NEBRASKA POWER REVIEW BOARD
February 23, 2018
The 791st 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 February 13, 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 January 26, 2018, 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 January. In January, there was $32,146.83 in personal services, $16,093.01 in operating expenses, and $922.25 in travel expenses. The total expenses for January were $46,162.09. Vice Chairman Morehouse moved to accept the expense report for January. 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 amending Guidance Document 12. The guidance document sets out the Board’s interpretation regarding when it has jurisdiction in situations where a non-utility provides electricity to third parties. Guidance document 12 contains a reference to certified renewable export facilities (CREF). In 2016 the Legislature enacted LB 824, which repealed the CREF provisions in Neb. Rev. Stat. section 70-1014.02. The CREF provisions were replaced with language pertaining to privately developed renewable energy generation facilities. The references to CREF in the guidance document therefore need to be replaced with references to “private developed renewable energy generation facilities” to be consistent with the language in section 70-1014.02. The Board members had been provided with a copy of the guidance document showing language to be added with underlines and text to be removed shown using overstrikes. Vice Chairman Morehouse moved to approve the proposed amendments to Guidance Document 12. 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 renewal of State Contract 69810 O4. This is the contract currently with JK Energy Consulting LLC to serve as the Board’s consultant for Southwest Power Pool issues, including serving as Nebraska’s voting representative on the Regional State Committee’s Cost Allocation Working Group. The contract term would be from July 1, 2018 to June 30, 2019. This is an annual contract, allowing up to five renewals. There are three renewal remaining. The current contract period ends June 30, 2018. The contract is for $166,800 annually, or $13,900 a month. The contract contains a clause that allows for additional compensation if JK Energy is requested to perform additional duties outside the scope of work set out in the contract. The contract sets out an hourly rate that will be used if such additional work is authorized. The Board designated a committee consisting of Chairman Reida, Mr. Grennan and the executive director to negotiate new language in the Conflicts of Interest clause of the contract to address concerns that have arisen. The Board’s committee met with Mr. Krajewski, the principal of JK Energy Consulting, and worked out language acceptable to both sides. If the Board approves the new language, it must then also be approved by the DAS legal counsel. Once DAS legal approves the language the contract can be renewed with the new Conflicts of Interest language as an addendum. The Materiel Division of the State Department of Administrative Services (DAS) is responsible for executing the contract. Mr. Hutchison moved to approve renewal of State Contract 69810 04 with JK Energy Consulting for the 2018-2019 contract term, as amended by the proposed new language to the Conflicts of Interest section. 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 update the Board on recent SPP activities, including publicly available information regarding the Mountain West transmission group joining the SPP. Mr. Grennan stated that on April 23-24, 2018, the SPP Regional State Committee (RSC) and Board of Directors will meet in Kansas City, Missouri. Then on July 30-31 the RSC and SPP Board meetings will be held in Omaha, Nebraska. He asked the other Board members to let him know if any of them would like to attend the RSC meeting.
The executive director then discussed the bills pending in the Nebraska Legislature that the staff is 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, which includes power plants, substations or any public power infrastructure surrounded by a fence. This bill was referred to the Judiciary Committee. The Board is neutral on this bill. The hearing will be in the afternoon on the same day as the Board’s meeting, on February 23. The bill was not prioritized and has not been moved to General File.
LB 722 was introduced by Senator Wayne. The bill would require a renewable energy electric power generation requirement for certain public power districts. The language in the bill applies only to those districts that cover all or part of more than 50% of the counties in Nebraska, which would only apply to the Nebraska Public Power District. The requirement is for those districts to produce not less than 20% of their electric power generation from renewable resources. The hearing before the Natural Resources Committee was held February 21. The Board is neutral on the bill. The bill was not prioritized and has not yet been moved to General File.
LB 723 was introduce by Senator Wayne. This bill would increase the net metering facility maximum capacity from 25 kilowatts to 100 kilowatts. The haring before the Natural Resources Committee was held on February 21. The bill was not prioritized and has not yet been forwarded to General File. The Board is neutral.
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 if an agency fails to adopt required new regulations within the one year, the agency must provide an explanation to the Legislative Performance Audit Committee. The hearing before the Executive Board was held on January 24. The bill was placed on General File on February 2. It was designated as a Speaker Priority bill. The Board is neutral on the bill.
LB 752 was introduced by Senator Brewer. The bill limits the authority of certain political subdivisions to acquire rights-of-way. It removes the authority for public power districts, cooperatives 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 hearing was held Judiciary Committee on February 8. It has not been placed on General File and was not prioritized. The Board is 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 his or her duties. The hearing was held before the Judiciary Committee on February 21. The Board is still being held by the Committee and was not prioritized. The Board is neutral on the 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 hearing was held before the Executive Board on January 31. The bill was not prioritized and has not been placed on General File. The Board is neutral.
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 language used in the bill requires the Department of Administrative Services to adopt regulations declaring that procurement decisions are contested cases and shall be subject to judicial review. The executive director pointed out at last month’s meeting that the bill 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. Under this process, there would be 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. The hearing was held before the Government, Military and Veterans Affairs Committee on February 21. The bill is still held by the Committee and has not been prioritized. The Board is neutral on the bill.
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 hearing on LB 820 was held before the Natural Resources Committee on January 31. Attorney David Levy testified in favor of the bill on behalf of three private development companies he represents. The Wind Coalition also submitted a letter in support of the bill. There was no testimony in opposition to the bill. Senator Hughes told the executive director the bill would be amended into LB 1008, which is one of the Committee’s priority bills.
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. Since the Governor’s Office expressed some concerns over the language in the bill, the executive director asked Senator Hughes to either withdraw the bill or not move it to General File. That will give the Board and the Governor’s office time in the interim to meet to discuss the best way to address the concerns and hopefully introduce a similar bill next session. There is not time to do that this session. Senator Hughes filed a motion to withdraw the bill, which was approved by the Legislature on February 1.
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 testified in favor of the bill at the hearing before the Government, Military and Veteran’s Affairs Committee on February 15. Senator Thibodeau designated this as her priority bill.
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 hearing before the Executive Board was held on January 31. The bill is still being held by the Committee and was not prioritized. The Board is neutral.
LB 1054 was introduced by Senator Brewer. The introduced version of the bill changes the provisions relating to hearings before the Power Review Board and electric generation using wind. The bill would remove 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. Executive Director Texel testified in a neutral capacity at the hearing before the Natural Resources Committee on February 1. He asked the Committee for clarification what the term “member of the public” means, and for clarification that Senator Brewer and the Committee intend to create a new definition of the term “public convenience and necessity” that would be followed by the Power Review Board that is different from the normal meaning of the term. The executive director told the Board there is a good deal of negotiations going on regarding the bill, and the introduced version is no longer being considered. The Committee is currently deadlocked 4 to 4 on the bill, so Senator Brewer will likely submit another amendment to address the concerns of one or more Committee members. Senator Brewer designated this as his priority bill.
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 hearing was held by the Government, Military and Veterans Affairs Committee on January 31. It was not prioritized. The Board is neutral on the bill.
The executive director explained that he checked with the Governor’s office and no accountant has submitted an application to fill the seat currently held by Vice-Chairman Morehouse. The deadline for submitting appointees to the Legislature in order to hold a confirmation hearing yet this session already passed, so any appointment would be held until after end of the Legislative session. The reason hearings are limited is due to the closure of almost all hearing rooms for renovation. That means that Vice Chairman Morehouse will continue to serve until his replacement is confirmed by Legislature next session or unless Vice Chairman Morehouse would resign, at which point any successor that had been appointed would become an “acting” member of the Board that could be seated and vote until the Legislature acted on his or her appointment next session.
The executive director noted that the next meeting dates are March 23, April 20, and May 18, 2018. The May meeting date was moved to accommodate a scheduling conflict, so it will not be on the normal fourth Friday of the month.
Vice Chairman Morehouse Mr. Hutchison moved to adjourn the meeting. 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 meeting was adjourned at 10:32 a.m.
Timothy J. Texel
Executive Director and General Counsel