NEBRASKA POWER REVIEW BOARD
September 28, 2018
The 797th 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 September 18, 2018. All background materials for the agenda items to be acted on were 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 August 24, 2018, meeting. The staff did not have any recommended changes. Vice Chairman Morehouse moved to approve the minutes from the August meeting. 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 August. In August, there was $32,103.98 in personal services, $17,164.32 in operating expenses, and $71.20 in travel expenses. The total expenses for August were $49,339.50. Vice Chairman Morehouse moved to accept the expense report for August. 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 was to consider SAA 160-18-A. This is a joint application submitted by the City of Kimball and High West Energy, Inc. The amendment is based on an annexation. The annexation occurred several years ago. High West Energy would transfer two tracts of territory on the southern edge of the City. Kimball annexed the two tracts of territory and began serving customers in the territory, but forgot to file an application with the Power Review Board to officially amend the service area boundary. The parties mutually agreed to the transfer even though it was not as of right on Kimball’s part any longer. When Kimball took over the territory it did compensate High West Energy for the loss of infrastructure and customers. This amendment would transfer the territory and make the new boundary official. Mr. Hutchison moved to approve amendment SAA 160-18-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 Board recessed from 9:17 to 11:04. During the recess the Board heard oral arguments on SAA 400-16-A, between the City of Neligh and the Elkhorn Public Power District. All Board members were again present when the meeting was called back into session.
The next item on the agenda was to consider whether the Board would submit a letter to the Federal Energy Regulatory Commission concerning the Southwest Power Pool’s (SPP) cost allocation methodology for the SPP-AECI Morgan Transformer. The project will be located on the seam, or edge, of SPP’s operating area and an adjoining utility. The SPP submitted a filing to the Federal Energy Regulatory Commission (FERC) requesting that SPP be allowed to regionally fund the cost of the transformer. Due to the voltage of the transformer, under SPP’s highway-byway cost allocation methodology the transformer would normally be funded by the local utility in whose service area the transformer is located. Since the project is on a seam, it will benefit a much broader area than just the local utility, so SPP believes the regional cost allocation method is warranted in this case. Mr. Krajewski, the Board’s consultant that represents the PRB on the SPP Cost Allocation Working Group, was present at the meeting to explain the details of the project and further explain the justification for regionally funding this project. The project is in an area that has congestion issues. The congestion has caused increased costs to SPP utility members, including the Omaha Public Power District, Nebraska Public Power District, and other transmission-owning SPP utility members. The project would help relieve this congestion and reduce expenses. The SPP’s Regional State Committee (RSC) had unanimously voted to support the SPP’s filing. The Missouri Public Service Commission asked if the PRB would consider submitting a letter to FERC in support of the SPP’s request. The South Dakota Public Utilities Commission also submitted a letter in support of the filing. Mr. Grennan and Executive Director Texel had discussed this with Mr. Krajewski and all three thought it would be a good idea for the Board to submit a letter joining the Missouri and South Dakota Commissions in supporting the SPP filing. Executive Director Texel and Mr. Krajewski prepared a draft letter for the Board to consider. The letter had been provided to the Board and a copy was in their meeting notebooks. Mr. Hutchison asked if the Board had taken this type of action in the past. Executive Director Texel said the Board has made filings with FERC, as well as having submitted letters in support or opposition to a filing and provided comments on matters before FERC, but it is not a common occurrence. Mr. Hutchison moved to approve submitting the draft letter to FERC in support of the SPP’s filing regarding the SPP-AECI Morgan Transformer. 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.
The next item on the agenda was the Board’s preparation of the executive director’s annual performance evaluation. It has been the Board’s practice in recent years to leave this responsibility to the Chairman. Chairman Reida stated that he would prepare the evaluation, but he would like the other Board members to review the evaluation form and provide him with comments and input regarding the review. He would like to have any input within the next two weeks so that he could submit the evaluation before the next Board meeting.
The next item on the agenda was the executive director’s report. Mr. Grennan and Mr. Krajewski reviewed the majority of issues involving the SPP during the discussion of the letter in support of the SPP’s Morgan Transformer cost allocation filing discussed earlier.
The executive director informed the Board about a letter the Board had received from the WildEarth Guardians. The letter was received on September 11. The group requested that the PRB open an informal investigation into whether Tri-State Generation and Transmission Association’s wholesale rates were just and reasonable, and to require Tri-State to divest itself of its coal-fired generation facilities and replace them with renewable generation resources. In his response letter, the executive director stated that the PRB lacked the statutory authority to review the wholesale rates or require a utility to divest itself of any type of generation facility. The group cited to Neb. Rev. Stat. section 70-1002.01 to assert that the PRB has authority over wholesale rates. However, that statute provides the PRB with jurisdiction over wholesale service area agreements, and to make sure that the rates resulting from a wholesale service area agreement would be just and reasonable. It does not create jurisdiction over the rates in general. The letter points out that the PRB does have jurisdiction over wholesale rate disputes, but only when a complaint is filed by a power supplier, not a retail customer or a group such as the WildEarth Guardians. Even then, the PRB’s decision is advisory only. The executive director said he wanted the Board to be aware of the organization’s request and the response that he sent back to them.
The Board had a copy of the scheduled 2019 PRB meetings. The meetings are scheduled for the fourth Friday of each month except for the months of April, November, and December, which fall on a State holiday and so were rescheduled to another Friday in each of those months.
The executive director noted that the next meeting dates are October 26, November 16, and December 14, 2018. The November meeting will have the Monolith presentation. The December meeting will include a presentation by SPP officials updating the Board about SPP activities.
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 – yes, and Mr. Moen – yes. The motion carried 5 – 0. The meeting was adjourned at 12:07 p.m.
Timothy J. Texel
Executive Director and General Counsel