application stating that the Village had no objection to the application and waiving a hearing. The line will be underbuilt on the Village’s 69 kV line located on the other side of the road from the district’s existing line. As required by statute, the PRB consulted with the Nebraska Game and Parks Commission. A letter was received on April 11 stating the Commission determined the project would have “no effect” on any state-listed threatened or endangered species. Vice Chairman Lichter asked if a utility is required to consult with the Game and Parks Commission when it constructs a line inside its own service area. Executive Director Texel replied that the statute requiring the Board’s consultation only requires state agencies that must approve a project to consult with the Commission to assure that no threatened or endangered species will be negatively impacted. Representatives for the Municipal Energy Agency of Nebraska, the Nebraska Public Power District, and the Lincoln Electric System that were present indicated that their utilities do consult with the Commission to assure no threatened or endangered species are negatively impacted by proposed projects that do not require PRB approval. Chairman Siedschlag asked about the financing of the project. He stated that the application shows that all the construction is being paid by the district. He noted that in the past most similar applications involved a contribution paid by the party or customer requesting that the facilities be moved. He thought that the district must believe that the customer or customers that will be served by this new line will eventually pay for the relocation cost through their rates. Executive Director Texel said he was not sure, but it also may have been an older line that the district had already budgeted to replace. He said he had not specifically asked the district about the financing. The executive director recommended approval. Mr. Morehouse moved to approve PRB-3711. Vice Chairman Lichter seconded the motion. Voting on the motion: Chairman Siedschlag –yes, Vice Chairman Lichter – yes, Mr. Bourne – absent, Mr. Morehouse – yes, and Mr. Reida – yes. The motion carried 4–0 with one absent.

The next item on the agenda was to consider PRB-3715. This is an application filed by the City of Pierce. The City serves the Village of Foster and is requesting to replace a three-mile portion of the line that serves the Village. The new distribution line will have increased voltage. The existing line uses #4 ACSR conductor, while the new line will use #1 ACSR. Although this is a reconductoring project, the increased voltage is the reason the City needs to obtain the Board’s approval for the project. The line is located in the Northeast Nebraska PPD’s service area west of the City of Pierce. Chairman Siedschlag noted that the application states that construction was expected to begin in the fall of 2012. He asked if construction had already begun on the project. Executive Director Texel said that the City and Northeast NE PPD have been discussing this project since last summer or fall, and the application had evidently been filled out when the initial discussions were occurring, and the City thought that the parties would come to agreement quickly. The parties thought they had worked out language for a conditional consent and waiver, although the language had originally been added to the application itself and not put on a consent and waiver form. The parties removed the language from the application. After the application was filed, the executive director had informed both parties of how he interpreted the conditional consent language. He found out that the parties did not have the same understanding regarding what the language would have required or accomplished. Normally when an application is received without a consent and waiver form the Board’s staff sets the matter for hearing. After speaking with both parties, they thought that the issue could be worked out prior to the Board’s April 12 meeting date. Executive Director Texel put the matter on the agenda and all parties agreed the Board would table the matter if an agreement was not reached by April 12. If an agreement was not reached, the Board would then send out a notice of hearing. If an agreement could be reached prior to the May 10 hearing date, the hearing could be canceled and the Board could approve the application without a hearing.

Chairman Siedschlag said that since the application indicates that construction was to commence during the fall of 2012, he was concerned that the City has already started construction, which is an issue that the Board dealt with in a previous application from the City. Chairman Siedschlag told the executive director he would like the City to clarify the date construction did or will begin, and how the cost of the construction project would be recouped. Executive Director Texel said it was his understanding that discussions held between the City and Northeast have revolved mostly around joint planning and allowing Northeast to use the line to serve Northeast’s customers that are near to the line or already served by the line. Chairman Siedschlag wondered why the matter could not be easily taken care based on the previous issues that created the basis of the settlement agreement. Mr. Reida said he wants the City to amend the application to provide current estimates of when the construction would begin. Mr. Morehouse stated that he wants the City to clarify whether construction has in fact been commenced. Chairman Siedschlag agreed with the comments by Mr. Reida and Mr. Morehouse, and that the City needs to clarify these issues to the Board in an amendment to the application. If construction had begun, the Board will definitely want to speak to the City officials at the next meeting. The executive director will notify the City what additional information the Board expects to receive. All Board members present agreed to table the matter until the May 10 meeting, but urged the parties to try to resolve their issues.

The next item the Board considered was the reimbursement of expenses for the executive director to attend a continuing education legal seminar sponsored by the Nebraska Bar Association’s Government Practice Section. The seminar was held on April 10. The topic was “What Judges Expect in the Courtroom.” Executive Director Texel said the seminar dealt primarily with appeals of administrative orders under the Administrative Procedure Act in state district court, but it was good to hear a judge’s perspective about evidentiary issues and trial techniques involving government agencies. Judge Karen Flowers was the speaker. The cost of the seminar was $45 and it counts toward mandatory continuing legal education credits. Executive Director Texel said he already paid for the seminar, and was now asking if the Board wanted to reimburse him for the cost. Mr. Morehouse moved to approve reimbursement for the expense of the executive director and general counsel attending the Nebraska Bar Association’s legal seminar on April 10. Vice Chairman Lichter seconded the motion. Voting on the motion: Chairman Siedschlag –yes, Vice Chairman Lichter – yes, Mr. Bourne – absent, Mr. Morehouse – yes, and Mr. Reida – yes. The motion carried 4–0 with one absent.

The Board then moved on to the executive director’s report. The executive director first updated the Board about finding a replacement for Mr. Bourne. As the Board already knows, Mr. Bourne’s term expired at the end of 2012 and he did not ask to be reappointed. Executive Director Texel stated that the Governor had not made an appointment yet. He was told that one person had filed an application for the opening, but there was no indication when the Governor might make a decision, or if he wanted to wait until he could choose from several applicants.

Next, the executive director stated that a copy of the Southwest Power Pool consultant’s monthly activities update was in the Board’s notebooks, and had been provided to the Board members prior to the meeting through the DocLanding system. Chairman Siedschlag pointed out several upcoming meetings to the other Board members. The next quarterly Regional State Committee (RSC) and Board of Directors meetings will be in Kansas City on April 29-30. He suggested that if any other Board members were able to attend these meetings that it would be a good idea. He said that the next quarterly RSC meeting after April will be July 29-30 in Denver, Colorado. The RSC is trying to set up an educational retreat in conjunction with the July meeting. Right now the retreat is tentatively planned for July 25-26. He recommended that any Board member who could attend the RSC Retreat try to do so. He already asked the other RSC members if they were all right with PRB members other than himself attending the retreat, and the other RSC members were fine with it. He pointed out that his term will end at the end of this year and another Board member will need to replace him on the RSC. Vice Chairman Lichter stated that he would be attending the Kansas City meeting. Executive Director Texel stated that he would also be attending the Kansas City meeting. He said he would review his schedule to see if it might be possible for him to attend the Colorado meeting, too.

The executive director then discussed the draft of the PRB policy providing guidance regarding the Board’s interpretation of its jurisdiction over situations where non-utilities provide electricity to third parties, such as plug-in electric vehicle charging stations. A draft policy had been sent to the Board prior to the meeting for their review. The executive director wanted to know if the draft policy adequately expressed the Board’s view of the situation. He would then send a copy of the draft policy to all Nebraska power suppliers that had agreed to be part of the Board’s electronic contact list. All Board members indicated the policy was acceptable and could be sent to the utilities for their comments. The comments will then be provided to the Board and the Board can consider the final version of the policy at its May 10 meeting.

The next item the executive director discussed was an update on legislative bills.

The first bill discussed was LB 66. This is Senator Schilz’s bill that authorizes cities of the first class to annex certain noncontiguous territory. Normally a municipality has to file an application to amend a service area agreement to take over annexed territory within one year from the date of annexation or it loses its ability to take over the territory as of right. Under LB 66, the one-year period the municipality has in which to file the application to amend its service area agreement would be tolled until the noncontiguous territory becomes contiguous. After the municipality annexes territory making the previously annexed territory contiguous, the one-year filing deadline would begin. The bill has been advanced to general file. The PRB took a neutral position on this bill.

LB 195 is the mainline budget bill. The bill includes the PRB’s budget request for $30,000 to fund the digital mapping project. Budget debate is set to begin on May 1.

LB 294 is Senator Seiler’s bill that changes provisions relating to the use of public resources by public officials. This bill was submitted in response to a decision issued by the Nebraska Accountability and Disclosure Commission. The Commission had fined two employees of the Northwest Rural Public Power District for purchasing public service advertisements that presented facts about wind power and electric rates that allegedly contradicted statements made by a candidate for the District’s board of directors. Although the announcements did not refer to the candidate or the office he was seeking, the Commission fined the employees each $2,000 because it deemed them to be engaged in “campaigning.” The original version of the bill would clarify that public comments involving the use of funds by a public official who is a member of or appointed by a government body and who is acting under the direction of that government body or another public official can communicate authorized information for the purpose of educating the public on issues germane to the official’s office or employment, and doing so does not constitute “campaigning.” There is an amendment that would essentially become the bill. This bill has not been prioritized, so at this point it will likely not go any further this session.

LB 340 is the Board’s bill to allow the PRB the discretion to waive hearings on special generation applications filed under section 70-1014.01. The Legislature passed the bill, and the Governor signed it on April 3. It will go into effect three months after the end of the Legislative session.

LB 388 is the bill to create a right of first refusal (ROFR) for Nebraska’s incumbent electric utilities when constructing large transmission facilities determined necessary by a regional transmission organization. The Natural Resources Committee advanced the bill, but removed the definitional changes that were in the original version. The Committee designated it as a priority bill. The bill has advanced to final reading.

LB 557 is a bill introduced by Senator McGill to amend the net metering act to authorize creation of “community solar gardens.” The bill authorizes the PRB to promulgate rules and regulations to implement its provisions. Community solar garden is defined as “a solar electric generation facility with a nameplate rating of two megawatts or less that is located in or near a community served by a local distribution utility for which the beneficial use of the electricity generated by the facility belongs to the subscribers to the community solar garden.” The executive director submitted a fiscal note for $8,000. The funds would be needed to hire a consultant on finances and capitalization issues that would need to be addressed in the new regulations. This bill is still in Committee and was not prioritized.

LB 567 is Senator Haar’s bill to amend the PRB’s approval criteria for generation facilities over 20 megawatts or $100 million to take into account what is often referred to as the cost of “externalities.” In approving the pertinent facilities, the Board would determine if the benefits outweigh the risks. The Board would consider the health and environmental impacts, air and water quality and health care costs, the economic impact to communities, water usage, fuel costs and regulatory compliance costs. The bill is still in Committee. It is expected that there will be an interim study to examine the issues in LB 567.

LB 622 is Senator Haar’s bill adding information to be included in the PRB’s Research and Conservation Report. The new information would require the Board’s designated representative organization to list areas where renewable energy projects of less than twenty megawatts could be added without major additional transmission improvements. The bill is still in Committee and was not prioritized.

The final bill discussed was LB 646. This bill was advanced to select file on April 10. The bill requires OPPD to divide its territory into subdivisions and elect a director from each subdivision instead of electing the five metropolitan directors on an at-large basis as is currently set out in the District’s charter. The original bill had the PRB drawing the boundaries for the new subdivisions, but that was removed at Executive Director Texel’s request. The amendments allow OPPD to draw its own boundaries. The amendments also remove the mandate that OPPD redistrict and instead uses permissive language. However, the OPPD Board already passed a resolution that it would redistrict. The amendments also stagger the elections for the directors in the new subdivisions.

The next Board meeting will be on May 10, 2013. The meeting is scheduled to be held in the Liquor Control Commission hearing room, State Office Building, 301 Centennial Mall South, Lincoln, Nebraska. The meetings in 2013 have been set for the second Friday of each month. The next meetings after May are scheduled for June 14, July 12, and August 9, 2013.

Mr. Morehouse moved to adjourn the meeting. Vice Chairman Lichter seconded the motion. Voting on the motion: Chairman Siedschlag – yes, Vice Chairman Lichter – yes, Mr. Bourne – absent, Mr. Morehouse – yes, and Mr. Reida – yes. The motion carried 4 – 0. The meeting was adjourned at 10:25 a.m.

________________________________

Timothy J. Texel

Executive Director and General Counsel