NEBRASKA POWER REVIEW BOARD
May 31, 2019
The 802nd 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 May 21, 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 north 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 March 22, 2019, meeting. The staff did not have any recommended changes. Vice Chairman Morehouse moved to approve the minutes from the March 22, 2019 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 reports for the months of March and April. In March, there were $22,568.97 in personal services, $16,158.43 in operating expenses, and ($717.68) in travel expenses. The total expenses for March were $38, 009.72. In April, there were $23,301.00 in personal services, $17,100.68 in operating expenses, and $1,384.25 in travel expenses. The total expenses for April were $41,785.93. The March travel expenses show a surplus due to receipt of reimbursements checks from the Southwest Power Pool received during April. The PRB pays for Mr. Grennan’s travel expenses to attend SPP functions. SPP will reimburse its members for the travel expenses. The SPP will also pay for travel expenses directly to commissioners and staff, but under Nebraska law the expenses would constitute a “gift” that is legal, but must be reported on the annual financial disclosure to the Accountability and Disclosure Commission. If the agency pays for the travel it avoids the reporting requirement. The In March the Board paid $2,056.77 in travel expenses, but received $2,774.45 in SPP reimbursements. The difference is the $717.68 surplus. One of the reimbursements was a check that SPP issued in January, but the PRB never received it, so SPP stopped payment on the check and issued a new one. That check was for $869.09 for Mr. Grennan’s travel in December 2018. In April the Board paid $2,399.32 in travel expenses, and received $1,015.07 in SPP reimbursements. Vice Chairman Morehouse moved to accept the expense reports. 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 consider whether the Board will reimburse expenses associated with the executive director or board members who want to attend the 2019 Wind and Solar Conference. This is the 12th Annual Nebraska Wind and Solar Conference. The event will be held in the Cornhusker Marriott hotel in Lincoln, Nebraska. The only expenses that would be incurred by the executive director would be the registration of $125. Registration increases if paid in October or later. If any of the Board members would want to attend there would be mileage reimbursement and possibly lodging. Chairman Reida stated that he thought it would be good to have at least one Board member attend the conference. Vice Chairman Morehouse stated that he would be able to attend. The Board meeting is the Friday before and he could stay the weekend and the conference early the next week. Vice Chairman Morehouse moved to approve the executive director’s expenses and any Board members who wish to attend the conference. 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 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 CREF definition was in subsection (2) of section 70-1001.01. The definition of “electric supplier’ had been in subsection (3), but after the enactment of LB 824, it was renumbered to be the new subsection (2). The amendment to Guidance Document 12 therefore changes the citation to the definition of “electric supplier” from 3 to 2. The Board members had been provided with a copy of the guidance document showing the three places the citation occurs and needs to be updated from (3) to (2). Mr. Hutchison moved to approve the proposed amendments to Guidance Document 12. 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 next item on the agenda was consideration of the Board’s assessment figure for fiscal year 2019-2020. The PRB is entirely cash funded, which means its operating expenses are paid by assessments levied against Nebraska’s electric power suppliers. The PRB does not receive any general funds from tax revenue. Each power supplier pays a pro-rata share of the Board’s operating budget based on each utility’s gross income from electricity and related sales during the preceding calendar year. A certificate of gross revenue is sent to each power supplier to certify its gross revenue from electricity and related sales. Once all the certificates are returned, the Board’s business manager calculates the total of all the power suppliers’ gross revenue. In the past, the Board would collect the entire amount appropriated by the Legislature. The Boared would have to decide how much of the PRB’s unused funds from the current fiscal year would be retained as a reserve fund, then the Board would credit the remaining balance against what the utilities owe. The reserve funds are used for emergency expenditures or for the agency’s operations during a new fiscal period when there is a delay in collecting the new fiscal year’s assessment amount. The State Budget Office informed the PRB that it needed to base its assessment on actual historical expenditures and not on the appropriation approved by the Legislature. The Budget Office also informed the Board that it must reduce its cash balance, but it could keep a reserve fund of $135,000. The $135,000 is slightly more than three months of Board expenses. In the past the Board would determine its assessment figure, then submit it to the Governor for approval. If the Governor did not approve of the figure, the Board would need to select a new assessment figure. Since the Board only meets monthly, that can delay collection of assessments by a couple months. Last year the Board asked the staff to coordinate with the Budget Office to determine what assessment figure the Budget Office would recommend for approval to the Governor. By coordinating with the Budget Office prior to submitting the assessment figure, it was hoped that process would greatly increase the chances the proposed assessment figure would be approved, and expedite the process. Executive Director Texel and Ms. Hallgren did meet with Budget Office representatives to discuss the amount of reserve funds and the proposed assessment figure to present to the Board prior to bringing that figure to the Board. The funding appropriated to the Board by the Legislature for fiscal year 2019-2020 is $677,646. The budget is approximately $10,000 more than last year, mostly due to increases in health care and other expenses that are beyond the Board’s control. The historical annual spending level is approximately $520,000. Ms. Hallgren prepared a short memo explaining the budget and assessment situation. In order to collect $520,000 and keep $135,000 as a reserve, the PRB would need to levy an assessment figure of 12.5337184 cents per $1,000 gross revenue. The previous year’s assessment was 12.3775373. The Budget Office agreed to recommend approval of the proposed 12.5337184 assessment figure. It is executive director’s understanding that the PRB’s Budget Analyst discussed the assessment figure with the Governor’s Chief of Staff and they are in an agreement with the recommended number. One of the issues that was discussed is that the Board is not collecting its full appropriation authorized by the Legislature. The Board asked if the agency would happen to have some expenses that would be unexpected and require the need for additional funding, could the Board collect the remaining amount of the appropriation that was not collected initially. Executive Director Texel said it is his opinion that the Board could not. The statute pertaining to the assessment for the Board’s budget does not provide authorization for a special assessment to collect an additional amount, even if it was still within the amount allocated by the Legislature. There is another statute that does authorize the Board to use a special assessment, but it is limited to a situation where the Board incurs expenses to hire consultants in order to prepare the Long-Range Coordinated Power Supply Plan in the event the designated organization (currently the Nebraska Power Association) is unable to unwilling to prepare the report. Vice Chairman Morehouse moved to approve 12.5337184 cents per $1,000 gross revenue as the Board’s assessment figure for fiscal year 2019-2020. 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. The first item was the Southwest Power Pool (SPP) update. Mr. Grennan had a HITT power point presentation that was presented to the RSC members the quarterly SPP meeting in April. He discussed the key points of the presentation. Another item discussed was cost allocation for energy storage systems.
The next item for discussion was to review the legislative bills pending in the 2019 session of the Nebraska Legislature. The legislative session is scheduled to end today, May 31, 2019.
LB 16 was introduced by Senator Breise. The bill pertains to public records. It allows critical energy or electric infrastructure records to be withheld from public disclosure. The bill amends section 84-712.05, which is part of the public records law. The bill was referred to the Government, Military and Veterans Affairs Committee. The Legislature passed this bill by a 45-0 vote on March 15. The Governor signed the bill on March 21. Since the bill did not contain an emergency clause, it will go into effect three months after the end of the Legislative session.
LB 76 was introduced by Senator Williams. The bill changes provisions relating to the nameplate capacity for renewable energy infrastructure. The bill would clarify that nameplate capacity references are to alternating current (AC), not to direct current (DC). The bill was referred to the Revenue Committee. The bill was placed on General File on March 13, but did not receive a priority designation, so did not move from General File.
LB 124 was introduced by Senator Crawford. The bill amends the law authorizing Clean Energy Assessment Districts under the Property Assessed Clean Energy Act. The bill allows the districts to be separate, overlapping, or coterminous. Also, districts can be created anywhere within the territory or zoning jurisdiction of the municipalities that form the district. It also clarifies that the district’s governing body shall be comprised fo members of the governing bodies of the participating municipalities. The bill was passed by a 44-0 vote on March 15. The Governor signed the bill on March 21. Since there was an emergency clause, the bill is already in effect.
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 defines the term “resident” to include news media regardless of domicile. It allows public bodies to charge non-residents for the costs to locate and copy 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 state employee time needed to respond to the records request, and they do not pay for any attorney review time. The bill was referred to the Government, Military and Veterans Affairs Committee and the hearing was held on February 8. The bill did not advance out of committee and did not receive a priority designation.
LB 155 was introduced by Senator Brewer. The bill amends section 70-1014.02, regarding privately developed renewable energy generation facilities. The bill adds language at the beginning of the statute finding that the Nebraska Sandhills provides irreplaceable habitat for migratory birds and other wildlife, is home to numerous ranchers and famers, and contains numerous priceless archaeological sites related to American Indians. The primary change to the bill is to amend the sentence stating that “The exercise of eminent domain to provide needed transmission lines and related facilties for a privately developed renewable energy generation facility is a public use.” The bill adds language at the beginning of that sentence stating that “There is a rebuttable presumption that . . . .” The executive director told the Board there is some difference in opinion as to the effect of the amendment. At least one or two people have claimed the decision on whether the line is a public use would come to the Board. The executive director’s opinion is that the challenge based on public or private use would go to a court, probably the applicable district court. The bill was quite controversial at first, but the parties arrive at the rebuttable presumption language as a compromise. The bill was passed on a 44 – 0 vote. The Governor signed the bill on May 17. There is no emergency clause, so the bill will go into effect three months from the end of the session.
LB 280 was introduced by Senator Brewer. The bill would have increased 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 bill was advanced to General File on March 5, but it did not receive a priority designation and did not advance.
LB 285 was introduced by Senator McCollister. This bill would appropriate $200,000 to the Nebraska Power Review Board to conduct a study of transmission issues related to renewable energy projects. At the hearing it was explained that the advancement of solar facilities was the driving force behind the bill. The fiscal note was prepared using a comparable study done several years ago as a result of LB 1115 in 2014. Obviously, the fiscal note was for $200,000. The bill was referred to the Natural Resources Committee, but was not advanced to General File.
LB 302 was introduced by Senator Hughes at the Governor’s request. This bill would merge the Energy Office into the Department of Environmental Quality and change the new agency’s name to the Department of Environment and Energy. The Legislature passed this bill by a 45-0 vote on March 15. The Governor signed the bill on March 21. The bill had an emergency clause, so it is already in effect.
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. After July 1, 2021 wind turbines cannot be constructed unless the county has zoning regulations addressing setbacks, noise standards, decommissioning, and fees for conditional use permits. The decommissioning must include a surety. The bill was not advance out of committee and did not receive a priority designation. Senator Brewer requested an Attorngy General’s opinion on zoning jurisdiction for setbacks. The Attorney General’s opinion was just released on May 29, 2019.
LB 509 was introduced by Senator McCollister. It redefines the terms “net metering” and “qualified facility” and changes the powers and duties of the local distribution utilities. The bill amends 70-2002 to allow distribution utilities to charge customer-generators with facilities over 5 kilowatts (kw) capacity a fixed rate based on the utility’s cost of service. The bill also increases the allowable maximum capacity of a net metering facility from 25 kw to 100 kw. However, the utility can limit the capacity of a facility to 110% of a customer’s average monthly usage during the previous year. The bill was referred to the Natural Resources Committee. The bill was not advanced out of committee, and did not receive a priority designation.
LB 700 was introduced by Senator Bostelmann. It would provide requirements for decommissioning and reclamation of wind energy facilities. It would have made any person owning, operating, or managing a wind energy conversion systems responsible for all decommissioning or reclamation costs, and they must return the land back to its condition in which it existed prior to commencement of construction of the facility. The bill requires the removal of all above ground and below ground equipment. The bill was advanced to General File and was designated as a priority bill by the Natural Resources Committee. However, the bill was controversial and did not advance from General File.
The next meetings are scheduled for June 21, July 26 and August 23, 2019. The executive director told the Board that in May the hearing room will be moving to the first floor of the State Office Building, in the hallway across from the Scooters coffee shop. The door to the hearing room is on the west side of the hallway. It has the seal of all three agencies that pay for the hearing room – the Power Review Board, the Liquor Control Commission, and the Commission of Industrial Relations.
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 10:59 a.m.
Timothy J. Texel
Executive Director and General Counsel