NEBRASKA POWER REVIEW BOARD
October 25, 2019
The 805th meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the First Floor hearing room, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The roll was called and present were Chairman Reida, Vice Chairman Morehouse, Mr. Hutchison, and Mr. Moen. Mr. Grennan had notified the Board several months prior that he would not be able to attend this meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on October 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 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 south 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 August 23, 2019, meeting. The staff did not have any recommended changes. Vice Chairman Morehouse moved to approve the minutes from the August 23, 2019 meeting. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4– 0 with one absent.
The next agenda item was acceptance of the expense reports for the months of August and September. In August, there were $23,315.15 in personal services, $18,693.79 in operating expenses, and $1,426.15 in travel expenses. The total expenses for August were $44,004.09. In September, there were $25,315.44 in personal services, $16,139.57 in operating expenses, and $4,132.31 in travel expenses. The total expenses for September were $45,587.32. The September travel expenses are higher due to Mr. Grennan having two Southwest Power Pool related trips paid and two meeting expenses for Vice Chairman Morehouse. There was some discussion about where the Board sits with regard to how much of the budget has been used compared to where we are in the fiscal year. The Board discussed whether it was a concern that the Personal Service Limitation shows 27% of that budget account has already been used. The board and staff will monitor this category as the year goes by further. Vice Chairman Morehouse moved to approve the August and September expense reports. Mr. Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4– 0 with one absent.
The next item on the agenda was an application submitted by the Lincoln Electric System for authority to construct .85 mile of 7.2/12.5 kilovolt distribution line in Lancaster County. The application was designated as PRB-3911. The line would be located on the south side of the City, from Rokeby Road to Saltillo Road, along south 14th Street. Mr. Hutchison asked about the next agenda item. The two items are related. The proposed distribution line is within the area that would be transferred as part of the service area agreement change. He wanted to know if the items should be taken up together. Executive Director Texel thought that it would be cleaner for the paperwork to have the items acted on separately. He explained that PRB-3911 was filed on September 19, 2019. The line is to accommodate the Nebraska Department of Transportation’s South Beltway project around Lincoln. The application included the Consent and Waiver from Norris Public Power District. Norris PPD consented to the project and waived any hearing. The Board consulted with the Nebraska Game and Parks Commission, as required by Nebraska revised statute 37-807(3). A letter from Game and Parks was received on October 4, 2019, stating that the project is in the range of the threatened Northern Long-Eared Bat and Western Prairie Fringed Orchid. The Commission stated that there is no habitat suitable for these species in the project area. The Commission determined the project would have “no effect” on either species and did not object to the approval of the project. Vice Chairman Morehouse moved to approve application PRB-3911. Mr. Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4– 0 with one absent.
The next item on the agenda was to consider SAA 85-19-A. This is a joint amendment by the Lincoln Electric System and the Norris Public Power District to amend retail service area agreement 85. The amendment would transfer a tract of land on the south edge of Lincoln from Norris PPD to LES. The area involved is approximately 3.9 square miles along Saltillo Road from 6th Street to 120th Street. The application was filed October 11, 2019. There is a map, labeled Exhibit A-2, that shows the area to be transferred. Exhibit A-6 is a metes and bounds description of the territory. There are 95 customers in the area to be transferred. LES has agreed to pay Norris PPD $2,375,000 for the facilities and the loss of customers in the territory. The Board members discussed the application and expressed appreciation for how well the two utilities were working together to effectuate the transfer and determine a fair payment. The Board was not involved in the decision of the amount of payment. The two parties worked that out prior to submitting the amendment. Executive Director Texel noted that in the distant past Norris PPD and LES did not always work well together. The utilities previously went through a mediation process and worked out a system to deal with the City of Lincoln’s expansion into Norris’s territory. Mr. Hutchison moved to approve joint application SAA 85-19-A. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4– 0 with one absent.
The next item on the agenda was the executive director’s report. The first item was the Southwest Power Pool (SPP) update. Since Mr. Grennan was not there the Board did not discuss SPP activities. The Board did have a couple of questions about the monthly activities update letters from JK Energy. The Board wanted to know what was meant by the comment regarding increasing rates at the bottom of page 1 and on page 2 of the October letter. Mr. Moen asked if there was an explanation for why OPPD and LES abstained from a vote described in the Market Working Group activities on page 3 of the September letter. Executive Director Texel stated that he would ask Mr. Krajewski if he could provide further explanation on those two issues and provide the response to the Board members.
Executive Director Texel briefly described LSP Holdings, LLC v. Sieben, docket no. 18-2559. This is an appeal from a Minnesota federal district court challenging Minnesota’s statute providing its incumbent transmission owners with a right of first refusal to construct addition transmission assets. The plaintiff alleges that Minnesota’s right of first refusal law violates the dormant commerce clause. The federal district court ruled in favor of Minnesota. Executive Director Texel said the case was discussed briefly at the APPA legal seminar in Portland. The 8th Circuit has not ruled in the case yet, but he wanted the Board to be aware of the case. Nebraska is in the 8th Circuit, so a ruling could have direct implications for Nebraska’s right of first refusal statute.
Mr. Texel then discussed the Federal Energy Regulatory Commission’s (FERC) Notice of Proposed Rulemaking (NOPR) to amend its regulations pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA). The Board was shown a copy of a PowerPoint presentation that was used in a briefing given by FERC legal staff to the Electricity Staff Subcommittee of the National Association of Regulatory Utility Commissioners (NARUC). The Nebraska State Bar Association had also prepared a synopsis of the proposed amendments. There was discussion concerning FERC and the definitions for state regulatory entities and state commissions. State regulatory agencies and state commissions are normally defined under PURPA and the Federal Power Act as the state entity that sets or approves retail electric rates. Although the Power Review Board is the agency in Nebraska with primary jurisdiction over electric power suppliers, it is not defined as a State Commission because it does not approve retail rates. Nebraska has no state agency that would be a “State Commission”. After discussion of the issue, the Board decided the PRB should submit comments to FERC on the NOPR. The comments would explain that the PRB generally is supportive of the proposed PURPA changes. In addition, the comments would ensure that FERC understands how Nebraska functions, in that it is a public power state and would not have a state agency with statewide jurisdiction to exercise some of the discretionary functions set out in the NOPR. This would be different from the other 49 states. The Board appointed a committee of Chairman Reida, Mr. Hutchison and Executive Director Texel to draft the comments. The Board will consider the comments at its December 20 meeting.
The next meetings are scheduled for November 22, and December 20, 2019. The executive director asked about the January meeting. He wanted to know if the Board would like to set the meeting for 2nd or 4th Monday or Friday, to accommodate the schedule of the new Board member that will have her confirmation hearing most likely in late January or February 2020. The Board decided to set its January 2020 meeting on the fourth Friday, which is January 24. Once the Legislative session convenes it will be easier to determine when to start scheduling the meetings on Monday to accommodate the new Board member.
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 – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4 – 0 with one absent. The meeting was adjourned at 11:01 a.m.
Timothy J. Texel
Executive Director and General Counsel