NEBRASKA POWER REVIEW BOARD
January 25, 2019
The 800th 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 15, 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 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 14, 2018, meeting. The staff did not have any recommended changes. Mr. Moen moved to approve the minutes from the December 14, 2018 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 December. In December, there was $22,846.83 in personal services, $24,651.82 in operating expenses, and $730.17 in travel expenses. The total expenses for December were $48,228.82. Vice Chairman Morehouse moved to approve the expense report. 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 agenda item was to consider renewal of State contract number 69810 O4, the PRB’s contract with JK Energy Consulting to serve as the Board’s consultant for Southwest Power Pool (SPP) issues, including serving as Nebraska’s voting representative on the Regional State Committee’s Cost Allocation Working Group, and advisor to the Board’s member on the Regional State Committee. The contract was originally signed in 2015. The contract can be renewed five times. There are three renewals remaining. The compensation under the current contract is $166,800 annually. There is a provision that allows for the contractor to request an increase annually after the first couple annual renewals. After discussing this option with John Krajewski, owner of JK Energy Consulting, Mr. Krajewski is willing to renew the contract at the current compensation level. The contractual period is from July 1, 2019 to June 30, 2020, which coincides with the State’s fiscal year. Although the Board decides whether to renew the contract, Materiel Division, part of the State’s Department of Administrative Services, is responsible for processing and executing the contract renewal with all contractors. Mr. Krajewski was present at the meeting and offered to answer any questions. During the discussion, the Board agreed that Mr. Krajewski has done a good job representing the Board and the State. Mr. Grennan stated that he values Mr. Krajewski’s opinion and calls upon him to review the items on the agenda prior to meetings. Mr. Krajewski is well-respected in the SPP organization. Vice Chairman Morehouse moved to approve the renewal of contract 69810 O4 at the same compensation level. 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 the executive director’s report. Executive Director Texel asked Mr. Grennan if he had any additional information to add regarding the Southwest Power Pool. Mr. Grennan did not have any additional information.
The director told the Board about a presentation that was given by Frank Daley, executive director of the Nebraska Accountability and Disclosure Commission, to non-code agency directors. The presentation covered conflicts of interest and ethical issues. Mr. Daley had offered to give the presentation to any Board or Commission that requests it. Executive Director Texel asked the Board if it would like Executive Director Daley to give them the presentation during one of the Board’s meetings. The Board discussed the issue and decided that having such a presentation once every few years would be beneficial. The Board asked Executive Director Texel to see if Mr. Daley was available to give the presentation during one of the Board’s meeting.
The next item for discussion was to review the legislative bills introduced during the 2019 legislative session. Executive Director Texel told the Board that in the Governor’s proposed budget bill the PRB’s budget was largely approved as requested. The State Budget Office informed the staff that the difference in the amount requested and the amount recommended in the budget bill was due to the actual amounts for benefits and insurance coming in lower than the placeholder amount the Budget Office had told agencies to include in their budget requests. Once the final insurance and benefits package was determined, it was lower than the placeholder figures that had been used. It appears the rest of the Board’s requested budget was not changed in the Governor’s proposed budget bill.
Mr. Hutchison asked what criteria was used to determine whether a bill effected the Board, and whether the Board would take a position on a bill. The executive director said that typically the Board offers testimony in a neutral capacity on technical issues. The Board historically has taken the position that it is a policy-implementing agency, not a policy-making agency. The Board has been more willing to take a position for or against bills that affect the administrative side of the Board’s activities, such as changes to the Administrative Procedure Act or public records. In the rare instances when the Board takes a position supporting or opposing a bill dealing with issues related to the electric industry, the Board has usually determined that the bill would have unintended consequences impacting Nebraska’s electric ratepayers in a seriously detrimental manner, such as harming system reliability. The Board normally has the executive director point out problem areas and offer to help draft language that addresses the problem.
LB 16 was introduced by Senator Breise. This bill provides for withholding of records relating to certain critical infrastructure. The bill amends section 84-712.05, part of the public records law. It adds a new section 9 that allows withholding documents pertaining to critical infrastructure that could affect electric utilities. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board will remain neutral on the bill.
LB 21 was introduced by Senator Kolterman. This bill provides for a formal protest procedure for state service contracts over $5 million. This gives those bidding on contracts an avenue to protest decisions. Right now the only appeal of a problem with the bidding is to meet with the director of the Department of Administrative Services, and his or her decision is final and cannot be appealed. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board is neutral on this bill.
LB 23 was introduced by Senator Kolterman. The bill changes the Property Assessed Clean Energy Act. The bill clarifies that assessment contracts with municipalities and property owners can include projects that are planned or already in place, including renewable energy systems. The bill was referred to the Urban Affairs Committee. The Board is neutral.
LB 32 was introduced by Senator Kolterman. This bill changes the defined contribution benefit options under the State Employee Retirement Act. This could potentially affect the PRB staff, but would not affect the Board or the electric industry. The bill was referred to the Nebraska Retirement Systems Committee. The Board is neutral.
LB 76 was introduced by Senator Williams. The bill changes provisions relating to the nameplate capacity tax. The bill clarifies that capacity references are AC (alternating current), not to DC (direct current). The bill was referred to the Revenue Committee. The Board is neutral.
LB 99 was introduced by Senator Wayne. The bill amends the Nebraska Prompt Payment Act. The bill would require that state agencies pay small businesses within 15
days of receipt of goods or services, or receipt of the bill, whichever is later. The bill was referred to the Government, Military and Veterans Committee. The Board is neutral.
LB 124 was introduced by Senator Crawford. The bill creates Clean Energy Assessment Districts under the Property Assessed Clean Energy Act. The bill has been referred to Urban Affairs Committee. The Board is neutral.
LB 148 was introduced by Senator Groene. The bill changes the requirements for public hearings on proposed budgets for certain public bodies. The required public hearing on a budget must be held separately from any regularly scheduled meeting of the public body. It requires that all members of the public wishing to address an entity’s proposed budget be allowed to speak at the public hearing. The bill would not apply to state agencies, but it appears it would apply to public power districts. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board is neutral on the bill.
LB 150 was introduced by Senator Brewer. The bill changes provisions relating to access to public records and the fees that can be charged. The bill removes the term “citizens” and replaces it with “residents” of Nebraska. It declares that “resident” includes news media regardless of domicile. It allows public bodies to charge non-residents for the costs to locate and copy the records, including the costs for an attorney to review the records. It leaves in place that Nebraska residents do not pay for the first four hours of time to respond to the records request. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board is neutral.
LB 155 was introduced by Senator Brewer. This changes the eminent domain authority that can be used by certain political subdivisions. It removes the provision in section 70-1014.02 declaring that the use of eminent domain to provide transmission facilities to serve a privately developed renewable energy generation facility is a public use. The bill was referred to the Natural Resources Committee. The Board is neutral.
LB 212 was introduced by the Government, Military and Veterans Affairs Committee. The bill changes the requirements for videoconferencing and telephone conferencing under the Open Meetings Act. The bill is designed to allow the Municipal Energy Agency of Nebraska to hold all but one of its meetings each year by videoconference or telephone conference. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board is neutral.
LB 280 was introduced by Senator Brewer. The bill changes the maximum penalty for a violation of the Nebraska Accountability and Disclosure Act from $2,000 to $5,000. The bill was referred to the Government, Military and Veterans Affairs Committee. The Board is neutral.
LB 285 was introduced by Senator McCollister. This bill would appropriate $200,000 to the Nebraska Power Review Board for a study on transmission issues related to renewable energy projects. The fiscal note was prepared using a comparable study done several years ago as a result of LB 1115 (2015). Obviously, the fiscal note was for $200,000. It is the executive director’s understanding that bills that have a significant fiscal note will be difficult to be approved. The Board asked what testimony might be expected, such as transmission studies conducted by the Southwest Power Pool (SPP) or that the SPP studies transmission needs, but does not do so to favor any particular generation resource. Executive Director Texel said he could pose that question to the Committee’s legal counsel. The Board members agreed that would be a good idea. The is referred to the Natural Resources Committee. The Board is neutral on the bill.
LB 302 was introduced by Senator Hughes. This bill would merge the Energy Office into the Department of Environmental Quality and change the agency’s name to the Department of Environment and Energy. The bill is referred to the Natural Resources Committee. The Board is neutral.
LB 373 was introduced by Senator Brewer. It provides a 3-mile setback requirement for wind turbines from residences unless the owner provides written permission and requires that zoning provisions deal with decommissioning requirements. After July 1, 2021, wind energy projects could not be constructed unless the county has zoning dealing with specified issues. It creates a cause of action for damages for non-compliance. The bill has an emergency clause. The Board is neutral.
LB 509 was introduced by Senator McCollister. It redefines the terms “net metering” and “qualified facility” and changes powers and duties of a local distribution utility. The bill amends 70-2002 to allow distribution utilities to change customer-generators generating over 5 kilowatts (kw) a separate rate based on the utility’s cost of service. It increases net metering from 25 kw to 100 kw, but allows the utility to limit the capacity of a facility to 110% of a customer’s average monthly usage during the previous year. The Board is neutral.
LB 585 was introduced by Senator Friesen. It creates the Renewable Fuel Infrastructure Program, eliminates a sales tax exemption, and provides for grants. The bill deals with E85 ethanol fuel. The Board is neutral.
LB 621 was introduced by Senator Kolowski. It canges provisions relating to solar energy and wind energy, declares certain instruments void and unenforceable, and provides for a civil cause of action for violations. The bill voids any real estate instrument that forbids or restricts the use of solar energy collectors and bans fees to install such systems. It specifically bans homeowners associations from adopting covenants restricting solar installations, any such existing covenants are declared void, and authorizes a cause of action against noncompliant homeowners associations.
LB 700 was introduced by Senator Bostelmann. It provides for decommissioning and reclamation of wind energy facilities. It declares that owners, operators or managers of wind energy conversion systems are responsible for all decommissioning or reclamation costs to return the land back to its natural state. The Board is neutral.
LB 704 was introduced by Senator McCollister. It requires the Department of Administrative Services to issue a request for proposals to provide renewable energy to state-owned buildings. The bill requires that state-owned buildings, including the University system, have renewable energy provide 50% of their power needs by 2022, increasing to 80% by 2031. It also creates a study to determine whether it is cost-effective to use electric vehicles for State vehicles. The Board is neutral.
For the past several years, the Board has established a committee and delegated to it decision-making authority on legislative bills. Legislation can change rapidly due to negotiations and amendments, which cannot be dealt with adequately at monthly public meetings. The committee would consist of two members and the executive director so that it would not violate the Open Meetings Act with a quorum of members. The Board briefly discussed who should be on the committee. Mr. Grennan moved to appoint Chairman Reida and Mr. Hutchison as the committee to deal with any Legislative positions in between Board meetings. 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 to nominate a Chair and Vice-Chair. The Board members brought up that they did not know if Chairman Reida would be reappointed, so they were unsure if he should remain as chair. The executive director informed the Board that the Governor’s office had informed him earlier that morning that the Governor had decided to appoint Chairman Reida for a second term. The Board decided not to take any action on the Chair and Vice Chair, leaving Chairman Reida and Vice Chairman Morehouse in those positions. The decision was based on the fact if there is an appointment to replace Vice Chairman Morehouse as the accountant member, the Board would revisit the issue at that time and select a new Vice Chairperson.
The next meetings are scheduled for February 22, March 22, and April 19. April 19 does not follow the normal fourth Friday due to the Arbor Day holiday.
Mr. Grennan 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 11:51 a.m.
Timothy J. Texel
Executive Director and General Counsel