January 26, 2018
Note: These minutes are in draft form pending approval by the Board at its next public meeting.
The 790th meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the Liquor Control Commission 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, Mr. Hutchison, and Mr. Moen. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on January 16, 2018. 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 was available in a three-ring binder on a 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 December 15, 2017, meeting. The staff did not have any recommended changes. Vice Chairman Morehouse moved to approve the minutes. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 5– 0.
The next agenda item was acceptance of the expense report for the month of December. In December there was $22,799.50 in personal services, $19,539.89 in operating expenses, and $3,456.35 in travel expenses. The Board received a reimbursement for $129.12 from the Wind & Solar Conference. Vice Chairman Morehouse canceled his registration when the Board canceled its November meeting, and the conference was understanding about it and reimbursed the Board for the registration. The Board did not receive the reimbursement until December. The Board also received reimbursement for Mr. Grennan’s travel to attend the Southwest Power Pool’s (SPP) quarterly meeting in October. The only travel expenses incurred in December was the executive director’s mileage to attend the Nebraska Rural Electric Association’s Annual Meeting in Kearney. That was for $146.59. The total expenses for December were $40,491.32. Vice Chairman Morehouse explained that the number the executive director was providing is an explanation of the cash flow and that the budget expense report numbers are the actual expenses incurred and what the Board approves. Vice Chairman Morehouse moved to accept the expense report for December. Mr. Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – yes, and Mr. Moen –yes. The motion carried 5 – 0.
The next item on the agenda was to consider SAA 100-17-A. This is a joint application to amend retail service area agreement 100. The application was filed on January 3, 2018. This item was previously on the December agenda because a draft application was provided to the Board, but the parties were unable to obtain the required signatures before the Board’s December meeting, so the Board tabled the agenda item to the January meeting. The amendment would transfer territory from Twin Valleys Public Power District to Dawson Public Power District. Twin Valleys PPD would also transfer ownership of approximately two miles of 69 kilovolt subtransmission line located in the area to be transferred. Dawson PPD agreed to upgrade the line, which is need of new conductors and support structures. The territory to be transferred is Sections 27, 28, 33 and 34 and the east half of sections 29 and 32, Township 7 North, Range 22 West, in Gosper County. This area is located southeast of the Village of Elwood. Executive Director Texel recommended approval of SAA 100-17-A. Vice Chairman Morehouse moved to approve SAA 100-17-A. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – yes, and Mr. Moen –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. Mr. Grennan stated that on April 23-24 the SPP Regional State Committee and Board of Directors will meet in Kansas City, Missouri. Then on July 30-31 the meetings will be held in Omaha. He expressed to the Board that if anyone would want to attend the meetings to let him know. On January 15, Mr. Grennan attended the RARTF (Regional Allocation Review Task Force) meeting. At this meeting there was discussion about the Regional Cost Allocation Review (RCAR). This is done every three years. This will be called RCAR3 since it is third time that the group has looked at the formula to review how it allocates its cost to the members.
Executive Director Texel told the Board that the Legislature had confirmed Mr. Grennan to a second term on January 25 by a vote of 39 to 0.
The executive director then discussed the Legislative bills introduced that the Board will be monitoring.
LB 693 was introduced by Senator Blood. The bill regulates and creates criminal offenses regarding the use of unmanned aircraft systems (drones). Utilities are allowed to use drones to inspect, repair or maintain transmission or distribution lines or other equipment or infrastructure. It prohibits flying drones over critical infrastructure facilities. Critical infrastructure is defined as power plants, substations or any public power infrastructure surrounded by a fence. This bill has been referred to the Judiciary Committee. There is no hearing date yet. The executive director recommended the Board remain neutral on the bill and the Board agreed.
LB 722 was introduced by Senator Wayne. The bill would require a renewable energy electric power generation requirement for certain public power and irrigation districts. The language in the bill is applicable to only those districts that cover all or part of more than 50% of the counties in Nebraska. The requirement is for those districts to produce not less than 20% of their electric power generation from renewable resources. Renewable is defined as solar, wind, hydropower, methane gas, nonhazardous biomass and geothermal. The bill would only affect the Nebraska Public Power District. The bill has been referred to the Natural Resources Committee. There is no hearing date yet. The executive director recommended the Board remain neutral on the bill and the Board agreed.
LB 723 was introduce by Senator Wayne. This bill redefines what qualifies as a net metering “qualifying facility”. It increases the net metering facility maximum capacity from 25 kilowatts to 100 kilowatts. The bill was referred to the Natural Resources Committee. No hearing date has been set yet. The Board agreed to remain neutral on the bill.
LB 751 was introduced by the Legislative Performance Audit Committee. This bill changes an agency’s duties with respect to adoption of rules and regulations. Under current law an agency must provide an explanation to the Executive Board of the Legislature and the Committee with jurisdiction over the agency why a rule or regulation was not adopted within one year after a statute is enacted requiring the adoption of new regulations. The bill removes the mandatory and replaces it with “upon request”. The bill also adds a requirement that the agency that failed to adopt the new regulations within the one year must provide an explanation why to the Legislative Performance Audit Committee. This bill was referred to the Executive Board. The hearing was held on January 24. The Board will remain neutral.
LB 752 was introduced by Senator Brewer. The bill limits the authority of certain political subdivisions to acquire rights-of-way. It removes the eminent domain authority for public power districts, corporations, and municipalities engaged in electric generation or transmission to use eminent domain “to acquire right-of-way on behalf of a third party accessing the infrastructure to sell electricity.” The bill was referred to the Judiciary Committee. The hearing date is set for February 8. The Board will remain neutral.
LB 763 was introduced by Senator Harr. The bill prohibits obstruction of a public power district employee. It makes it a Class I misdemeanor to obstruct a public power district employee while performing their duties. The bill was referred to the Judiciary Committee. There is no hearing date yet. The Board will remain neutral on this bill.
LB 809 was introduced by Senator Harr. This bill would prohibit charging members of the Legislature fees for public records requests. The executive director thought this bill may have unintended consequences for agencies absorbing costs for public records requests. Although agencies generally have no objection to providing members of the Legislature with public records without charging for it, many agencies are concerned that this will become a “constituent service”. State senators may request voluminous public records for their constituents, causing some agencies to incur significant costs. The executive director also suspected that some entities will use this to avoid the need for discovery in lawsuits against agencies and submit very voluminous public records requests through a member of the Legislature. The bill was referred to the Executive Board. The executive director recommended the Board remain neutral, and the Board agreed.
LB 814 was introduced by Senator Schumacher. This bill provides a procedure to resolve protests of government service contract procurement decisions that exceed an undetermined dollar amount. The current “appeal” process is limited to allowing an unsuccessful bidder to request a meeting with the Director of the Department of Administrative Services (DAS). The DAS Director’s decision is final and cannot be appealed to the courts. The way the bill is drafted, it requires DAS to adopt regulations declaring that procurement decisions are contested cases and shall be subject to judicial review. The executive director said the problem is that it does not direct DAS to adopt regulations creating a hearing procedure for appeals, which would thereby make the process a contested case under the Administrative Procedure Act. It instead simply directs DAS to declare procurement decisions to be contested cases. But there is no record for a court to use when reviewing the procurement decision. Also, the executive director did not believe an executive agency could grant jurisdiction to the judicial branch. Although there are potential issues with the bill, the executive director doubted the dollar amount would be set low enough to affect the Board’s contracts. He recommended the Board remain neutral on the bill. The Board agreed. The bill was referred to the Government, Military and Veterans Affairs Committee. No hearing date has been set yet.
LB 820 was introduced by Senator Hughes. This is the bill that the Board asked Senator Hughes to introduce to allow persons or entities that fail to submit the certifications under 70-1014.02 within the required 30 days prior to commencement of construction of a privately developed renewable energy generation facility. The bill was referred to the Natural Resources Committee. The hearing is set for January 31. Executive Director Texel will testify in support of the bill. He also confirmed that David Levy will testify in support on behalf of several of his renewable energy developer clients. He requested that other private renewable developers submit a letter in support.
LB 821 was introduced by Senator Hughes. This is the bill the Board asked to be introduced to allow the Board to conduct a special assessment if the initial assessment proved to be inadequate to cover the Board’s annual expenses. That way the Board could collect less than its full appropriation granted by the Legislature in its initial assessment. Any subsequent assessment would be limited by the Legislature’s appropriation. The Governor would still need to approve the assessment figure for any special assessments. The Budget Office told the Board it would no longer approve the Board collecting its entire appropriation in its initial assessment, but rather could only assess based on its historical expenditures. The problem is that the Board lacks the authority to conduct a special assessment to collect the remaining appropriation if expenses are higher than normal in any given year. The Governor’s Office expressed some concerns over the language in the bill. There is not sufficient time for the Board and the Governor’s Office to work on the bill prior to a hearing, or even during the session. It was agreed that the Board will ask Senator Hughes to either withdraw the bill or ask not to have any action taken on it so the parties have time after the session to meet and discuss the language needed to address the situation and hopefully bring a similar bill next year that is acceptable to all parties.
LB 948 was introduced by Senator Murante at the request of the Governor. The bill changes and eliminates provisions relating to the adoption of rules and regulations. The bulk of the bill changes the mandatory “shall” to “may adopt” for numerous statutes that require agencies to adopt regulations. This would eliminate unnecessary regulations that agencies must adopt simply due to the mandatory nature of the language. The bill also removes the requirement that all agencies adopt the Attorney General’s model rules as agency rules whenever they amend their rules, allowing for exceptions for specific agency needs. The model rules are very long and time consuming to go through, especially for small agencies. This is one reason the Board has not adopted new rules and regulations in many years. The bill would instead make the Attorney General’s rules standard for all agencies as part of the Administrative Procedures Act, but allow agencies to modify certain sections based on the particular needs of the agency. Executive Director Texel thought this would be very helpful to the Board and many other agencies. It will allow the staff to go through the Board’s rules of practice and procedure and update them without the need to adopt the “model” rules. The executive director recommended the Board support the bill and authorize him to either testify in support of sections 37 and 38 (dealing with the model rules changes) or to submit a letter in support. Vice Chairman Morehouse moved to support the bill and authorize the executive director to testify or submit a letter in support of sections 37 and 38 of LB 948. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 5 – 0.
LB 1018 was introduced by Senator Geist. This bill would provide for the inadmissibility of audio and visual recordings of Legislative proceedings, require a notice regarding prohibited uses of such recordings if made available on a State agency’s website, and provide that such recordings are not public records. Such audio and visual recordings would not be admissible in any proceeding as evidence of legislative history, actions or intent. The bill was referred to the Executive Board. The hearing date is January 31. The Board is not directly affected by the bill and will remain neutral.
LB 1054 was introduced by Senator Brewer. The bill changes the provisions relating to hearings before the Power Review Board and electric generation using wind. The bill removes wind as one of the renewable fuels eligible to be a privately developed renewable energy generation facility under 70-1001.01(4). The language added to 70-1014 in section 2 of the bill states that if a member of public was determined to have standing in a hearing before the Board, the Board must consider the evidence presented by that person as part of its determination of whether the application will serve the public convenience and necessity. It was the executive director’s reading that the language in section 2 would require the Board to consider evidence from a person with standing as part of its decision as to whether the project meets the public convenience and necessity. The Board discussed the effects of the evidence that would be received under the new language and how the Board would determine what would be admissible. It was Executive Director Texel’s opinion that if evidence was adduced that related to a project which is the subject of a hearing, the evidence would be deemed relevant by the language in the bill, and the Board would be required to consider it as part of its decision whether the project will serve the public convenience and necessity. Chairman Reida noted that the term “public convenience and necessity” has a specific meaning as determined by the Nebraska Supreme Court. He asked the executive director if this bill creates a new definition of the term specifically for the Power Review Board. It was the executive director’s opinion that is exactly what section 2 of the bill does. Chairman Reida asked if the Supreme Court might overturn that if it differed from the Court’s established definition of the term. It was Executive Director Texel’s opinion that the Legislature can provide a definition of a term if it wants, and can modify any definition, assuming the definition is not unconstitutional. Section 2 of the bill would provide a modified definition of the term “public convenience and necessity” for use by the Power Review Board. The Board also discussed the meaning of “member of the public.” The executive director said he and Sara Birkett, the Board’s paralegal, could not find an accepted definition of the term “member of the public” in Nebraska statutes or caselaw. The executive director said his initial reading of that term is that it means an individual person or human being. However, Senator Brewer’s office had indicated it was the Senator’s intent to include corporations and other legal entities. After further discussion, the Board directed the executive director to testify in a neutral capacity asking for a clarification of what is meant by the term “member of the public” and to confirm if the intent in section 2 of the introduced bill is to provide a new definition of the term “public convenience and necessity” for the Power Review Board.
LB 1128 was introduced by Senator Wayne. The bill prohibits counties, public power districts and local government entities from spending legislative appropriations under certain conditions. Executive Director Texel was uncertain what the cause was for the bill, but it appears to limit entities from accepting or spending funds given to government entities from non-government sources. The Board is neutral on the bill.
The executive director noted that the next meeting dates are February 23, March 23, and April 20, 2018. The executive director asked the Board if they would be willing to change the May 25 meeting date to May 18 due to a desire to attend a family event on that same date out of state. The Board members thought the change would be all right and agreed to change the May meeting to May 18.
The executive director also mentioned an article from the American Public Power Association’s online magazine. The article was about President Trump’s decision to impose a 30% tariff on imports of solar panels and modules. The tariff was a result of a complaint filed by two solar manufacturers with the International Trade Commission under section 201 of the Trade Act of 1974, alleging that imported solar cells and modules have caused serious injury to the U.S. solar industry. The International Trad Commission agreed and recommended a tariff.
The Board took up the election of Chair and Vice Chair for 2018. There was discussion on the chair and vice chair. Vice Chairman Morehouse is at the end of his second term, and cannot be reappointed. However, in the past there have been difficulties finding an accountant who was willing to serve on the Board. The Board decided to nominate both Chairman Reida and Vice Chairman Morehouse to a second term as Chair and Vice Chair. The Board will address the issue of a new vice chair when a new appointee is confirmed. Mr. Grennan moved to have Board Chairman Reida and Vice Chairman Morehouse remain in their current offices. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – yes, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 5 – 0.
Mr. Hutchison 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 – yes, and Mr. Moen – yes. The motion carried 5 – 0. The meeting was adjourned at 11:32 a.m.