NEBRASKA POWER REVIEW BOARD
Minutes of the 850th Meeting
February 16, 2024
The 850th 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 South, Lincoln, Nebraska. The roll was called and present were Vice Chairman Hutchison, Ms. Gottschalk, Mr. Liegl, and Mr. Moen. Vice Chairman Hutchison was participating via Webex. Executive Director Texel explained the reason that former PRB Chairman Reida was not in attendance. The Governor appointed Bill Austin to be the designated attorney member on December 13, 2023. Since Chairman Reida was continuing to serve, there was no vacancy and Mr. Austin needed to wait to be seated until the Legislature voted on his confirmation. Both Mr. Liegl and Mr. Austin attended their confirmation hearings before the Natural Resources Committee on February 7. The full Legislature confirmed both appointments on February 14 with a vote of 29 to 0. Mr. Austin was not yet present but was en route to the meeting. Executive Director Texel then said a special thank you to Mr. Reida, who served on the Board for 11 years and 10 months. He was one of the longest serving members and served as the chairman for the past several years. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on February 6, 2024. The Board also made the meeting available to the public through Webex. The Webex login 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 in the back of the room. A copy of all materials that the Board would consider was available for public inspection on a file cabinet on 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 January 16, 2024, 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. Mr. Liegl moved to approve the draft minutes. Ms. Gottschalk seconded the motion. Voting on the motion: Vice Chairman Hutchison – yes, Mr. Austin – absent, Ms. Gottschalk – yes, Mr. Liegl – yes, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The next agenda item was acceptance of the expense report for the month of January. In January there was $27,224.17 in personal services, $32,033.57 in operating expenses, and (964.41) in travel expenses. The total January expenses were $58,293.33. Executive Director Texel explained that the Board has used 61.54% of the agency’s cash fund, and as of January 58.3% of the fiscal year has gone by, so the Board’s budget is approximately 3.5% over budget. The executive director explained that the Board had received reimbursement checks from the Southwest Power Pool (SPP) for Vice Chairman Hutchison’s SPP-related travel, which is why the travel expenses category was in the positive. He also explained that there were two payments made to JK Energy in the month of January, at the very beginning and the very end of the month. This will even out in February when there will be no payment to JK Energy in that month. Ms. Gottschalk asked about the reason the dues and subscription category was at such a high percentage. Ms. Hallgren (the Board’s business manager) stated that she would look into what has been paid and why it was at that level. Executive Director Texel explained that in past years the Board had asked that the accounts stay at the correct amount so when it comes time to set the budget the staff knows which accounts are short and where additional money needs to be placed. State agencies are allowed to move funds among account categories that are part of operating expenses, but not personal services (pay and benefits). The Board wanted to track the expenses accurately instead of moving the funds around to cover each account category. Ms. Gottschalk moved to accept the January expense report. Mr. Liegl seconded the motion. Voting on the motion: Vice Chairman Hutchison – yes, Mr. Austin – absent, Ms. Gottschalk – yes, Mr. Liegl – yes, and Mr. Moen – yes. The motion carried 4-0 with one absent.
The Board took a quick break at 9:17 a.m. During this time Mr. Austin arrived and took his oath of office. Mr. Austin was introduced to the Board and audience. The Board reconvened at 9:19 a.m.
The next agenda item was to consider SAA 159-24-A. This is a joint application submitted by the City of David City and Butler Public Power District to amend their retail service area boundary. The application was filed on January 31, 2024. The amendment would transfer three tracts of territory, two of which are based on annexations. On December 14, 2022, David City adopted Ordinance No. 1409. This ordinance covered a portion of area on the northwest edge of the City. Ordinance No. 1415 was also adopted on December 14, 2022. This ordinance covers a tract of territory to the south of the City and includes the airport. The third tract of territory is located on the northeast edge of the City and is in section 18, Township 15 North, Range 3 East. The annexation occurred over a year ago. Municipalities have one year from the date of an annexation to file an application to absorb the annexed area into the retail service area. Neb. Rev. Stat. section 70-1008(2) allows the parties to file an extension to allow for them to negotiate the details of the transfer. On December 21, 2023, the parties filed an agreement with the Board providing for an extension of the deadline. Although the compensation amount is not stated in the agreement, the parties separately submitted a breakdown of what David City would pay Butler PPD once the Board approves the application. The parties also filed applications and consent forms setting out that Butler PPD will retain the right to serve 13 customers at the airport (PRB-4017), two cell towers in section 24 (PRB-4018), two residential loads in section 24 (PRB-4019) and four residential loads in section 18 (PRB-4020). Each of these applications include a conditional consent. Butler PPD would continue to serve the loads for six years. During that time the City could 90 days’ notice and upon payment of compensation, the City could take back that service. If there is no extension of the agreement or request to take over those services in the six years, the conditional waiver becomes permanent. The parties notified the Board that during the six years they would continue joint planning for any future expansions. Ellen Kreifels, an attorney representing Butler PPD, addressed the Board and stated that the City is seeing significant growth in its area and will be continuing its discussion with Butler PPD regarding joint planning. Ms. Gottschalk moved to approve the joint application SAA 159-24-A. Mr. Liegl seconded the motion. Voting on the motion: Vice Chairman Hutchison – yes, Mr. Austin – yes, Ms. Gottschalk – yes, Mr. Liegl – yes, and Mr. Moen – yes. The motion carried 5-0.
The next item on the agenda was a briefing from both Nebraska Public Power District and Omaha Public Power District concerning the recent generation unit outages that occurred in January during Winter Storm Gerri. The Board asked the two districts to brief the Board on what happened during this cold weather event. John McClure, General Counsel for NPPD, addressed NPPD’s outages. Mr. McClure first explained that although Cooper Nuclear Station is on the Missouri River, it did not experience any outage due to low or frozen water. He explained how NPPD has constructed water reserves to assure that the unit can continue to run and the process it takes to assure that the sediment and flow of water is not obstructed. Mr. McClure then discussed the power outage at Gerald Gentleman Station. The power outages were not weather related, but a mechanical breakdown. The repair took about 11 hours. As the tripped unit was going back online, a relay breaker in the switchyard tripped, causing the other unit to go offline. It took about another five hours to alleviate the second outage. The reason the breaker tripped is not yet known, but there is a team reviewing the situation. NPPD’s outage amounted to a total of 16 hours. During that time NPPD was a net buyer, where NPPD is usually a net seller. Mr. McClure stated that this event would not affect rates and that NPPD still overall for the month of January would not be negatively impacted.
Brad Underwood, Vice President for Systems Transformations for OPPD, spoke concerning OPPD’s outages. He gave the Board a handout about historic water levels on the Missouri River. He stated that not all storms are the same. He stated that OPPD’s Nebraska City generation units went offline in January due to feedwater instrumentation panel freezing and low water levels. This is similar to the dashboard going dark on an airplane. He spoke about the days prior to the cold weather event and the outage. There are steps and procedures that OPPD has to follow in generation emergencies. He stated that no OPPD customers went without power during this event. However, there was one pole fire that affected about 1,600 customers, but this event was not related to the generation outage. He explained that when the Nebraska City unit went offline it involved about 1,600 MW of power, during the time when OPPD was expecting a peak winter event of about 1,695 MW. The river level is a new challenge for OPPD. He stated that OPPD has guidelines for high water and low water events. During a normal cold weather event OPPD has a hot water discharge that is released upstream to keep that area open. It was explained that the area where the intake is located is bedrock, so dredging in that area does not help. There is going to be some lessons learned in this situation. OPPD’s team is going to look at how to keep instrument panels from freezing. The water level is a different issue. The Corps of Engineers has its own guidelines for the release of water upstream. The Corps has guidelines it follows to keep water levels at certain heights to avoid ice jams and flooding. Mr. Underwood mentioned the two proposed generation facilities for which applications were just submitted to the PRB the day before the meeting. These new generators would help to diversify the generation mix for OPPD. Mr. Liegl asked about having pooling water available onsite. Mr. Underwood stated that OPPD has never needed to have water onsite. The teams are now looking at different options. He stated that OPPD is planning as if the cold weather events will continue to occur. Vice Chairman Hutchison asked about the SPP policy that would take into account times when a facility does not generate when called upon, and accounts for whether the outage was maintenance related or weather related. This is an item that the SPP Market Monitoring Unit (MMU) is really concerned about -- how to accredit units that have performance issues, and not simply using the unit’s capacity. He asked how OPPD would address this concern to ensure proper accreditation of the Nebraska City facility. Mr. Underwood stated that accreditation used to be based on a unit’s nameplate capacity, but now it is a performance-based accreditation. He stated that OPPD has a team looking at lowering the intake level to address some of the concerns. This is turning out to be a challenging task. Vice Chairman Hutchison stated that he is an OPPD customer and asked about the conservation message sent to OPPD customers during the event. Mr. Underwood said the reason OPPD sent out the message to its customers was because of lessons learned. In winter storm Uri there was very little communication. The customers have provided feedback that if there is a situation, and we can help, let us know. In this particular event there were large customers who looked at ways to reduce their loads. Residential customers also did the same. Vice Chairman Hutchison asked if there were transmission congestion problems. Mr. Underwood stated that there were significant imports due to the loss of generation. In this particular event OPPD became a buyer in the SPP market. He said that for the month of January there will be a negative impact on OPPD’s budget, but in the overall year outlook the impact will absorbed. Mr. Underwood stressed that this event provided an example of the advantages of SPP’s ability to allow sharing power throughout the SPP footprint. The Board thanked Mr. McClure and Mr. Underwood for the briefing and discussion.
The next agenda item was the executive director’s report. First was an update on Southwest Power Pool (SPP) activities. The Board had a copy of JK Energy’s monthly activities report. Vice Chairman Hutchison went over a couple of items. He had participated in a recent online RSC meeting. There were a record number of voting items. He talked about the new RSC president, and mentioned that he had been elected as the RSC secretary. The big issue for this year will be the establishment of a winter planning reserve margin (PRM). The current number is 15%, but it will likely be much higher in the future. The next quarterly RSC meeting is in Denver.
Next was to select the scenario for to be used in the annual Load and Capability Report. Jason Fortik, who is the chair of the NPA’s Joint Planning Subcommittee (JPS), sent the Board three scenarios from which to choose. The Board stated that the one scenario is very similar to the event which was just discussed. Mr. Liegl asked about why the different scenarios are being provided to the Board. It was explained that last year’s report was the first year a scenario event was used. The Board decided it would be better if the JPS were to provide the Board with three real-world scenarios, and the Board would choose which one would be analyzed by the JPS in the annual report. Shannon Coleman, Manager of Energy Resource Planning for OPPD and a member of the JPS, stated the three scenarios presented were the most realistic ones that could be designed. There are two winter scenarios and one summer event. Mr. Moen stated that scenario 1 could also involve a railroad strike. Executive Director Texel stated that scenario 2 appears to be similar to what just happened in Winter Storm Gerri. The Board did not want to select a scenario where similar events had just occurred. The Board asked Ms. Coleman which of the other two scenarios would seem to be the most plausible. She said probably scenario 1. All Board members agreed the first scenario should be used. The executive director told the Board he would convey the Board’s decision to Mr. Fortik.
The legislative bills in the 2024 session was the next item to be discussed. The executive director went over the few bills that have been amended.
LB 43 was a hold-over bill from last session. This bill is being used as a vehicle for several other bills that will all be packaged as part of LB 43. The original bill dealt with hearing officers and administrative rulings. The bill includes an emergency clause. Section 13 and 14 are of interest to the PRB. Those sections address how a hearing officer or judge is to deal with agency interpretations of statutes the agency has jurisdiction over, or the agency’s rules or regulations, when those are involved in a contested case. Executive Director Texel said he believes what is now sections 13 and 14 of the bill appear to be an attempt to repeal the Chevron doctrine. Chevron was a case in which the U. S. Supreme Court held that federal courts are to defer to the interpretations of administrative agencies of statutes pertaining to the agency, or the agency’s regulations. The strange thing is, Nebraska has never adopted the Chevron doctrine, so the bill is overruling something that does not exist in Nebraska. Section 8 expands who can submit public records requests. Currently the statute refers to “citizens.” Section 8 would replace citizens with “residents.” Cybersecurity information is listed as a type of record that can be withheld from the public.
Executive Director Texel spoke about an update to a carry-over bill from last year’s legislative session. LB 399 would change provisions relating to privately developed renewable energy generation facilities, and have those facilities be approved by the PRB, instead of the current administrative certification process. There is a proposal to significantly amend the bill and negotiations are ongoing. The amendment has not yet been introduced.
LB 837 was introduced by Senator Lowe. The bill changes procedures for voting or election precincts for public power districts. This bill was at the request of the Nebraska Rural Electric Association (NREA) to address issues related to how PPD voting subdivisions can be configured. Executive Director Texel suggested he testify in a neutral capacity to explain issues that have be dealt with when the PRB reviews charter amendments, and to support the change proposed in the bill that would remove the limitation that the Board only review a charter amendment to determine if it prejudices rural users of electricity. The Board members authorized the executive director to testify on those issues.
LB 866 was introduced by Senator Bostelman. This is the Board’s bill to address PRB member requirements and the per diem amount. The accountant member requirement would be removed, and it allows a member to have been previously employed within the last four years by a utility, with some voting restrictions. It also changes the term limit from two to three consecutive terms. The per diem amount would be increase from $60 to $100. The bill drafters office wants to remove the term “laypersons” in the current statute and replace it with “additional persons.” A fiscal note of $3,500 was submitted. The fiscal note was needed because the per diem increase affects the Personal Services category in the Board’s budget and that is a dollar amount that the Board cannot adjust. The Legislative Fiscal Office agreed the fiscal note would be needed because the personal services amount is involved. The hearing was Wednesday, January 24, before the Natural Resources Committee. The Nebraska Power Association testified in support of the bill. There was no opposition to the bill. Senator Bostelman told the executive director LB 866 would either be a priority bill or packaged with another priority bill, but has not yet decided which process to use.
LB 1218 was introduced by Senator Bostar. The bill would provide for a motor vehicle registration of certain vehicles, impose an excise tax on electric energy used at commercial electric vehicle charging stations, provide for regulation of certain charging stations, provide a sales tax exemption for certain electric energy, and would allow private entities operating electric vehicle (EV) charging stations to charge based on consumption of electricity instead of increments of time, which is the current requirement. This is similar to another bill on the same topic introduced last year that was strongly opposed by several groups. Executive Director Texel explained that the issue that falls in the PRB jurisdiction is that Nebraska law prohibits anyone selling electricity to a third party inside a utility’s retail service area. This bill exempts that and gives a right of first refusal to private entities to establish EV charging stations in a certain geographic area. Currently private entities that operate EV chargers are required to charge by unit of time spent charging, regardless of how much electricity is consumed, to avoid the prohibition against selling electricity inside of a utility’s service area. Executive Director Texel requested permission to testify in a neutral capacity at the hearing to explain concerns about the definitions and procedures. The definitions for power suppliers and charging station operators create a contradiction, and would technically say that any utility that operates an EV charging station is not a power supplier. Although the bill sets out requirements for EV chargers and locations, it does not provide any enforcement mechanism. That means the courts would be the only entity with jurisdiction over violations. The executive director requested permission to suggest that the Board could be designated as the entity that has initial jurisdiction over violations of the requirements pertaining to EV charging stations, the parties operating them, their locations, and charging by kilowatt hours consumed. All Board members agreed the executive director should testify as he proposed.
LB 1240 was introduced by Senator Wayne. This bill provides a restriction on state officials and state employees testifying before the Legislature. The bill requires state officials and employees providing testimony in their official capacity at Legislative hearings to be categorized as testifying neutral. They could not testify with a position of support or opposed. State officials and employees testifying in their personal capacity can testify however they want. In 2022 the exact same bill was introduced and was indefinitely postponed.
LB 1369 was introduced by Senator John Cavanaugh. The bill requires that agricultural generation facilities be interconnected with the local distribution system. The language would prohibit local distribution utilities from refusing to interconnect an agricultural generation facility. The bill provides a definition of what constitutes an agricultural generation facility.
LB 1370 was introduced by Senator Bostelman. The bill provides a role for the PRB when a utility decides to retire a dispatchable electric generation facility. The Board had concerns about this bill and discussed what testimony the executive director should provide when testifying. Vice Chairman Hutchison asked about the definition of the term “state’s electric grid.” Ms. Gottschalk spoke about the concept that the utilities already are required to come to the Board for approval of new generation, including those that may take the place of what is being retired. She thought it made sense that the Board have some role in reviewing when a retirement should take place, also. Vice Chairman Hutchison brought up the discussion from a year or two ago when the Board raised the issue of having some role in retirements of generation facilities. At the time the utilities urged the Board to engage in further discussions before introducing language for a new statute regarding retirements, and the press couched the idea in a negative light. The Board eventually dropped the discussion. The Board members thought it would be good to provide testimony that states that the Board wants to assure that the State, and each utility, has sufficient dispatchable resources to ensure resource adequacy. The Board discussed the lack of enforcement mechanism in the bill. The Board thought the bill’s provisions should be placed in Chapter 70, article 10 of the statutes. Three Board members agreed to authorize the executive director to testify in a neutral capacity on LB 1370, but convey the Board’s concerns over preservation of dispatchable resources and resource adequacy.
Executive Director Texel also told the Board about another amendment from Senator Bostelman concerning protection of critical infrastructure. The amendment would be added to a bill that would require that no components of critical infrastructure located within 10-mile radius of a military base could have been manufactured by a government listed as a foreign adversary in 15 CFR Part 7.4. The details have not yet been worked out for this bill, but Senator Bostelman asked the executive director to assist in drafting language for the amendment.
The next item on the agenda was the election of Chair and Vice Chair for 2024. Executive Director Texel stated that the Board needed to vote on the Chair and Vice Chair, as former chairman Reida was no longer on the Board, and the staff is waiting on the vote to order new letterhead, which is needed. Mr. Liegl nominated Vice Chair Hutchison to be chair and Mr. Moen to be vice chair. Mr. Moen said since this will be his last year on the Board, the thinks it would make more sense for Ms. Gottschalk to be vice chair. Mr. Liegl withdrew his nominations. Mr. Liegl moved to nominate Vice Chair Hutchison as chair and Ms. Gottschalk as vice chair. Mr. Austin seconded the motion. Voting on the motion: Vice Chairman Hutchison –yes, Mr. Austin – yes, Ms. Gottschalk – yes, Mr. Liegl – yes, and Mr. Moen – yes. The motion carried 5 –0.
Executive Director Texel stated that the next PRB meetings are scheduled for March 15, April 19, and May 17, 2024.
Mr. Moen moved to adjourn the meeting. Mr. Liegl seconded the motion. Voting on the motion: Chairman Hutchison –yes, Vice Chairman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – yes. The motion carried 5 –0. The meeting was adjourned at 11:48 a.m.
Timothy J. Texel
Executive Director and General Counsel
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