NEBRASKA POWER REVIEW BOARD
December 20, 2019
The 807th 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. 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 December 10, 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 November 22, 2019, meeting. The staff did not have any recommended changes and no one had contacted the staff to request any. Vice Chairman Morehouse moved to approve the minutes from the November 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 report for the month of November. In November, there were $23,744.21 in personal services, $16,537.73 in operating expenses, and $3,313.81 in travel expenses. The total expenses for November were $43,595.75. Mr. Grennan said he appreciated the explanations set out in the cash flow sheet that was discussed at last month’s meeting. The cash flow sheet is very useful for tracking where the expenditures are in relation to the available cash. Vice Chairman Morehouse moved to accept the November expense report. 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 application PRB-3913. This is an application filed by Southern Public Power District for authority to construct .9 mile of 69-kilovolt subtransmission line with .15 mile of 12.47 kilovolt (kV) distribution line underbuilt in Buffalo County, Nebraska. The project will upgrade an existing 34.5 kV line to 69 kV. If the district were just reconductoring at the same voltage the application would not be necessary. The district needs to obtain the Board’s approval due to the increase the voltage. This gives the utility with the service area rights to the project location the ability to file either an objection or a consent and waiver. The application was filed on November 15, 2019. The executive director explained that the Nebraska Public Power District plans to upgrade its 115 kV Elm Creek substation. Southern PPD’s existing line connects to the substation, and the bay that it connects to will be upgraded from 34.5 kV to 69 kV. Due to this Southern PPD needs to upgrade its line from 34.5 kV to 69 kV. Southern PPD’s line was also quite old and needed to be reconductored, anyway. Dawson PPD submitted a Consent and Waiver form waiving the need for a hearing and consenting to the approval of the project. The Board consulted with the Nebraska Game and Parks Commission as required by Nebraska Revised Statute section 37-807(3). In a letter dated December 3, 2019, the Commission determined the project is in the range of the endangered Interior Least Tern and Whooping Crane, and the threatened Piping Plover, Northern Long-Eared Bat and River Otter. There is suitable habitat in the project area for all the mentioned species. The Commission provided conservation conditions that Southern PPD should implement to ensure no harm comes to the species or their critical habitat. The Commission determined that if Southern PPD implements the conservation conditions set out in the letter, the project “May affect, but is not likely to adversely affect the mentioned species,” and with those conditions, the Commission did not object to the approval of PRB-3913. Vice Chairman Morehouse moved to approve PRB-3913. Mr. Grennan seconded the motion. 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 Norris Public Power District’s Petition for Charter Amendment 20. The application was filed on November 6, 2019. The purpose of the amendment is to reduce the number of directors from 13 to 12, and to redistribute the population from voting subdivision 6 into its adjoining subdivisions. The director representing subdivision 6 moved out of the district. As required by state law a notice was published in at least two local newspapers with general circulation in the District’s territory for three consecutive weeks prior to acing on the amendment. Notice was published on November 13, 20, and 27, 2019 in the Beatrice Daily Sun and the Seward County Independent. The notice explained that any interested party could file a protest or objection by December 18. No Protests or Objections were filed. Since no protests or objections were filed, state law allows the Board to waive a hearing on the Petition. Exhibit B shows the proposed population distribution after the proposed amendments. Based on caselaw, the PRB’s normal rule is that if the variance in population between voting subdivisions falls within ten percent of the ideal, the redistribution is given a presumption that the District made a good faith effort to distribute the population as equally as possible. Executive Director Texel told the Board the Nebraska Supreme Court has said that distribution of population for voting purposes does not require mathematical perfection, as that is normally very difficult or not possible and can create confusion for the public. It often makes sense to follow geographic features such as rivers and other boundaries in an effort to avoid splitting up municipalities or having voting areas split by a river, etc.
According to the numbers on Exhibit B, there are subdivisions that would be outside the ten percent variance under the proposed redistricting plan. Mr. Hutchison asked for a review of the criteria that the PRB is to use when approving voting subdivisions based on equal representation issues. Executive Director Texel said the controlling statute is section 70-664. That statute states “Unless it shall appear affirmatively that the adoption of such proposed amendment will be contrary to the best interests of such district, or that it will jeopardize and impair the rights of the creditors of such districts, or of other persons, the Nebraska Power Review Board shall issue in duplicate a certificate of approval of such proposed amendment . . . .” Nebraska Revised Statute section 70-663 sets out the procedure that must be followed. The proposed amendment must be published for three consecutive weeks in two legal newspapers of general circulation within the district. The notice must set forth in full the proposed amendment and set a date, which must be at least three weeks from the last date of publication, by which any protest, complaint or objection must be filed. Section 70-612 states “Each subdivision shall be composed of one or more voting precincts, or divided precincts, and the total population of each subdivision shall be approximately the same.” Executive Director Texel said the Legislature seemed to acknowledge the complexity of redistricting and the importance of census figures in section 70-604, where it says “[N]o district shall be required to redistrict its subdivision for purposes of equalizing population more frequently than every ten years following publication of the most recent federal decennial census . . . .”
Norris PPD’s charter divides its territory into 13 voting subdivisions. Each subdivision has one director representing that subdivision. The director that represents subdivision 6 is moving or has moved out of the district. The Petition would divide the voting population in subdivision 6 among its surrounding subdivisions and remove the current subdivision 6 from the District’s charter. This would allow the District to reduce the number of directors. Executive Director Texel told the Board that prior to submitting its Petition, Norris PPD’s legal counsel contacted him to discuss the situation. Norris PPD would try to apportion the subdivisions as equally as possible with the proposed changes, but to avoid the considerable time and expense for both the District and the county clerks the District would prefer not to perform a comprehensive redistribution of the District’s entire population right now. The most current population figures from the 2010 census would be used for the proposed changes. The numbers would most likely change considerably in the 2020 census. Thus, a comprehensive redistribution would necessarily be performed after the upcoming 2020 census figures are released. So Norris PPD would like to avoid duplicating the considerable effort and costs by distributing the population in subdivision 6 to its adjoining subdivisions, then conducting a comprehensive overhaul of its subdivisions after the 2020 census. The executive director consulted with Chairman Reida concerning the District’s proposal. Chairman Reida and the executive director told Norris PPD’s counsel they thought the plan was a reasonable approach to avoid duplicating the time and expense necessary for two comprehensive redistributions within a year or two of each other.
Norris PPD’s legal counsel, Ellen Kreifels, was present and addressed the Board. She told the Board that there were additional factors that have changed the District’s population from the most recent figures. One is that the City of Lincoln recently annexed territory from Norris PPD. The exact population figures involved in that change are not available yet. Mr. Moen asked when the district last amended its charter. In 2017, the district merged with the Seward County Public Power District. As a result, Norris PPD added two directors.
Vice Chairman Morehouse pointed out that the statute says the voting subdivisions should have population that are “approximately the same.” The numbers in Exhibit B show that from the largest to smallest subdivision there is a difference of something like 52%. That is a large variance and needs to be discussed. Mr. Hutchison asked if the population figures used were current or from the 2010 census. They were from the 2010 census. Mr. Hutchison did not feel comfortable approving an amendment that would not appear to comply with the statutory language. Vice Chairman Morehouse asked if there would be a reason not to delay the redistricting. Mr. Hutchison wondered if the district would redistrict the current subdivisions using the data that is available, perhaps it is possible that the district would not need to redistrict after the 2020 census. Ms. Kreifels stated that she has looked at the 2010 data and the population figures available, and the numbers that are currently available are similar to the 2010 data. She explained that the district’s population distribution will change drastically once the new census data and the changes that have occurred around Lincoln are taken into account. Some directors may no longer reside in their subdivision. This is one of the situations the district is trying to avoid until the next election year. The district meets the criteria for the Governor to appoint a new director if a vacancy occurs (as opposed to the District’s board of directors appointing a replacement member). Vice Chairman Morehouse stated that he did not like the idea of approving something that he does not believe conforms with the law. The last time a charter amendment was done by Norris PPD the subdivision populations were with the 10% variance plus or minus from the average. The statute requires equal representation and the Petition does not meet that. Mr. Hutchison stated that as he reads the statute it does not provide for exceptions to the variance. There have been substantial changes within the district that would justify the district going through the steps to redistrict to bring its subdivisions within the variance allowed. The statute refers to what would be population shifts, but in this situation Norris PPD also has changes due to other factors such as losing territory and customers to the Lincoln Electric System and the merger with Seward County PPD. Mr. Hutchison believed that the proposed amendment does not address the changes adequately.
Vice Chairman Morehouse wanted to discuss what exactly constitutes equal representation under Nebraska law. He said he was not sure if the 10% variance was based on a 10% difference plus or minus from the average, or is it that there can only be a total of 10% difference between the population in the subdivisions. Executive Director Texel said that the Board historically has afforded the presumption if the population is within 10% plus or minus from the ideal population number for each subdivision. Mr. Hutchison stated that he had done some research on redistricting. The Nebraska Legislature adopted a resolution for its 2010 redistricting responsibilities that established the target variance for population discrepancies, which included legislative districts and public service commission districts. For congressional districts there was a target of 0% variance from the average or ideal. For other entities, such as public service commission districts, the Legislature allowed a target of plus or minus 5% from the average, which would give a total allowed variance of 10%. So if we look at those numbers and compare them to what is being proposed, the Norris PPD numbers are substantially out of the norm from the general rule. Mr. Grennan asked if the suggestion is to have Norris PPD wait on the charter amendment and have the Governor fill the director vacancy. Then after the census figures are released the district will perform a comprehensive redistricting. Vice Chairman Morehouse felt that would be in compliance with the statute. The District would need to undertake a more comprehensive redistricting to bring the population in its subdivisions within the allowed variance. Mr. Hutchison agreed that the District needs to bring its subdivisions within the allowable variance.
Chairman Reida asked if the Board requires the District to go through and redistrict now, would some of the directors likely be disqualified from serving? Ms. Kreifels stated that if the subdivision lines were redrawn to accommodate population figures currently available then it would be highly likely that there would be directors no longer living within the subdivisions they represent, and some subdivisions could possibly have two current directors located within a newly drawn subdivision. Bruce Vitosh, general manager for Norris PPD, added that there are some population figures that are more current than the 2010 census, but not all the areas have current numbers available. Both Mr. Vitosh and Ms. Kreifels acknowledged that the population numbers in the proposed amendment are not within the normal proportional standard, but if the District were to perform a full redistricting now, the District would need to perform another comprehensive redistricting as soon as the 2020 Census data is available.
Ms. Kreifels told the Board that during the merger of Norris PPD and Seward County PPD, the Board had suggested Norris PPD consider eliminating one or more directors. The proposed amendment was Norris PPD’s attempt to comply with the Board’s request. The other option is to have the Governor appoint a new director. The District is aware this is not a perfect amendment, and Norris PPD realizes that it needs to eventually conduct a more thorough redistricting. The proposed amendment is essentially a band-aid until Norris PPD can perform a more complicated and expensive comprehensive redistricting using the most current and accurate population figures. Mr. Vitosh pointed out that removing the director now would be a cost savings to the District and its customers. Since the District cannot redistrict in 2020 because it is an election year, the appointed director would necessarily serve for a year or year before a comprehensive redistricting could be done. By removing the open director seat now, it would save the District roughly $40,000. The overall cost for one director each year is around $20,000. Chairman Reida asked if there is a time sensitivity to the Board’s decision. Ms. Kreifels replied that the District has to notify the election commissioner by January 5, 2020, of any director vacancies. Vice Chairman Morehouse stated that he would rather see a temporary appointment and wait for a comprehensive amendment in 2021 in order to conform to the statute. Mr. Grennan said he respectfully disagreed. He believed it was necessary to step back and ask what is best for the District’s customers. The Board’s purpose is ultimately to look after the best interests of the customers. The merger was a positive step and this is the natural next step in that process. There are costs associated with the number of directors on a District’s board. There are legitimate reasons to take the series of steps that Norris PPD is now asking to take. Chairman Reida asked about the public notice and opportunity to protest. Executive Director Texel confirmed that there were no protests, objections or complaints filed after the notice and opportunity to do so had been published for three consecutive weeks in two newspapers with circulation in the District’s territory. There were no inquiries about the notice at all.
Mr. Moen asked what is actually being violated if the Petition were to be approved. Ms. Kreifels stated that the question centers on the equal representation language. Executive Director Texel stated that section 70-612(1)(a) says that the total population in each subdivision shall be “approximately the same.” Mr. Hutchison added that the language in section 70-604(6) says the subdivisions “shall be of substantially equal population.” Chairman Reida asked if the Petition were to be approved, who would have standing to object? Executive Director Texel stated that it was his opinion that any customer in Norris PPD’s District would have standing, as would any creditor of the District. Vice Chairman Morehouse stated that it is unlikely that someone would appeal the approval. Executive Director Texel agreed the chances that someone would challenge the temporary redistricting would probably be remote.
There was discussion about the time frame as to when an appeal of the Board’s decision could be filed. Executive Director Texel said an appeal could be filed within 30 days after the Board’s certificate of approval is issued. Mr. Moen asked about the language “approximately”. This seems to give the Board some discretion. He was trying to determine what law says that the numbers must be within the 10% variance. Executive Director Texel stated that the 10% is not statutory, but rather is in caselaw. He explained that the Nebraska Supreme Court has acknowledged that it is difficult to divide population with mathematical certainty. The courts tend to disfavor boundaries that have to split natural geographic areas such as municipalities, or that do not follow natural features such as rivers. Such boundaries are confusing to the public and make things difficult for election officials. There was additional discussion regarding the legislative resolution used in 2010 that set a target total variance of 10% for certain political boundaries. Mr. Grennan acknowledged that the situation is not ideal. Chairman Reida stated that if the Petition were to be approved, the order would need to point out with some detail the Board’s reasoning. Ms. Kreifels said it might be helpful if the Board were to issue a ruling or resolution that outlines how the Board interprets the 10% variance guideline and how it will be applied in charter amendments. Mr. Vitosh pointed out that the District’s numbers are not as large as the statewide figures are. The political districts mentioned when discussing the Legislature’s use of the 10% guideline dealt with dividing up the entire state, not a small portion of it. The smaller numbers in Norris PPD’s district are more affected by the 10% variance than for districts dividing up the entire state’s population. In some rural areas one family moving between subdivisions of a public power district might be able to cause the population percentages to fluctuate from the ideal. Mr. Moen asked what would be the variance if the subdivisions stayed as they are and the director vacancy was filled. Ms. Kreifels gave the Board a spreadsheet that showed the current population figures for each subdivision and the figures as they would be if the Petition were approved. Chairman Reida and Mr. Moen pointed out that the numbers in the current districts had a total variance of about 39%, while the variance in the proposed district plan was just under 42%. So the variance from the current to the proposed was not a significant difference. Mr. Moen asked what is the time period involved to do a thorough redistricting if it were to be done now. Ms. Kreifels answered that the population numbers would require a lot of research to gather the necessary data, but she was not sure of the exact time period. She stated that the redistricting that will need to occur after the census will be drastic. Chairman Reida asked if redistricting were performed, what would happen if there were two directors living in a newly drawn subdivision. Mr. Vitosh stated that Norris PPD has not faced that situation before, so he was not sure what would happen. Since the District cannot redistrict in an election year, it could not be done until 2021.
Mr. Moen stated that if this was occurring closer to the 2010 census then he would look at this differently, since it is now well over the midpoint from the previous census and the District cannot redistrict next year. Given those factors, he would feel comfortable approving the proposed amendment. Ms. Kreifels stated that it is a given that the District will need to redistrict after the 2020 census. Chairman Reida again mentioned that difference in the current and proposed numbers are quite small. Mr. Moen stated that this district is obviously smaller than the entire state and the word “approximate” could allow for a larger swing than normal in a temporary situation such as this. Chairman Reida also reiterated that that the Petition is reducing the directors, which is something that the Board has been asking the districts to do for many years. The Board briefly discussed the level of detail that should be in the motion. Executive Director Texel recommended that the motion could be to approve the Petition and the details based on the discussion today could be provided in the written certificate of approval. By voting today instead of waiting for the written order allows the District to move forward with any needed notifications to the applicable election officials. Mr. Grennan moved to waive the hearing and approve Norris Public Power District’s Petition for Charter Amendment 20. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – no, Mr. Grennan – yes, Mr. Hutchison – no, and Mr. Moen – yes. The motion carried 3-2. The executive director will draft an order or certificate and circulate it to the Board members in the majority. The members can then make any edits they believe necessary. The executive director added that the members in the minority could then review the order or certificate and would be provided the opportunity to provide a dissenting opinion.
The next item on the agenda was the executive director’s report. The first item was the Southwest Power Pool (SPP) update. Mr. Grennan gave an update on what is happening at the Regional State Committee (RSC). The next RSC meeting is at the end of January. Negotiations are ongoing regarding seams issues between the Midwest Independent System Operator (MISO) and SPP. Joe Lang, Director for Energy Regulatory Affairs with the Omaha Public Power District (OPPD), stated that the seams issues between MISO and SPP are especially important to OPPD and he is glad to see that the RSC is working on addressing the issues.
Executive Director Texel told the Board that the Natural Resource Committee’s Legal Counsel, Laurie Lage, was leaving for a new position outside of State government. She has been with the committee for 11 years and with the Legislature for approximately 20 years. Her knowledge will be missed by the Board and the utilities.
At the November meeting the Board approved a motion that comments should be submitted to the Federal Energy Regulatory Commission (FERC) regarding a Notice of Proposed Rulemaking (NOPR) concerning proposed amendments to Public Utility Regulatory Policies Act (PURPA). The deadline was December 3. The PRB’s comments were filed prior to the deadline and FERC had sent an email confirmation.
Executive Director Texel gave an update on an amendment to the contract with JK Energy Consulting. Effective January 1, 2020, Mr. Grennan will be the Chair of the RSC. It is customary with the RSC that when a new chair is installed, the representative on the RSC’s Cost Allocation Working Group (CAWG) from the same state as the RSC’s new chair becomes the CAWG’s chair, also. This facilitates communication and coordination between both groups, since the CAWG representative is usually a staff member for the RSC member’s commission. That means John Krajewski of JK Energy will be taking on extra duties during the 2020 calendar year. Since these additional duties are beyond the scope of work in the current contract, it is necessary to increase Mr. Krajewski’s compensation during 2020. The Department of Administrative Services’ Material Division sent the proposed addendum to increase the compensation to JK Energy. The contract change will be in effect from January 1 to June 30, 2020. The second half of the year will be addressed in the new contract approved for the period July 1, 2020 to June 30, 2021.
The next meetings are scheduled for January 24, February 10 and March 9, 2020. The Board members decided to set their meetings on the second Monday of each month, beginning in February 2020.
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 11:10 a.m.
Timothy J. Texel
Executive Director and General Counsel