NEBRASKA POWER REVIEW BOARD
Minutes of the 825th Meeting
December 13, 2021
The 825th 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 Hutchison, Mr. Grennan, and Mr. Moen. Ms. Loutzenhiser had informed the Board that due to her work schedule she would not be able to participate in the meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on December 3, 2021. The Board also made the meeting available to the public through Webex. The Webex log-in information was available on the Board’s website and was published in the Lincoln Journal Star notice. The agenda on the Board’s website also includes links to the agenda items with associated documents the Board will consider, as well as a link to the Nebraska Open Meetings Act. Executive Director Texel explained that if any member of the public wanted to speak, they could click on the “raise your hand” icon. At that time, they would be unmuted, they could announce who is speaking, provide an address, and disclose if they represent an organization. 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 black 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 October 15, 2021, public meeting. The minutes were sent electronically to the Board members. There were changes needed on two pages of the draft minutes. The first correction is on page 4. The dollar amount referenced in the discussion of the Southwest Power Pool (SPP) Regional State Committee (RSC) member’s per diem is supposed to say $25,000, but is missing the last zero. The other change is in the second paragraph on page 8. In the first instance his name appears on that page it is correct, but the next four times it is misspelled with an “e” at the end of his last name. David Reid with Bluestem Energy brought these corrections to the staff’s attention. Those are the only corrections. Executive Director Texel thanked Mr. Reid for bringing the corrections to the Board’s attention. Mr. Grennan moved to approve the draft minutes with the noted corrections. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next agenda item was acceptance of the expense report for the months of October and November. The November meeting was canceled. In October there was $25,964.58 in personal services, $16,790.76 in operating expenses, and $492.56 in travel expenses. The total October expenses was $43,247.85. In November there was $24,608.15 in personal services, $15,741.58 in operating expenses, and $2,438.90 in travel expenses. The total November expenses was $42,788.63. The month of November included travel expenses for Chairman Reida to attend the American Public Power Association’s legal and regulatory conference. The Board discussed the per diem limitation for the Board’s SPP RSC representative. Mr. Grennan is currently the RSC representative. With today’s meeting, he is at the maximum allowed per diems for the year. The statute allows for a maximum of $20,000 in per diems, which equates to 80 days in which he engages in business on behalf of the State or the PRB. The Board discussed its special meeting to address conditional approvals of public power district charter amendments on December 27. If the Board would want to hold the meeting by video conference, at least one member would need to be present in the State Office Building hearing room. All others could attend by Webex or conference call. Chairman Reida asked about a scenario where Mr. Grennan would resign as the RSC representative prior to December 27. Would he revert back to the $60 per diem level and be able to attend the December 27 meeting? Executive Director Texel said the amount paid to the RSC member does not count toward the $6,000 per diem limit if the RSC member becomes a regular Board member again, but he was not sure exactly how that would work. He will need to review the statutory language to see if Mr. Grennan would be eligible to receive $60 per diem payments if he already reached his RSC maximum per diems. The Board also noted that Ms. Loutzenhiser had submitted a letter of resignation, but it was effective as of December 31, 2021. That means she would be eligible to participate in the December 27 meeting. Vice Chairman Hutchison expressed concern that the Board needs to make certain a quorum could be reached on December 27. If Mr. Grennan cannot participate due to per diem limits, and Ms. Loutzenhiser is unavailable due to work requirements, in the unlikely event something would happen to one of the remaining three members that would mean the Board would be unable to approve the charter amendments. Since the agenda items on December 27 deal with elections, the Board must make certain it can make a quorum. The Board asked the executive director to see if Ms. Loutzenhiser could be available on an emergency basis, and to check for sure if Mr. Grennan could participate if he resigns from the RSC. Vice Chairman Hutchison moved to accept the October and November 2021 expense reports. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next agenda item was to consider SAA 51-21-A. This is an amendment submitted jointly by the City of Grand Island and Southern Public Power District. The amendment was filed on October 22, 2021. The amendment would transfer two small tracts of territory annexed by the City of Grand Island to Southern PPD. Exhibit A was a map of the City’s entire service area boundary that shows the two tracts on the southwest edge of Grand Island’s service area. Exhibit A-1 shows the details of the eastern tract and Exhibit A-2 shows the details of the western tract. There was also a metes and bounds description of the tracts in the text of the application. There are three customers in the annexed area. Grand Island will pay Southern PPD $8,857.81 for the customers and infrastructure in the annexed areas. Chairman Reida asked about how the utilities came up with the dollar amount. Executive Director Texel said since the application was jointly submitted and the amount was agreed upon by the parties, he did not inquire about the details of the compensation. Dave Jarecke, legal representative for Southern PPD, stated that there are minimal facilities in the area involved. The amount was determined using the statutory calculation for the loss of revenue, along with the depreciated value of a pole and transformer that crosses into the annexed territory. Executive Director Texel recommended approval. Mr. Grennan moved to approve SAA 51-21-A. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen –yes. The motion carried 4– 0 with one absent.
The next item on the agenda was to consider Perennial Public Power District's Petition for Charter Amendment 6. The petition was filed on October 28, 2021. The purpose of the amendment is to amend section VI of the District’s charter to make two directors elected “at-large” and to update the dates for director terms to ensure that they are staggered. Currently the District has two subdivisions, with four directors elected from one subdivision and two from the other. The amendment would make two directors elected from each subdivision, and two directors would be elected “at-large” from the entire district. The petition was submitted pursuant to Neb. Rev. Stat. § 70-612(1)(b). This statute allows a public power district to form its subdivision following precinct or county boundary lines without regard to population. To approve the petition, the Board would need to find that the district includes all or part of two or more counties, the district engages in furnishing electric light and power, more than 50% of the district’s customers are rural, and the interests of rural customer will not be prejudiced by using this election method. Perennial PPD’s operates primarily in York and Fillmore counties, but also serves small areas in Seward, Hamilton and Clay counties. The District’s Petition confirms that more than 50% of the District’s customers are rural. In its resolution, the District’s Board of Directors made a finding that the rural customers would not be prejudiced by the proposed amendment. The PRB is required to publish notice of a proposed charter amendment in at least two newspapers with general circulation in the District’s operating area. The notice for Perennial’s charter amendment 6 was published in the Nebraska Signal (published in Fillmore County) and the York News-Times on November 3, 10, and 17. After publication of notice the PRB must wait at least three weeks to give interested parties an opportunity to file an objection or protest opposing approval of the charter amendment before acting on the Petition. The notice stated any interested party could file a protest or objection by close of business on December 9, 2021. The Board did not receive any protests or objections. Since no protests or objections were filed, state law allows the hearing to be waived. Dave Jarecke and Ellen Kreifels, Perennial PPD’s legal counsel, were available for questions. The general manager was also available for questions on Webex. Vice Chairman Hutchison pointed out that the population in Subdivision 1 has a population almost twice that of the population of Subdivision 2. He asked if that would prejudice the rural voters in subdivision 1 because their votes were more diluted than in subdivision 2. He asked if most of the District’s customers are rural. Mr. Jarecke and Ms. Kreifels confirmed that the population of the entire district is mostly rural. The two at-large directors will give the opportunity for a director to be elected in the less populous subdivision, and ensures that all customers will have four directors that represent them. Mr. Grennan commented that he thought having the two at-large directors was a good idea. The two at-large directors represent the entire district and not just the county in which they live. Executive Director Texel also added that to approve the petition the Board would need to find that the charter amendment will not be contrary to the best interests of the District, and that it will not jeopardize or impair the rights of the creditors of the District or of any other persons. Mr. Moen moved to waive the hearing and approve the petition for Perennial Public Power District’s charter amendment 6. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next item on the agenda was to consider Elkhorn Rural Public Power District’s Petition for Charter Amendment 7. The application was filed on October 22, 2021. The purpose of the amendment is to better align the chartered territory with the District’s retail service area, redraw voting subdivision boundaries based on the 2020 Census, and update the names and terms of the directors listed in the charter. The petition is submitted pursuant to Neb. Rev. Stat. § 70-604(6). This is the standard that requires a district’s voting subdivisions to be substantially equal in population. Executive Director Texel reminded the Board that in his legal opinion written in March 2020, his research indicated that the courts generally give deference to a total population variance of 10% from the smallest to largest districts or subdivisions of a special purpose district. Such a variance is generally given a presumption that the special purpose district made a good faith effort to create voting subdivisions of substantially equal population. Exhibit C-1 shows the District’s proposed subdivisions and how they are being changed. Exhibit D shows the population figures. The total variation from the largest to smallest subdivisions is 7.6%. The variance from the largest to smallest was +3.9 and -3.7. Chairman Reida asked that the record show that the variance was less than 10% total, and less than 5% either higher or lower than the ideal number. He would like to see the same information for each district, and would like the numbers shown in the minutes of the meeting where the charter amendment is voted on. The notice for Elkhorn RPPD’s charter amendment was published in the Norfolk Daily News and the Neligh News & Leader newspapers on November 3, 10 and 17. The notice stated that any protests or objection must be filed by December 9, 2021. The Board did not receive any protests or objections. Since no protests or objections were filed, state law allows the Board to waive a hearing. The Board needs to find that the charter amendment will not be contrary to the best interests of the District, will not jeopardize or impair the rights of the creditors of the District or of other persons, and that the amendment provides for substantially equal population in the District’s voting subdivisions. Vice Chairman Hutchison moved to waive a hearing and approve Elkhorn Rural Public Power District’s Petition for Charter Amendment 7. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next item on the agenda was to consider North Central Public Power District’s Petition for Charter Amendment 9. The application was filed on October 25, 2021. The purpose of the amendment is to align the chartered territory with the District’s retail service area, redraw the voting subdivision boundaries based on the 2020 Census, and update the names and terms of the director listed in the charter. The petition is submitted pursuant to § 70-604(6). This is the substantially equal population standard. North Central PPD has 7 voting subdivisions. Exhibit C shows the subdivisions and Exhibit D shows the population figures. North Central PPD currently has five subdivisions with one director each, and two at-large directors elected from the entire District. The proposed amendment therefore has six subdivisions. The total variation from the largest to smallest subdivision is 4.7%, which is obviously below the 10% standard needed for a presumption of validity. The notice was published in the Plainview News newspaper on November 3, 10 and 17. It was also published in the Verdigre Eagle newspaper on November 4, 11 and 18. The notice stated that any protests or objection must be filed December 9, 2021. The Board did not receive any protests or objections. As previously stated, since no protests or objections were filed state law allows the Board to waive the hearing. North Central PPD currently has five subdivisions with one director each, and two at-large subdivisions elected from the entire District. The new configuration will be six subdivisions with one director each, and one at-large director. Executive Director Texel told the Board that the population variance is +2.9% and -1.8% from the ideal number. As with the previous charter amendment, the Board needs to find that the amendment will not be contrary to the best interests of the District, will not jeopardize or impair the rights of the creditors or of other persons, and the amendment provides for substantially equal population in the District’s voting subdivisions. Vice Chairman Hutchison asked why the District is going from two to one at-large directors. Mr. Jarecke stated that the District recently added the City of Plainview to its chartered territory. The District determined the best solution would be to utilize one of the at-large directors and allocate that director position to Plainview. By providing Plainview with one director it does not substantially disrupt the other subdivisions. Mr. Moen moved to waive a hearing and approve North Central Public Power District’s Petition for Charter Amendment 9. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next item on the agenda was to consider Cedar-Knox Public Power District’s Petition for Charter Amendment 7. The application was filed on October 28, 2021. The purpose of the amendment is to align the District’s chartered territory with it retail service area, redraw voting subdivision boundaries based on the 2020 Census, and update the names and terms of the director listed in the charter. The petition is submitted pursuant to section 70-604(6). This is the substantially equal population standard. Exhibit C shows the current and proposed subdivisions and Exhibit D shows the population figures. Cedar-Knox PPD currently has three subdivision with three directors in each subdivision. The current total variance in population is 14%. In the proposed reconfiguration, the total variance would be 9.1%. The population in the subdivisions vary from +5.1% to -4% from the ideal number. Chairman Reida stated he believes the 5.1% is a de minimus difference from the ideal number that is no more than 5% either larger or smaller than the ideal. The executive director reminded the Board the total variance is still less than 10%. The Board discussed how in a rural district one or two families can change the population percentage by a percent or two. The notice was published in the Wausa Gazette and the Cedar County News newspapers on November 3, 10 and 17. The notice stated that any protests or objection must be filed by December 9, 2021. The Board did not receive any protests or objections. As previously stated, the Board needs to find that the charter amendment will not be contrary to the best interests of the District, will not jeopardize or impair the rights of the creditors of the District or of other persons, and the amendment provides for substantially equal population in the District’s voting subdivisions. Mr. Grennan moved to waive a hearing and approve Cedar-Knox Public Power District’s Petition for Charter Amendment 9. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next item on the agenda was the director’s report. Executive Director Texel first stated that Ms. Loutzenhiser had submitted a letter of resignation. The letter was addressed to Chairman Reida and a copy has already been provided to the Governor’s office. Ms. Loutzenhiser will serve until the end of her term, so the effective date of her resignation is December 31, 2021. The significance of the resignation is that she will not continue to serve until her replacement is confirmed by the Legislature. The executive director told the Board that an accountant from Scottsbluff that has submitted her application to the Governor’s office for appointment to the PRB. The accountant is a registered Republican. Since state law only allows three PRB members to be a member of the Governor’s political party, assuming the accountant is appointed any other applicant will cannot be a registered Republican.
At the October PRB meeting the Board had authorized the executive director to take actions necessary to find a state senator that would introduce a bill in the upcoming legislative session to increase the statutory limit on the SPP RSC member’s per diems. The current per diem limits the RSC member to 80 days of per diems. The executive director was pleased to be able to say that Senator Hughes has agreed to introduce the bill. The Natural Resources Committee chair and vice chair were asked prior to Senator Hughes. Chairman Bostelman said he was not opposed to the bill, but he had too many other bills he was going to introduce, and he could not take on more. The Vice Chair was not opposed to the bill, either, also but he also declined to introduce it. Executive Director Texel said he already sent a copy of the bill with an explanation why it is needed to the advisor in Policy Research Office that is assigned to the PRB. He asked if they could let the Board know if the Governor would support the bill, or at least not oppose it. We have not heard a response from the Governor’s office yet. Chairman Reida wondered if Mr. Grennan would submit his resignation as the RSC member effective December 26, could he receive a regular per diem of $60 and participate in the PRB’s December 27 meeting? Executive Director Texel said that might be possible. He would need to review the statute. Chairman Reida asked him to check on that possibility.
The next discussion was an update from Mr. Grennan concerning SPP activities. Mr. Grennan talked about a recent meeting that was held with natural gas suppliers concerning the resource adequacy issue. He said one significant issue during the February cold weather event was the water at the wellheads. When natural gas is extracted there is a considerable amount of water as well as natural gas. Disposal of the water is as much of an issue as having the well heads winterized. When the two are separated, the water has to be taken away. Mr. Grennan then said that natural gas is sold by contract, which is a different dynamic than electricity. He discussed how natural gas is delivered to its customers. The storage of natural gas at a site is too costly, at least when compared to how rarely the storage would be used. Not only is storage expensive, but it requires extra personnel and equipment to provide security and additional monitoring equipment. Mr. Krajewski, the Board’s contractor that serves as Nebraska’s staff member on the RSC’s Cost Allocation Working Group (CAWG), spoke about the differences between the natural gas suppliers and the electric suppliers. Customers expect their lights to remain on. Gas supplies are contractual in nature and if you do not have a contract for service there will be no gas available. Mr. Grennan pointed out that although the gas industry prioritizes natural gas supplies to residential customers for heating needs, if the electric generation facility does not have enough gas the blower on those customers’ furnaces will not be operating. Mr. Grennan also talked about an update on the RCAR3 evaluation that is coming up.
Next the Board was introduced to Mr. Krajewski’s new employee, Gene Mauk, who will assist him representing the Board on the CAWG and other SPP committees and working groups, and serving as advisor to the Board’s RSC member. Mr. Mauk gave the Board his background regarding his education and employment. He lives in Indiana. His most recent employment was at MISO, where he was the regional director for external affairs. Mr. Krajewski is excited to have Mr. Mauk as his new employee. He will replace Bill Leung, who wants to retire completely and thus not work part-time. Mr. Krajewski stated that Mr. Mauk will be a part-time employee of JK Energy. Mr. Leung had other outside assignments. Mr. Mauk will have no outside assignments. That should help prevent any potential conflicts of interest.
There was discussion about SPP’s Emergency Communications plan. The plan is to bring the Nebraska Emergency Management Agency (NEMA) into the loop, since they have infrastructure and procedures already in place to deal with emergency events and notification of other State officials, including the Governor. NEMA is going to sign up for applicable SPP listservs, just like the PRB does. SPP created a couple new listservs for notifications of events that may effect the grid. NEMA only wants to monitor the high level or serious SPP events. It is anticipated that it will be very rare for NEMA’s involvement to be necessary. Executive Director Texel said he and Mr. Grennan met with the Nebraska Department of Environment and Energy (NDEE) and NEMA officials that are working on this issue. It was decided that the NDEE and NEMA personnel would try to draft a communications plan to share with SPP. There will be a follow-up meeting on December 21 to review the draft plan.
The Board talked briefly about the situation that occurred in February and how ERCOT (the regional transmission organization that controls the grid in Texas) was very close to having a total blackout if they did not shed significant amounts of load. Executive Director Texel relayed that according to the information provided at the briefings he has watched, at one point the Texas grid was within two minutes of total collapse. SPP has prepared a Power Point showing information about its emergency communications, including and explanation of the different levels. The Power Point has a lot of good information and was provided to NDEE and NEMA.
The Board then discussed the issue of how utilities might provide information on their plans to decommission generation facilities to the PRB prior to public release of that information. Chairman Reida talked about possibly having a memorandum of understanding that could lay out how and when the information would be provided, and what steps the PRB would take to safeguard it. The information could be submitted as confidential and would not be a public record because it is proprietary commercial information that provides a benefit to the utility’s competitors. That would mean the information is not considered a public record. Executive Director Texel acknowledged that some utilities have expressed concern that outside entities could submit a public records request to the Board to acquire the information. The Board would not disclose it and could notify the utility involved so it could take action to protect its information. He pointed out that the public power districts and municipalities were political subdivisions of the State, and therefore were under the same public records laws as the PRB. If there is a concern the Attorney General’s office might order the PRB to release the records, the PRB could request an Attorney General’s opinion asking if the decommissioning information would be considered exempt from the public records law. Chairman Reida thought that the utilities could notify the PRB at the same time SPP would be notified. Mr. Grennan said he thought the utilities notify SPP about one year in advance of a public announcement regarding decommissioning a facility. He agreed the PRB should be given decommissioning information at the same time the SPP receives it. The Board wanted the executive director to check with Shelley Sahling about the status of the forums in February and March that Chairman Reida and Vice Chairman Hutchison had discussed with her regarding a review of Nebraska’s regulatory environment for the electric industry.
Mr. Grennan left the meeting at 11:54 a.m. so he could attend an RSC conference call.
Vice Chairman Hutchison spoke about NARUC (National Association of Regulatory Utility Commissioners). NARUC has a committee to discuss and review recent events related to the winter storm in February. He pointed out that Nebraska does not have anyone providing input on this committee.
Executive Director Texel reminded the Board that the next meetings are December 27, 2021, January 21, 2022 and February 18, 2022. December 27 will be a special meeting to address all the charter amendments submitted as a result of the 2020 census. Two will be final approvals, but the majority will be conditional approvals as allowed by the new provisions in section 70-663 the Legislature had created in the last session to deal with the late release of the 2020 Census figures. Then we will need to give final approval of the charter amendments at the January 21 meeting.
Chairman Reida moved to adjourn the meeting. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison –yes, Mr. Grennan – yes, Ms. Loutzenhiser – absent, and Mr. Moen – yes. The motion carried 4-0 with one absent. The meeting was adjourned at 12:10 p.m.
Timothy J. Texel
Executive Director and General Counsel