NEBRASKA POWER REVIEW BOARD
Minutes of the 840th Meeting
April 21, 2023
The 840th meeting of the Nebraska Power Review Board (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, Ms. Gottschalk, and Mr. Moen. Ms. Peck notified the executive director that she had experienced a medical issue that would not allow her to attend the meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on April 11, 2023. 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 provided 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 comment on an item or ask a question could also type the comment or 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 file cabinet along the south wall near the back of the room, as well as extra copies of the agenda.
The Board first considered the draft minutes from its March 17, 2023, public meeting. The minutes had been sent electronically to the Board members. The staff did not have any recommended changes, and no one had contacted them with any requested changes. Vice Chairman Hutchison moved to approve the draft minutes. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – 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 March. In March there was $26,137.83 in personal services, $23,618.34 in operating expenses, and $1,633.41 in travel expenses. The total March expenses were $51,389.58. Seventy-five percent of the fiscal year has gone by, and the PRB has used 71.21% of its cash fund. Vice Chairman Hutchison moved to accept the March expense report. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – 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 the Municipal Energy Agency of Nebraska’s (MEAN) Petition for Charter Amendment 39. This amendment would remove the City of Neligh, Nebraska as a voting member of MEAN and update the list of directors. Executive Director Texel explained that statute section 18-2433 sets out the approval criteria. The statute states that the Board must find that the statements in the petition are true and conform to the public convenience and welfare, and that the plants, systems and works, the operation of the same, the exercise of powers, and the assumption of duties and responsibilities of, or on the part of, such agency, do not nullify, conflict with, or materially affect those of any other district or a corporation organized under the provisions of chapter 70, article 6 or 8, or the Electric Cooperative Corporation Act, or those of any part of such district or corporation. MEAN supplied a certified copy of its Board’s resolution voting to approve the removal of Neligh as a member. Public notice was published in the Antelope County News of Neligh, Nebraska on March 29, and statewide notice in Nebraska was published in the Omaha World Herald on March 29. Written Notice was sent to the Nebraska Public Power District, the Western Area Power Association (WAPA) and Tri-State Generation and Transmission Association, Inc. Written Notice was also sent to the mayor of Neligh, Nebraska. Michelle Lepin, legal counsel for MEAN, spoke on behalf of MEAN and told the Board that Neligh is one of the communities that was reviewing its options regarding being a part of MEAN. Neligh researched its options and chose to take a different avenue for its generation options. Vice Chairman Hutchison asked what would be available those looking for other options. Ms. Lepin stated that Neligh was one of those entities that was hit hard by the financial effects of Winter Storm Uri. She understood that Neligh had gone through a request for proposals (RFP) process and chose to go with Tenasco. Executive Director Texel stated that because there were no protests or objections to the petition, the Board can choose to have a hearing or to waive the hearing. He recommended the Board waive a hearing, since no party had objected to approval or requested a hearing. Mr. Moen moved to waive the hearing and approve MEAN’s Petition for Charter Amendment 39. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – 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 application SAA 316-23-A. This is a joint application filed by the Nebraska Public Power District (NPPD) and the Burt County Public Power District (Burt Co. PPD) to amend the retail service area agreement between the two utilities. The application was filed on April 6, 2023. NPPD currently holds the retail service area rights to the City of Scribner (Scribner) and some area in its immediate vicinity. NPPD has officially agreed to transfer its service area rights in and around Scribner to Scribner. NPPD’s service area in an around Scribner is located between the service areas of Burt Co. PPD and Cuming County Public Power District (Cuming Co. PPD). Essentially, the service area around Scribner straddles what would otherwise be the boundary between Burt Co. PPD and Cuming Co. PPD. The fact that Scribner’s boundary adjoins both Burt Co. PPD and Cuming Co. PPD explains the reason for multiple agenda items needed to address this topic. After the multiple agenda items are addressed, Scribner will officially hold the retail service rights to the City and its immediate area, and have a service area agreement with both of its new adjoining power suppliers. To accomplish this will require the creation of two new service area agreements between the newly adjoining power suppliers. Jon Dockhorn, general manager for Burt Co. PPD, addressed the Board and stated that the amendment and the following creation of retail service area agreements will acknowledge what has in fact been occurring for a while, namely that Scribner has been operating as its own retail power supplier. All the utilities involved are in support of Scribner establishing its own service area. Chairman Reida asked if there were any financial or other considerations involved in this transfer. Chris Elliott, general counsel for NPPD, addressed the Board via Webex and stated that sometime in the 1970’s Scribner acquired its facilities from NPPD, and then around the late 1990’s NPPD transferred operation of the service area. NPPD had a retail power contract with Scribner, but that ended in about 2021. Evidently the parties overlooked transferring the legal rights to the service area. Vice Chairman Hutchison asked if the Board could include the next two items in the same motion since they are related to the issue of this item. It was Executive Director Texel’s opinion that it would be preferable to address each issue separately. Vice Chairman Hutchison moved to approve SAA 316-23-A. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – 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 creation of SAA 420. This is a joint application submitted by Scribner and Burt Co. PPD. The application was received on April 6, 2023. The application would create a retail service area agreement recognizing the new boundary between Scribner and Burt Co. PPD. The application included a map signed by both utilities that was marked as Exhibit A, and a metes and bounds description of the service area around Scribner marked as Exhibit B. Vice Chairman Hutchison moved to approve the creation of retail service area agreement 420. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – 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 creation of SAA 421. This is a joint application submitted by Scribner and Cuming Co. PPD. The application was received on April 6, 2023. The application would create a retail service area agreement recognizing the new boundary between Scribner and Cuming Co. PPD. The application included a map signed by both utilities marked as Exhibit A, and a metes and bounds description of the service area around Scribner marked as Exhibit B. Vice Chairman Hutchison moved to approve the creation of retail service area agreement 421. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent.
The next item was to consider application PRB-3995. This is an application submitted by Highline Electric Association for authority to construct .75 mile of 277/480 volt distribution line in Perkins County. The application was received on April 18, 2023. The line is for a new irrigation well pump located in the northeast quarter of section 2, Township 9 North, Range 41 West. The service is located in the Midwest Electric Cooperative Corporations’ service area. Midwest ECC submitted a signed Consent and Waiver form consenting to approval of the application and waiving a hearing. The application was submitted on this Tuesday of this week, which is the reason for the amended agenda. Normally any item received less than one week prior to the Board meeting goes on the next months’ agenda. In this case, the situation would have delayed construction until the Board’s May 19 meeting. Executive Director Texel did not want to make the farmer wait to have service to his or her pump installed, so he amended the agenda and placed the item on the agenda. The Board’s staff sent the application to the Nebraska Game and Parks Commission as required by Neb. Rev. Stat. section 37-807(3). The Commission expedited the review and provided a letter stating that the project would have “no effect” on any state-listed threatened or endangered species. Executive Director Texel expressed his appreciation for the Commission’s quick turn-around in reviewing the application and providing a response. Vice Chairman Hutchison moved to approve PRB-3995. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4-0 with one absent.
The next item on the agenda was to confirm payment of the expenses for Ms. Gottschalk to travel to Tri-State Generation and Transmission Association’s annual meeting on April 4-5, 2023. Every year Tri-State G & T sends the PRB an invitation to its annual meeting in Westminster, Colorado. The executive director explained that he has never attended and did not believe a Board member had attended in his time with the agency. Ms. Gottschalk indicated that she would like to attend. Unfortunately, the timing of the invitation and event did not allow for it to be placed on the PRB’s March 17 meeting agenda. Pursuant to section IV.A. of Board Policy 6, when time does not allow action at a regularly scheduled Board meeting for travel out of State that would involve an overnight stay, the Board chair is authorized to approve the travel expenses. Chairman Reida was contacted and authorized payment of Ms. Gottschalk’s travel expenses to attend Tri-State’s annual meeting. Although the Board Policy allows for authorization for the travel, the executive director believed it would be best if the full Board would confirm the Chairman’s action. Specifically, the executive director thought it might be helpful when dealing with the State Auditor’s Office. Ms. Gottschalk spoke briefly about the meeting. She stated that there was a presentation on how Tri-State was going to move toward a zero-carbon footprint. She also said that Tri-State was looking at nuclear power options. Vice Chairman Hutchison moved to confirm Chairman Reida’s approval of Ms. Gottschalks’ travel to Tri-State Generation and Transmission Association’s 2023 annual meeting in Colorado. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – abstain, Mr. Moen – yes and Ms. Peck – absent. The motion carried 3-0 with one abstain and one absent.
The next item on the agenda was the director’s report. Vice Chairman Hutchison gave an update on the Southwest Power Pool (SPP) monthly activities. The Board had a copy of JK Energy’s monthly report. Vice Chairman Hutchison stated that there will be a quarterly meeting in Kansas City starting Monday. He spoke about the HITT M-1 working group. This deals with congestion hedging. There are still two very controversial issues before the group. There has been a lot of discussion within the group and Mr. Krajewski helps with discussing the important issues. His opinion has helped to convince others of the importance of the issues. He also noted that FERC has rejected SPP’s ELCC filing.
The executive director gave an update on the appointee to replace Chairman Reida as the Board’s designated attorney member. He explained that the Legislature is not presently scheduling hearings or votes on confirmation of appointments, as all agenda items are being filibustered and the confirmations would cause additional delay and inability to address critical legislation. The Governor’s staff informed the executive director that due to this the Governor was not making any appointments at this time.
The executive director discussed the way the Legislature is dealing with the filibusters and inability to move bills through the process. What is being done is what is referred to as several “Christmas Tree” bills. This is where a bill on General File would be amended to add numerous additional bills that were under the jurisdiction of one specific committee. LB191 is one of these bills already on General File. An additional seven other bills have been amended into the main bill. One of those bills is LB 267, which is the Critical Infrastructure Utility Worker Protection Act, has been added to this bill. OPPD requested this bill and the PRB has it listed on our tracking document. The bill would make utility workers eligible to receive preferential treatment during an emergency for personal protection equipment and vaccines, etc., just like law enforcement, firefighters and medical personnel currently receive. LB 191 was advanced to Select File on April 20.
Another Christmas Tree bill is LB 565. The original bill pertained to clean hydrogen hubs. The bill now has several additional bills including LBs 289, 567 and 568 that the PRB has on its tracking document. LB 289 addresses authority for agencies created under the Municipal Cooperative Financing Act. The bill clarifies that MEAN would have the authority to “own, operate, contract to operate, or lease advanced metering infrastructure technology.” MEAN asked for this bill because some of its members are requesting MEAN to install and operate smart meters in their towns. An attorney general’s opinion determined that MEAN may lack the authority to engage in such activities. LB 289 bill would make it clear that MEAN is authorized to own, install and operate advanced meter infrastructure. Also included in this bill is LB 567. This bill defines the term “reliability.” It also makes it mandatory for the designated representative organization that prepares the annual Load and Capability Report (currently the Nebraska Power Association) to include any additional information the PRB requests in the report, if the request is submitted in writing, is consistent with the PRB’s statutory responsibilities, and can be performed at a reasonable cost. The bill also removes the prohibition against high-level managers of PPD’s from serving as a director on another PPD’s board. LB 568 would adopt the Nuclear and Hydrogen Development Act and is also on the PRB’s tracking document. The bill would create a working group and allocate $5 million from the general fund. The fund would terminate on July 31, 2028.
The final item on the executive directors report was a question regarding whether the proceeds from utility divisions providing information technology (IT) or electrician/electrical engineering services to third parties should be included in that utility’s gross income figure for PRB assessment purposes. The PRB staff was contacted by a utility that posed the question. The utility explained that it was a cooperative and had previously had two wholly owned subsidiary companies. One provided IT services to general public and the other provided electrician and electrical engineering services. When these operated as separate companies their income was not included in the gross income figure submitted to the PRB for assessments. The cooperative’s board decided to end the wholly owned subsidiaries and they are now divisions within the cooperative. The executive director said it was his opinion that the income from the IT services division would not be included, but the services for electricians and electrical engineering would be included in the cooperative’s gross income figure. The executive director believed IT services had no direct relationship to electric or utility services, but providing electrician services does. He believed this was in keeping with the Board’s longstanding positions on what constitutes gross revenue. The Board members had a copy the controlling statute and the letter that is sent by the PRB to the utilities asking for the gross income figure. The letter explains that revenue from items such as water would not be related to electrical and should not be included, but the electricity to operate the irrigation pump would be included, as would revenue from leases of the utility’s property. Executive Director Texel told the Board he had discussed the issue with Ms. Peck, as she is the Board’s designated accountant member. Ms. Peck at the time expressed concern that the statue did not provide an exemption or exception for any funds to not be included as gross income. The statute also does not explicitly provide the Board with discretion to exempt any type of income. She agreed that pass-through collections of donations or taxes are not gross income for a utility, as those are collected for another fund and transferred. This situation is more common for municipalities that collect a tax or donations and turn them over to the municipality’s general fund. She stated that since the PRB has for many decades exempted income that has no meaningful relationship to the electric utility functions, she supported the executive director’s opinion. Mr. Moen stated that he did not feel that the Board needed to take a vote on this, but rather just give the executive director advice. Vice Chairman Hutchison agreed with Mr. Moen. He said if the Board has been operating in this manner for many years, then he is okay with continuing that way. All four Board members present agreed that the staff should continue to define gross income the way it has historically been handled, and expressed support for the executive director’s opinion.
The executive director reminded the Board members that the Midwest Reliability Organization (MRO) will be giving a presentation to the Board on the MRO’s 2023 Regional Risk Assessment at the May 19 meeting. The MRO gave a similar presentation to the Board several years ago. The MRO officials will give the presentation via Webex.
Executive Director Texel stated that the next PRB meetings are May 19, June 9, and July 21, 2023. The June 9 date does not follow the Board’s normal third Friday due to a scheduling conflict for the staff. Mr. Moen informed the Board that he would be absent from the June meeting.
Vice Chairman Hutchison moved to adjourn the meeting. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison –yes, Ms. Gottschalk – yes, Mr. Moen – yes and Ms. Peck – absent. The motion carried 4–0 with one absent. The meeting was adjourned at 10:36 a.m.
Timothy J. Texel
Executive Director and General Counsel