NEBRASKA POWER REVIEW BOARD
Minutes of the 827th Meeting
January 21, 2022
The 827th 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. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on January 12, 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. 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 December 27, 2021, 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, and Mr. Moen – yes. The motion carried 4-0 with one vacancy.
The next agenda item was acceptance of the expense report for the month of December. In December there was $33,743.01 in personal services, $16,790.76 in operating expenses, and $492.56 in travel expenses. The total December expenses was $51,026. The personal services category is higher than normal because there were three pay periods in December. The fiscal year is at 50% at the end of December and 51.21% of the Board’s cash fund has been used. Chairman Reida asked about the Board’s legislation to increase the RSC SPP member’s per diem and how that would affect the budget. Executive Director Texel explained that when a bill without an emergency clause is approved it goes into effect three months after the end of the Legislative session. The fiscal note attached to LB 804 will appropriate the additional funds to the Board’s budget. Then the issue will be whether the Governor’s budget office will allow the additional funding to be added to calculate the Board’s assessment figure. Mr. Moen moved to accept the December 2021 expense report. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen – yes. The motion carried 4-0 with one vacancy.
The next agenda item was to consider renewal of State Contract 94906 O4. This is the contract the State has with JK Energy Consulting, LLC for John Krajewski to be the Board’s designated member on the Southwest Power Pool’s (SPP) Cost Allocation Working Group and to advise the Board member that serves as the PRB’s representative on the SPP’s Regional State Committee. In 2021 a new contract was issued. This would be the first renewal of the contract. The State allows a maximum of five renewals. The renewal period would run from July 1, 2022 to June 30, 2023. The current dollar amount is $13,750 per month, which is $165,000 annually. JK Energy submitted a letter confirming it wanted to renew the contract. There is an amendment to Section IV, paragraph G, which is the “funding out” clause. This is a mandatory clause in all state contracts. The funding out clause states that if the Legislature were to not appropriate sufficient funds to pay the contract, the agency can cancel the contract. This clause works for other state agencies, but the PRB has another step in its funding approval process. Unlike other State agencies, the Governor’s Budget Office, and ultimately the Governor, must approve the assessment figure that controls how much of the Legislature’s appropriation the Board will be allowed to collect for its cash fund. The amendment clarifies that if the Governor’s Budget Office does not allow the Board to collect sufficient funds for the Board’s expenses, the Board can cancel the contract. The Department of Administrative Services legal division approved the new language, and JK Energy has accepted the new language, too. DAS Materiel Division will process the renewal and executes the new contract once the Board gives approval of the renewal and the proposed amended funding out clause. Mr. Krajewski was available on the Web-ex to comment. He stated that last month he introduced his new staff member. He felt comfortable about the amendment and was looking forward to another year working with the PRB. Vice Chairman Hutchison moved to approve the renewal of contract 94906 O4 with JK Energy Consulting, LLC for July 1, 2022 to June 30, 2023, and to approve the proposed amendment to the funding out clause in Section IV, paragraph G of the contract. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen – yes. The motion carried 4-0 with one vacancy.
At 9:33 a.m. the Board recessed its public meeting to conduct an evidentiary hearing on application PRB-3691-G. During the hearing the Board operates in its quasi-judicial capacity. The public who are watching the meeting on Webex are welcome to watch the hearing, but will not be able to participate at all. Only the Board members, hearing officer, and applicant’s legal counsel and witnesses can participate in the hearing. The Board received exhibits and heard testimony on application PRB-3961-G. The Board reconvened its public meeting at 11:08 a.m. All members present prior to the recess were again present.
The next item on the agenda was to consider SAA 252-21-A. This is a joint application submitted by Loup River PPD and Cornhusker PPD to amend retail service area agreement SAA 252. The application was filed on November 29, 2021. The amendment would transfer a large tract of territory annexed by the City of Humphrey from Cornhusker PPD to Loup River PPD. The area is on the northeast edge of Humphrey. Exhibit A is the current service area and Exhibits B and C are maps showing the territory to be transferred. Humphrey annexed the territory in December 2020. State law allows a municipality to add annexed territory to its electric retail service area if it files an application to do so within one year of the annexation. Loup River PPD holds the service area rights to the City of Humphrey. It has been the Board’s longstanding precedent that a public power district or cooperative that holds the service area rights to a municipality operates as the municipal utility for purposes of a service area amendment. In the application it states that there are 29 customers in the annexed area. Loup PPD and Cornhusker PPD submitted a letter providing the details of compensation for these customers. The total compensation the parties agreed Loup River PPD should pay to Cornhusker PPD for the loss of revenue and infrastructure in the annexed area is $1,000,000. Due to the infrastructure and customers involved in the transfer, both districts requested the PRB to make the effective date of the transfer October 1, 2022. Cornhusker PPD would continue to serve the area until October 1, 2022. At that time Loup River PPD would take over the service and the boundary change would become effective. The parties need additional time to coordinate the transfer of the customers and infrastructure involved. Mr. Grennan moved to approve SAA 252-21-A as described and make the effective date October 1, 2022. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen – yes. The motion carried 4-0 with one vacancy.
The next item on the agenda was Butler PPD’s Amended Petition for Charter Amendment 10. Vice Chairman Hutchison asked if the Board could take up the charter amendment items in one motion. The Board thoroughly reviewed the charter amendments at the Board’s December 27, 2021 public meeting. The charters received conditional approval, but the Board needed to wait on the publication of notice and three week period for filing of protests or objections. Executive Director Texel believed it would be cleaner and more legally sound to go through each charter amendment and do a separate motion for each. Since the Board discussed these previously he would keep his comments on each charter amendment very brief.
As mentioned, the charter amendments all fall under § 70-663(2), which was enacted during the 2021 Legislative session. This was done due to the very late release of the 2020 Census data. The new subsection of 70-663 states “If the proposed amendment is in proper form, the Nebraska Power Review Board shall give conditional approval of the amendment on or before December 30, 2021.” At the Board’s December 27, 2021 public meeting each charter amendment received a conditional approval. The Board’s process now is to vote on final approval of the charter amendments where the notice and wait periods have ended.
The original petition for Butler Public Power District’s Amended Petition for Charter Amendment 10 was filed on November 10, 2021. An amended petition was filed on December 10, 2021. The purpose of the petition is to amend charter section 6 to redraw the district’s subdivision boundaries based on the 2020 Census and update the list of directors. The Petition is filed pursuant to §70-604(6), which is the substantially equal population standard. Butler PPD has seven subdivisions, with one director for each subdivision. Exhibit A is a map showing the subdivisions and how they are being changed. Exhibit B shows the population figures. Population figures are also provided on pages 4 and 5 of the amended petition. The variance from the largest to smallest subdivision is .9%, with one subdivision .42% above the ideal, and one subdivision .48% below the ideal. None of the subdivisions are more than 5% from the ideal, and the total variance is below 10%. Notice of the proposed amendment was published on November 25, December 2 and December 9, 2021 in the Wahoo Newspaper and the Banner Press newspapers. The notice stated that any interested party could file a protest or objection by 5 p.m. on December 29, 2021. 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, 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 the District will not nullify, conflict with, or materially affect those of, or on the part of, any other district, and the amendment provides for substantially equal population in the District’s voting subdivisions. This is the finding the Board will need to make for each of the final charter amendments on the agenda. The equal population criteria will not apply if a district is using the “rural customers will not be prejudiced thereby” standard. Vice Chairman Hutchison moved to waive a hearing and approve Butler Public Power District’s Amended Petition for Charter Amendment 10. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The next item on the agenda was the Howard-Greeley Rural Public Power District’s Petition for Charter Amendment 7. The petition was filed on November 17, 2021. The purpose of the petition is to amend charter sections 2 and 6 to redraw the District’s subdivision boundaries based on the 2020 census and update the list of directors. The number of directors would be reduced from 9 to 8 at the end of 2022. The Petition is filed pursuant to §70-612(1)(b), which is the “not prejudiced thereby” standard when a District follows precinct or county boundary lines. Howard-Greeley currently has five subdivisions. The proposed configuration would create six subdivisions on a permanent basis. A seventh subdivision would exist during 2022 and terminate at the end of the year. Exhibit A is the District’s resolution approving the amendment. The resolution states that the District’s board of directors made a finding that the District operates in two counties, more than 50% of its customers are rural, and the rural customers would not be prejudiced by the amendment. The Board published notice of the charter amendment on December 8, 15, and 22 in the St. Paul Phonograph-Herald and on December 9, 16, and 23 in the Greeley Citizen newspapers. No objections were filed. Mr. Grennan moved to waive the hearing and approve the Howard-Greeley Rural Public Power District’s Petition for Charter Amendment 7. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The next item on the agenda was to consider Cornhusker Public Power District’s Petition for Charter Amendment 6. The petition was filed on November 17, 2021. The purpose of the petition is to amend charter sections II and VI to redraw the district’s subdivision boundaries based on the 2020 census and update the list of directors. The Petition is filed pursuant to §70-612(1)(b), which is the “not prejudiced thereby” standard. Cornhusker PPD currently has 10 voting subdivisions. Exhibit B, page 1, is a map showing the proposed subdivisions. The primary changes are in subdivisions 7, 9 and 10. The subdivisions follow precinct boundaries. Exhibit A is the District’s resolution adopted approving the amendment. The resolution states that the District operates in two counties, more than 50% of its customers are rural, and the rural customers would not be prejudiced by the amendment. The Board published notice of the amendment on December 8, 15, and 22, 2021, in the Albion News and Columbus Telegram newspapers. No protest or objection was filed. Mr. Moen moved to waive the hearing and approve Cornhusker Public Power District’s Petition for Charter Amendment 6. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The next item on the agenda was to consider Twin Valleys Public Power District’s Petition for Charter Amendment 8. The petition was filed on November 22, 2021. The purpose of the petition is to amend charter sections II and VI to redraw the District’s subdivision boundaries based on the 2020 census and update the list of directors. The Petition was filed pursuant to section 70-612(6), which is the “substantially equal population” standard. Twin Valleys PPD currently has three voting subdivisions. Exhibit C is a map showing the current subdivisions. Exhibit C, page 2, shows the population figures. The Board publish notice on December 9, 16, and 23 in the Valley Voice and Harlan County Journal newspapers. No protest or objection was filed. Mr. Grennan moved to waive a hearing and approve Twin Valleys Public Power District’s Petition for Charter Amendment 8. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The next item on the agenda was to consider Southwest Public Power District’s Petition for Charter Amendment 5. The petition was filed on November 22, 2021. The purpose of the petition is to amend charter sections 2 and 6 to clarify that the Villages of Trenton and Wauneta are excluded from the District’s chartered territory, and to update the list of directors. The petition was filed pursuant to §70-612(1)(b), which is the “not prejudiced thereby” standard. In section two, subsection II, the language that is added clarifies the exclusion of the Village of Trenton. In section four it clarifies the headquarters is located in Hitchcock county. The subdivisions follow precinct boundaries. The Board published notice of the charter amendment on December 8, 15, and 22, 2021, in the McCook Gazette and Benkelman Post & News Chronicle newspapers. No objection or protest was filed. Mr. Moen moved to waive a hearing and approve the Southwest Public Power District’s Petition for Charter Amendment 5. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The next item on the agenda was to consider the Omaha Public Power District’s Petition for Charter Amendment 8. The petition was filed on November 23, 2021. The purpose of the petition is to amend charter section 6 to redraw the district’s subdivision boundaries based on the 2020 census and update the list of directors. The petition was filed pursuant to §70-604(b), which is the “substantially equal population” standard. Omaha PPD currently has 8 voting subdivisions, with one director for each subdivision. Exhibit C is a map showing the proposed subdivisions. Exhibit D shows the population figures for the proposed subdivisions. The Board published notice of the charter amendment on December 8, 15, and 22, 2021, in the Omaha World Herald newspaper. Notice was also published on December 10, 17, and 24, 2021, in the Blair Enterprise and Nebraska City News-Press newspapers. Due to the size of the District’s territory, the District asked to publish notice in three newspapers instead of two. No protest or objection was filed. Vice Chairman Hutchison moved to waive a hearing and approve the Omaha Public Power District’s Petition for Charter Amendment 8. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
Executive Director Texel told the Board that all public power districts had now either submitted a charter amendment or submitted a letter stating that an amendment was not necessary. A list showing what all 32 districts had done was in the Board’s meeting notebooks.
The next item on the agenda was the director’s report. Executive Director Texel stated Governor Ricketts has appointed Bridget Peck to replace Ms. Loutzenhiser as the Board’s accountant member. The remaining member to be appointed has not been determined yet. However, under state law only three PRB members can be members of the Governor’s political party. Since the Board already has two Republicans and Ms. Peck is a Republican, the appointment to replace Mr. Grennan cannot be a Republican. The Governor’s staff said the next round of appointments will likely be in early March.
Next is the SPP update. Executive Director Texel reminded everyone that Vice Chairman Hutchison has been designated as the PRB’s new Regional State Committee (RSC) representative. He has been listening in on several conference calls to get familiar with the SPP. Chairman Reida asked about JK Energy update. He wanted to know more about the 12% renewable “cap” cited on page 1 of the activity report. The executive director said he would ask Mr. Krajewski about it.
Executive Director Texel updated the Board on the emergency contact procedure with SPP. Executive Director Texel met with officials from the Nebraska Department of Environment and Energy (NDEE) and the Nebraska Emergency Management Agency (NEMA) on this topic. He had provided SPP with a copy of NEMA’s emergency communications policy regarding electric issue. SPP now has a detailed communications plan with RSC members and other State officials. For Nebraska, SPP will notify NEMA if an EEA 1, 2, or 3 is declared. NEMA will follow its procedure steps for notifying NDEE and NEMA officials, who will in turn decide if the Governor’s Chief of Staff needs to be notified. The Chief of Staff will determine if the Governor needs to be notified. The notification procedure for the RSC member and the PRB executive director is a separate communication. RSC members and regulatory agency staff receive notices at an earlier point in the process than when an EEA 1, 2 or 3 are declared.
The executive director discussed the legislative bills introduced in the 2022 session.
LB 804 was introduced by Senator Hughes. This is the Board’s bill for increasing the annual amount of per diem compensation allowed for the PRB’s designated SPP RSC member. Mr. Grennan testified in support of the bill at the hearing this Wednesday. Shelley Sahling represented the NPA and testified in support of the bill. There was no opposition to the bill.
LB 775 was introduced by Senator Brewer. This bill prohibits land disposal of wind turbine blades and their component parts. This also had a hearing on Wednesday.
LB 908 was introduced by Senator McDonnell. This bill deals with virtual conferencing under the Open Meetings Act. The bill was requested by Douglas County. Counties are not one of the public entities allowed to use virtual conferencing. The bill was intended to allow counties and other public bodies not currently allowed to use virtual conferencing to use virtual conferencing to have briefings, presentations and discussions, but no action could be taken at such virtual meetings. The problem is as it is drafted it could be read to restrict the entities that can currently use virtual conferencing only for purposes of briefings, presentations and discussions. The executive director was told that Douglas County is trying to draft new language to correct the problem.
LB 944 was introduced by Senator McCollister. The bill changes the sales tax rate imposed on the furnishing of electricity service. On July 1, 2023, sales tax rate for electricity will be based on a statewide carbon intensity factor. The sales tax rate on electricity decreases as the carbon intensity factor decreases when compared to the factor as of July 1, 2023.
LB 1008 was introduced by Senator Albrecht. This bill prohibits a county, city or village from restricting energy utility service. It was explained that on the west coast some municipalities and counties are banning natural gas and electric connections in new or renovated commercial buildings. The intent of the west coast entities is to prevent climate change by prohibiting connections.
LB 969 was introduced by Senator Dorn. This bill would appropriate federal funds to NDEE to improve reliability and resiliency of the electric grid. $10 million from the Coronavirus funds would be given to NDEE to award for grants for electric infrastructure projects.
LB 977 was introduced by Senator Slama. This bill would appropriate federal funds to the Department of Economic Development for expanding electrical system capabilities. The bill would give $29 million from the Coronavirus funds to Economic Development to a be awarded as grants to cities of 2nd class that partner with public power utilities to expand the electrical system. The primary driver of the bill is Nebraska City, which is on a radial feed line and needs another line for redundancy.
LB 1045 was introduced by Senator Bostelman. This bill changes qualifications for certain PPD Board members. The bill would remove the restriction against a “high-level manager” of a public power district serving as a director on another district’s board.
LB 1046 was introduced by Senator Bostelman. This bill changes provisions relating to selection of the board of directors and chief executive officers of certain public power districts. The bill affects those districts where the chartered territory comprises more than half the counties in Nebraska, and districts with a metropolitan class city in their service area. In 2024, such districts must divide their territory into four subdivisions with substantially equal population for purposes of electing directors. The Governor will appoint five at-large directors who are residents of the district’s chartered territory. The district’s CEO shall be appointed by Governor and be an at-will employee serving at the Governor’s pleasure, but the CEO would be paid and managed by the district. Executive Director Texel said one requirement was for the district to submit a map of the subdivisions to the PRB. It was not entirely clear exactly what the PRB needs to do once the map is received. The bill does not specify if the PRB must approve the map.
LB 1047 was introduced by Senator Bostelman. This bill adds some requirements of what must be included in the annual load and capability reports filed with the PRB. The bill adds “and reliable” to the policy statement in § 70-1001. The most important provisions are on page five of the green copy of the bill. The report must include a description of the firm electric generation resources available to serve firm or non-firm load needs in Nebraska for both summer and winter peak loads. For any firm facility without the capability to store 45 days of fuel onsite, the report must identify 1) the fueld suppliers who can deliver adequate fuel during summer and winter peak conditions, 2) an estimate of the fuel needed during peak load periods, and 3) verification of the supplier’s ability to deliver fuel needed and the method of delivery. The senator’s office requested that Executive Director Texel testify on the bill regarding the significance of reliability in electrical service. The Board felt that it was a good decision to testify in a neutral capacity. The Board agreed that the executive director should testify about the importance of reliability.
LB 1099 was introduced by Senator Bostelman. The bill creates the Nebraska Hydrogen Hub Industry Work Group. It directs the NDEE to create the work group. The group would develop and draft a proposal for submission to the U.S. Department of Energy for Nebraska to be one of the four regional clean hydrogen hubs authorized in the federal Infrastructure Investment and Jobs Act.
LB 1100 was introduced by Senator Bostelman. This bill appropriates funds to the NDEE for a feasibility study relating to nuclear reactors. One million dollars of the Coronavirus State Fiscal Recovery Fund money would be used to conduct a feasibility study to assess siting options for new advanced nuclear reactors in Nebraska and existing generation facilities based on key compatibility assets for nuclear reactors.
The Board established a committee to address positions on bills or amendments submitted during the legislative session. The committee is delegated the authority to take positions or actions regarding a bill or amendment when timing does not allow action during a Board meeting. Vice Chairman Hutchison moved to have the Chair and Vice Chair appointed as the legislative committee. Mr. Grennan seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Mr. Grennan – yes, and Mr. Moen –yes. The motion carried 4– 0 with one vacancy.
The Board had a discussion on following up with the utilities concerning decommissioning. Executive Director Texel explained that the plan is to have a meeting in Lincoln and one in Kearney to discuss the regulatory framework for the electric industry in Nebraska and how to keep information that might be obtained by the PRB confidential. The plan is to hold the meetings in March or April.
Executive Director Texel reminded the Board that the next meetings are February 18, March 18, and April 15, 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, and Mr. Moen – yes. The motion carried 4-0 with one vacancy. The meeting was adjourned at 2:06 p.m.
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Timothy J. Texel
Executive Director and General Counsel
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