NEBRASKA POWER REVIEW BOARD
Minutes of the 832nd Meeting
July 15, 2022
The 832nd 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. Peck had informed the staff that she had a work-related commitment and was unable to attend. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on July 7, 2022. 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 watching the meeting on Webex 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. Anyone wishing to ask a question could also type the question in the “chat” function and the Board’s staff would read the question. 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 meeting notebook. The executive director announced that a copy of the Nebraska Open Meetings Act was on display on the south wall of the room, 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 June 17, 2022, public meeting. The minutes were sent electronically to the Board members. The staff did not have any recommended changes. Mr. Grennan moved to approve the draft minutes. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent.
The next agenda item was acceptance of the expense report for the month of June. In June there was $34,683.32 in personal services, $16,543.55 in operating expenses, and $617.45 in travel expenses. The total June expenses were $51,844.32. In June there were three pay periods, which accounts for the higher personal service number for June. The end of June is also the end of the State’s fiscal year. The final financial result was that the Board used 98.36% of its cash fund, not including the cash reserve. Vice Chairman Hutchison moved to accept the June expense report. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent.
The next item on the agenda was to consider PRB-3972. This is an application filed by the City of Chappell, Nebraska. The application is for authority to construct approximately 3,300 feet of 120/240 volt of distribution line in Deuel County. The application was filed on June 9, 2022. The purpose of the line is to serve a variable speed advisory sign operated by the Nebraska Department of Transportation along Interstate 80. The cost of the project will be paid by the Department of Transportation. The line would be located in the Highline Electric Association’s retail service area. Highline submitted a Consent and Waiver form consenting to the approval of the application and waiving the need for a hearing. The Board consulted with the Nebraska Game and Parks Commission as required by Neb. Rev. Stat. section 37-807(3). In a letter dated June 10, 2022, the Commission determined the project is in the range of the endangered Swift Fox. However, the project site does not appear to have suitable habitat for the foxes. The Commission determined the project is not anticipated to have any negative impact on any threatened or endangered species and the Commission does not object to the Board’s approval of the application. Mr. Grennan moved to approve PRB-3972. Mr. Moen seconded the Motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent.
The next item on the agenda was SAA 390-22-A. This is a joint application to amend retail service area agreements 390 filed by the Nebraska Public Power District (NPPD), the Elkhorn Rural Public Power District (Elkhorn RPPD), and the City of Norfolk. The application was filed on June 29, 2022. SAA 390 is the retail service area agreement between NPPD and Elkhorn RPPD. NPPD serves Norfolk at retail and holds the service area rights to the City. NPPD therefore operates as the municipal electric provider in Norfolk for purposes of service area transfers based on annexations. The executive director explained to the Board that technically the City of Norfolk would not be a party to a service area agreement without filing an intervention, but it is the PRB’s longstanding practice to allow a city in these circumstances to participate as a joint applicant to amend a service area that affects that city without actually filing an intervention, so long as the transfer is uncontested. In 2021 Norfolk annexed territory on the west and southwest edge of the service area surrounding the City. NPPD and Norfolk would like to incorporate that territory into NPPD’s service area. There are three separate parcels of land that comprise the service area that would be transferred. Exhibit A is a map that shows the location of the annexed territory that lies outside the current service area boundary. Exhibit B is a metes and bounds description of the total annexed territory. Exhibit C is a copy of the City’s Resolution No. 5743, accomplishing the annexation. Exhibit D is a copy of the City’s resolution No. 2021-52 authorizing the City to join NPPD as a co-applicant on the PRB application to acquire the service area rights. Exhibit E is a Consent and Waiver form signed by NPPD allowing Elkhorn RPPD to continue to serve a City welcome sign located in the area that would become NPPD’s service area. The annexation occurred on October 4, 2021, so the application was filed prior to the one-year deadline. The Board’s staff had asked NPPD to provide the Board with additional details concerning the facilities, customers and compensation involved in the transfer. Elkhorn RPPD will receive $217,438 for the customers, $114,514 for its infrastructure, and $99,920 for lost customer revenue. Chairman Reida asked if the utilities participated in joint planning before or during the annexation. Pat Hanrahan, NPPD General Manager for Retail, confirmed that the City and utilities had participated in joint planning. Mr. Grennan commented that this application was a large amount of paperwork for the annexation, which appears to be more complex than usual, and thanked the parties for the work and joint planning. Mr. Grennan moved to approve SAA 390-22-A as described in the application. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck –absent. The motion carried 4 – 0 with one absent.
The next item on the agenda was PRB-3970-M. This is an application filed by the Nebraska Public Power District requesting authority to construct or install a microwave communications facility. The proposed facility would span 16.9 miles in southeast Holt County. The application was filed on May 12, 2022. A Notice of Filing was sent to regulated telecommunications carriers operating in the project area, as is required by Neb. Rev. Stat. section 70-1021, on May 16, 2022. The Northeast Nebraska Telephone Company (NNTC) submitted a written Protest on May 27. On June 17 the Board held a hearing to address the jurisdictional issue of whether NNTC’s Protest was timely filed. The Board determined the Protest was timely filed. On July 11, Thunderhead Wind Energy LLC filed a Petition for Intervention, which was granted by the hearing officer. A hearing on the merits had been scheduled for July 15, 2022. On July 14 the parties came to an agreement and NNTC filed a Motion to Withdraw its Protest. The Motion stated that NPPD met the requirements set out in Neb. Rev. Stat. section 70-1021. The PRB’s Rules of Practice and Procedure, in Chapter 3, section 014, require the Board to approve the withdrawal of any pleading or application once it is filed with the Board. Executive Director Texel said due to this requirement, the Board would first need to vote on approval of NNTC’s Motion to Withdraw its Protest. Vice Chairman Hutchison moved to accept the Northeast Nebraska Telephone Company’s Motion to Withdraw its Protest. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck –absent. The motion carried 4 – 0 with one absent.
With the withdrawal of the Protest, Executive Director Texel explained that the process is now removed from the Board’s quasi-judicial capacity, and reverts back to the open meeting process. The statute allows the Board to waive the hearing. Executive Director Texel outlined the findings required for a microwave application that are set out in Neb. Rev. Stat. section 70-1021. To approve an application for microwave communications facilities, the Board must find (1) that in the judgment of the Board the district is not receiving the required quality of service and will not within a reasonable time receive the required quality of service from the regulated carrier or carriers involved, or (2) that the regulated carriers would not provide the required quality of service by the same or alternate methods, at the same or lower costs to the district, and (3) that such construction would be in the public interest. The Board consulted with the Game and Parks Commission as required by section 37-807(3). In a letter dated May 18, 2022 the Commission determined the project is in the range of the endangered Whooping Crane and the threatened Northern Long-Eared Bat, Western Prairie Fringed Orchid, American Burying Beetle and Small White Lady’s Slipper. The project site is previously disturbed and is unlikely to contain any suitable habitat for any of the stated species. The Commission determined the project is not anticipated to have any negative impact on any threatened or endangered species and the Commission did not object to the PRB’s approval of PRB-3970-M.
John McClure, general counsel for NPPD, addressed the Board concerning the microwave application. Also available to answer the Board’s questions was Art Weise, Vice President of Energy Delivery, and Matt Holthe, Telecommunications Manager, During the discussion Mr. Grennan asked about the construction. It was noted that some construction had already started prior to the application. Mr. Weise acknowledged that there was a need to have a better understanding of NPPD’s internal procedures to ensure this does not happen again. Mr. Grennan stated that if a regulated carrier was able to step up and do the service and the Board were to deny the application, there would be stranded assets and customer dollars would be lost. Mr. Weise said that NNTC would be added to an NPPD notification list for all applicable projects, along with any other carrier who wanted notifications for future projects. This is one procedure that will be implemented to ensure better communications. Mr. Holthe explained the construction of the project that was being used. He talked about the need for a secondary line of communication and how the two towers will work. He provided some scenarios showing how the lines of communication must stay active and if there was a failure of one system what would occur. This planning is required in order for the Western Area Power Administration (WAPA) to interconnect NPPD’s transmission lines to WAPA’s facilities, which is necessary to interconnect the Thunderhead wind facility. Michael Degan, legal counsel for Thunderhead Wind Energy provided the Board with a document that listed landowners who had an interest in the Thunderhead wind facility and urged the approval of NPPD’s application. Vice Chairman Hutchison moved to waive the hearing and approve PRB-3970-M. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck –absent. The motion carried 4 – 0 with one absent.
The Board then discussed its draft of comments in response to the Federal Energy Regulatory Commission’s (FERC) Notice of Proposed Rulemaking (NOPR) in FERC docket RM21-17-000. At the Board’s May meeting the Board had discussed preparing draft comments to submit to FERC. The deadline for comments is August 17, 2022. Unfortunately, the Board’s August meeting falls two days after the deadline. Vice Chairman Hutchison stated that the Southwest Power Pool’s Regional State Committee, which had submitted comments on the Advance Notice of Proposed Rulemaking (ANOPR) would not be filing comments on the NOPR, so it is up to the individual state commissions to file comments. The Board created a committee of Vice Chairman Hutchison and Mr. Grennan to review the draft and give final approval prior to August 17. There was discussion on the NOPR provisions and the draft PRB comments. Vice Chairman Hutchison would like to make some comments to the PRB’s draft prepared by the Board staff. The draft comments were also provided to John Krajewski, the Board’s SPP consultant, and he had provided some additional comments. Chairman Reida asked if it would be possible to reach out to the larger Nebraska utilities for comments on the PRB’s draft. Executive Director Texel stated that once the final draft is prepared he will share it with the SPP member utilities to see if they would like to make any comments. Chairman Hutchison moved that the Board will submit comments to FERC in the NOPR on RM21-17-000. The draft will be subject to amendment and final approval by the Board’s committee, following the Board’s guidelines provided at the May, June and July PRB meetings. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck –absent. The motion carried 4 – 0 with one absent.
The first item on the executive director’s report was an update on Southwest Power Pool activities. The Board had a copy of JK Energy’s update in its notebook, and had received the update electronically prior to the meeting. Vice Chairman Hutchison gave an update of what was coming up at the July RSC meeting. He spoke about the DC ties issue. There is a proposal for the methodology from the Cost Allocation Working Group to be voted on at the RSC meeting. He stated that there would be additional information on the RSC website prior to the meeting. There are currently two proposals. One is for performance-based accreditation and the other is to raise the generation planning reserve margin from 12% to 15%. The implementation of this requirement is being reviewed regarding how to implement the increase. Some would like a two-year implementation period, while others would like to see the 15% be required right away. Some members are trying to review how the member utilities will meet the 15% requirement. There is a penalty for those who do not meet this requirement. That is why it is taking time to review what the outcome would mean for the SPP members. The Board members then talked about resource adequacy. Mr. Grennan talked about the need for performance-based accreditation and how this is important to help prevent situations such as Winter Storm Uri.
The Board then discussed the need to update the Board’s rules and regulations. The Board has the oldest set of rules in the State. Over the year numerous attorneys commented that the Board’s rules are outdated and should be rewritten. The executive director said they are correct, but it is a major undertaking to rewrite an entire set of rules of practice and procedure. The Board discussed having an outside person or entity draft the new rules. The Board asked the staff to research the issue of how much time might be involved to draft and approve a new set of rules, and how much cost might be involved to hire an outside entity to help draft the rules.
Executive Director Texel reminded the Board that the next meetings are August 19, September 16, and October 21, 2022.
Mr. Grennan moved to adjourn the meeting. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison –yes, Mr. Grennan – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent. The meeting was adjourned at 12:08 p.m.
Timothy J. Texel
Executive Director and General Counsel