Minutes

Meeting of the 806th Meeting

NEBRASKA POWER REVIEW BOARD

Minutes of the 806th Meeting

November 22, 2019

 

 

The 806th meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the First Floor hearing room, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska.  The roll was called and present were Chairman Reida, Vice Chairman Morehouse, Mr. Grennan, and Mr. Moen.  Mr. Hutchison had notified the Board’s staff last month that he would not be able to attend this meeting.  Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on November 12, 2019.  All background materials for the agenda items to be acted on were provided to all Board members prior to the meeting 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 south wall of the room for the public to review, and another copy was available in a three-ring binder on the table at 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 October 25, 2019, meeting.  The staff did not have any recommended changes.  Mr. Grennan moved to approve the minutes from the October 25, 2019 meeting.  Vice Chairman Morehouse seconded the motion.  Voting on the motion:  Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – absent, and Mr. Moen – yes.  The motion carried 4– 0 with one absent.

 

The next agenda item was acceptance of the expense reports for the month of October.  In October, there were $22,689.27 in personal services, $16,456.97 in operating expenses, and ($1,013.50) in travel expenses.  The total expenses for October were $38,132.74.  The travel expenses were negative due to receiving a reimbursement check from the Southwest Power Pool (SPP) for Mr. Grennan’s travel to Washington, D.C. to meet with FERC Commissioners and staff.  Executive Director Texel pointed out that the agency’s total appropriation increased due to the encumbrances being liquidated.  At the end of the fiscal year, payments are made, but they are not processed until the next fiscal year.  After they are processed, the appropriation is increased for the new fiscal year in the same amount of the encumbrances that were liquidated during the new fiscal year.  If this were not done the amounts paid during the previous fiscal year would be posted during the new year and counted against the agency’s appropriation for the new year.  Mr. Grennan discussed the terms used to describe the budgeted amounts.  The executive director said that Ms. Hallgren (the PRB’s business manager) had explained that the budget status sheet is controlled by State Accounting, and she could not change the columns or how the information is referenced on that sheet.  Executive Director Texel explained that is why Ms. Hallgren created the cash flow sheet.  The cash flow sheet is created and controlled by the PRB and better assists in showing the cash on hand compared to the expenditures so far that fiscal year.  The Board discussed the cash on hand and where it stood in percentage of amount of use compared to how much time this fiscal year had elapsed.  The discussion about the budget involved the agenda item pertaining to an increase of $1,050 per month for JK Energy Consulting during calendar year 2020 due to additional duties, and how that could affect the budget amounts.  The Board would like to keep a close eye on the numbers since the Board was not able to collect its entire appropriation.  In the last couple of years, the Governor’s Budget Office limited the amount the Board can collect through assessment to the amount the PRB has spent historically over the past several years.  Vice Chairman Morehouse moved to accept the October expense report.  Mr. Moen seconded the motion.  Voting on the motion:  Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – absent, and Mr. Moen – yes.  The motion carried 4– 0 with one absent.

 

The next item on the agenda was to consider comments to the Federal Energy Regulatory Commission (FERC) in the Notice of Proposed Rulemaking (NOPR) to amend the regulations implementing the Public Utility Regulatory Policies Act of 1978 (PURPA).  The comments are due December 3, 2019.  The Board discussed this topic at its October 25 meeting and asked the executive director to prepare draft comments stating that the Board generally supports the proposed amendments and addressing the issue that Nebraska does not have a state agency that meets the definition of a “State Commission” under the Federal Power Act (FPA) and PURPA.  A state commission under the FPA and PURPA is the entity that sets or approves retail rates for electric utilities.  The Board appointed a committee comprised of Chairman Reida, Mr. Hutchison and the executive director to prepare recommended comments for the Board to consider at its November meeting.  Although the Power Review Board is the agency in Nebraska with primary jurisdiction over electric power suppliers, it does not meet the definition of a “State Commission” because it does not approve retail electric rates.  Due to this, Nebraska has no state agency that would be a “State Commission”.  The draft comments recommended by the committee explained that the PRB generally is supportive of the amendments outlined in the NOPR.  In addition, the comments would ensure that FERC understands how Nebraska functions, in that it is a public power state and would not have a state agency with statewide jurisdiction to exercise some of the discretionary functions set out in the NOPR.  This would be different from the other 49 states.  In Nebraska, each of the 162 retail electric power suppliers would function as the state commission or state regulatory authority for purposes of implementing the changes in the NOPR.  Chairman Reida wanted it reflected in the minutes that although Mr. Hutchison was absent and could not vote on the comments, he had reviewed the recommended comments as a member of the review committee and approved them.  Executive Director Texel told the Board he had attended the Nebraska Power Association board of directors meeting on November 20 and had mentioned that the PRB intended to submit comments on the NOPR and gave them an overview of what the PRB planned to say.  He said John McClure, general counsel for the Nebraska Public Power District, said that FERC is well aware that Nebraska is an all public power state with no state commission with statewide jurisdiction, and that our utilities set their retail rates directly.  Mr. Grennan moved to adopt the recommended comments and to have the staff submit them to FERC.  Mr. Moen seconded the motion.  Voting on the motion:  Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – absent, and Mr. Moen – yes.  The motion carried 4– 0 with one absent.

 

The next item on the agenda was to consider an addendum to State Contract 69810 04.  This is the Board’s contract with JK Energy Consulting, LLC.  Recently, Mr. Grennan was elected to be the next president of the Southwest Power Pool’s (SPP) Regional State Committee (RSC).  His term will be during calendar year 2020.  It is the SPP RSC’s practice that during the term of the RSC president’s term, the voting representative of the Cost Allocation Working Group (CAWG) from that same state is appointed as Chair of the CAWG.  Mr. Krajewski would therefore become the CAWG chair when Mr. Grennan becomes RSC president on January 1, 2020.  The CAWG chair has additional duties that other CAWG members do not have, such as coordinating CAWG meeting dates and locations, preparing CAWG meeting minutes, coordinating and leading conference calls, additional planning meetings with the RSC chair, and other duties.  This goes beyond the scope of work in the current contract.  Due to the increased duties beyond the scope of the current contract, the Board wanted to consider an addendum to the contract to increase the compensation during the period Mr. Krajewski would serve as the CAWG chair.  Mr. Krajewski submitted a letter explaining the additional duties while serving as CAWG chair.  He requested an increase of $1,050 per month to his current compensation.  Under the current contract JK Energy receives $13,900 per month.  State Materiel handles the contract, but the Board has to authorize the increase.  The contract follows the State’s fiscal year, so it will affect six months of the current contract and six months of the next contract period.  Since Mr. Grennan is most familiar with how SPP and the CAWG operate, the Board members asked him if he thinks the additional duties justify an increase of $1,050 per month.  Mr. Grennan thought that the additional duties do justify the increase.  He thought that given the current compensation level and the amount of extra duties the additional amount was a reasonable or even conservative request.  Vice Chairman Morehouse moved to authorize an addendum to State Contract 69810 04 increasing the compensation to JK Energy Consulting, LLC from $13,900 per month to $14,950 per month during calendar year 2020 due to the increased workload of Mr. Krajewski taking on the additional duties required of the SPP Regional State Committee’s Cost Allocation Working Group chair while Power Review Board member Dennis Grennan is the President of the Regional State Committee.  Mr. Moen seconded the motion.  Voting on the motion:  Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – absent, and Mr. Moen – yes.  The motion carried 4– 0 with one absent.        

 

The next item on the agenda was the executive director’s report.  The first item was the Southwest Power Pool (SPP) update.  Mr. Morehouse asked if it would be time to consider making the engineering consultant a full-time employee, and who might be the next Board representative to SPP RSC.  This question has been raised several other times in the past.  The Board discussed the benefits and risks or weaknesses of having the consultant position become a full-time staff position.  One issue would be that it would be difficult to pay a state employee at the level necessary to attract an specialized engineer.  Also, under the current contract JK Energy has another retired engineer that goes to some meetings for Mr. Krajewski when two meetings are at the same time or Mr. Krajewski is ill, etc.  As a staff position in a small agency, there would not be any qualified back-up to the staff member.  A staff position would eliminate any potential conflicts of interest, but that issue seems to be addressed well by the new addendum to the contract regarding conflicts.  After the discussion, the Board members said they are comfortable at this time with the CAWG representative remaining a contract position.

 

Executive Director Texel briefly talked about the GridEx V cyber and physical security emergency exercise at LES’s Walt Cannney Service Station on November 13 and 14.  He attended the first day of exercises and Mr. Hutchison attended the second day.  The exercise was to test the limits of preparations the utilities have in place for both cyber and physical security.  Other observers at the exercise were representatives from the Nebraska National Guard, City of Lincoln Water Department, Nebraska State Patrol, Lincoln Police Department, Lancaster County Sherriff’s office and the Nebraska Emergency Management Agency.  As an observer and not participant, Executive Director Texel had an agenda showing what was going to go wrong at what time.  Then you could see how the personnel reacted to each incident.  The recaps before lunch and at the end of the day were the most interesting for observers, since otherwise you were mostly watching the participants work at their duty stations.

 

The Board members mentioned the issue of storage facilities and how those would be dealt with by the PRB.  Would they be considered generation, transmission, or something that is not regulated at all?  Executive Director Texel said that topic was also discussed at the NPA meeting this week.  The NPA is considering proposing legislation that would clarify how to address storage facilities, but it was decided there was not sufficient time to prepare such legislation before this year’s legislative session.

 

The next meetings are scheduled for December 20, 2019, and January 24, 2020.  The Board scheduled its February meeting for the second Monday of the month, February 10.  Executive Director Texel said at the last meeting the Board had indicated it would set its 2020 meetings on the fourth Monday of each month.  Mr. Grennan pointed out the SPP and RSC holds their quarterly meetings on the fourth Monday of the month.  It would therefore work better for him if the PRB meetings were on the second Monday.  The Board members decided to tentatively set their meetings on the second Monday of each month, beginning in February.  The Board members wanted the executive director to check with Mr. Hutchison to make sure he did not have a conflict on the second Mondays.  If he says no, the Board will schedule its 2020 meetings on the second Monday of each Month.

 

Mr. Grennan moved to adjourn the meeting.  Vice Chairman Morehouse seconded the motion.  Voting on the motion:  Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – absent, and Mr. Moen – yes.  The motion carried 4 – 0 with one absent.  The meeting was adjourned at 11:00 a.m.

 

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Timothy J. Texel

Executive Director and General Counsel