NEBRASKA POWER REVIEW BOARD
Minutes of the 847th Meeting
November 17, 2023
The 847th 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 Chairman Reida, Vice Chairman Hutchison, Ms. Gottschalk and Mr. Moen. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on November 7, 2023. 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 October 20, 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. Ms. Gottschalk moved to approve the draft minutes. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – abstain, Ms. Gottschalk – yes, and Mr. Moen – yes. The motion carried 3-0, with one abstaining and one vacancy.
The next agenda item was acceptance of the expense report for the month of October. In October there was $27,943.46 in personal services, $17,148.57 in operating expenses, and (-)830.42 in travel expenses. The total October expenses were $44,261.61. Executive Director Texel explained that the Board has used 33.79% of the agency’s cash fund, and as of October 33.3% of the fiscal year has gone by, so the Board’s budget percentage is running in line with the time elapsed. Mr. Moen moved to accept the October expense report. Vice Chairman Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk – yes, and Mr. Moen – yes. The motion carried 4-0, with one vacancy.
The next item on the agenda was to consider SAA 51-23-A. This is a joint application submitted by the City of Grand Island and Southern Public Power District to amend the retail service area boundary around the city of Grand Island. The application was filed on October 24, 2023. The agenda stated that the application would transfer a tract of territory annexed by the City from Southern PPD to the City. Exhibit B shows the tract in relation to Exhibit A. Exhibit A is a map of the entire service area between the City and Southern PPD. In the application, paragraph 2 provides a metes and bounds description of the territory to be transferred. The tract is referred to as the “Wildwood Business Park Subdivision.” Southern PPD does not have infrastructure or customers in the territory, so no compensation will be involved. Vice Chairman Hutchison moved to approve SAA 51-23-A. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk –yes, and Mr. Moen –yes. The motion carried 4 – 0 with one vacancy.
The next item on the agenda is to consider SAA 411-23-A. This is a joint application submitted by the Nebraska Public Power District and the Northeast Nebraska Public Power District to amend the parties’ retail service area boundary. The application was filed on November 9, 2023. The agenda states that the application would transfer a tract of territory several miles southwest of South Sioux City from Northeast NE PPD to NPPD. Exhibit A is a detailed map of the territory involved. Exhibit B is a metes and bounds description of the territory involved. Exhibit C is a map showing the distribution lines and customers that are involved in the transfer. There is one customer in the tract of territory to be transferred to NPPD. There are two other customers just to the east of the tract to be transferred that are inside NPPD’s service area, but are currently served by Northeast NE PPD. The parties have agreed to transfer the additional two customers from Northeast NE PPD to NPPD. Exhibit C states that NPPD will pay Northeast NE PPD 2.5 times the annual revenue from those three customers as compensation. Chris Elliott, general counsel for NPPD, spoke on behalf of the transfer. He stated that the total compensation would be approximately $10,000. The amount was primarily for the revenue from the customers. The distribution that was in the area was older and had a depreciated value and would be retired. Mr. Sorenson, a Northeast PPD representative, confirmed via Web-ex that Northeast NE PPD agreed to the transfer and Mr. Elliott’s information on compensation was accurate. Vice Chairman Hutchison moved to approve SAA 411-23-A as described. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk –yes, and Mr. Moen –yes. The motion carried 4 – 0 with one vacancy.
The next item on the agenda was PRB-4006. This was scheduled for an evidentiary hearing to begin at approximately 9:30 a.m. The Board moved to the next item which was the director’s report.
The first item was the update on Southwest Power Pool (SPP) activities. The Board had a copy of JK Energy’s monthly activities report. The Board did not have any questions about the update and Vice Chairman Hutchison spoke about the upcoming RSC election. The RSC was recommending that Vice Chairman Hutchison be the secretary/treasurer for 2024. Vice Chairman Hutchison also spoke about some key issues that will be discussed further by the Regional State Committee. One of the issues is performance-based accreditation and the methodology to get the accreditation. This methodology will need to be filed with the Federal Energy Regulatory Commission. There is some controversy to the methodology. He spoke about Winter Storm Uri and how North and South Dakota never had power outages and the majority of generation issues were in the southern states. Nebraska had only 7% of the generation outages, and Oklahoma and Texas were in the 30% range. SPP recently moved to a 15% planning reserve margin (PRM). However, there is an ongoing discussion about the need to have a separate winter PRM, which could be in the upper 20% range. This variation from the North to South is why it will be a challenge to establish a winter PRM. Vice Chairman Hutchison then discussed the recent resignation of the Texas PUC Commissioner, who is the current vice president of the RSC. The members asked about Vice Chairman Hutchison becoming President of the RSC for 2024. After much discussion with his family and many calls from other RSC members, Mr. Hutchison declined that option. He wanted to be able to concentrate on his work on the REAL team and the President position would require more time.
Chairman Reida noted that he had attended the recent American Public Power Association (APPA) Legal and Regulatory Conference. One presentation described how a separate winter PRM would need to be approximately 26%. The speakers said some RTOs are modeling four seasonal periods: summer, winter and two shoulder months.
The Board recessed at 9:32 a.m. to conduct the evidentiary hearing on PRB-4006. During the recess the Board will act in its quasi-judicial capacity. The hearing was available for viewing via Web-ex, however, no comments or questions can be accepted during the hearing by any viewers that are not a party to the application. Executive Director Texel said after the hearing the Board will reconvene its public meeting. The Board reconvened its public meeting at 10:31 a.m. All four board members that were present at the recess were again present.
During the hearing the Board heard testimony on behalf of NPPD’s application PRB-4006. This is an application for eight miles of 115 kV transmission line in Madison and Stanton counties. The line will be located southeast of the City of Norfolk and run between two substations. As stated prior to the recess, the Board’s review of PRB-4006 was conducted in the Board’s quasi-judicial capacity. It is the Board’s practice in uncontested applications to place issues on the agenda and provide an answer of approval or not during Board’s public meeting. This is done as a courtesy to the utility filing the application, so that the utility may proceed with the project and not have a delay of five to six weeks while the transcript is prepared and the Board drafts its final written order. Ms. Gottschalk moved to approve PRB-4006, and that the order will state that NPPD must comply with the mitigation measures for Northern Long-Eared Bats, White Lady’s Slipper and Western Prairie Fringed Orchids as described in the Game and Parks Commission letter dated October 12, 2023. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk –yes, and Mr. Moen –yes. The motion carried 4 – 0 with one vacancy.
The next item to discuss was whether to request additional information or provide clarification on issues in the annual load and capability report. Vice Chairman Hutchison asked to have this on the agenda so it could be discussed. He stated that NPA did not fully address a couple of items in the 2023 report. He stated that there is some public information available concerning the resource adequacy. This is given to SPP and it would seem reasonable to give it to the PRB in the report. He also had some concern about the stress testing addressed in the report. He felt that the outage example may not be reasonable. He referred to Winter Storm Uri. The one item not addressed was historic outage rates. There is not a standard to compare it to, but he did not believe that was a good reason not to report on it. Also, the stress periods may provide us with what scenario should be addressed. Chairman Reida stated that the events that were picked was if all natural gas failed, and then the following year a different scenario would be picked. Chairman Reida talked about the base load units cycling and how those facilities are designed to be run and the newer facilities are designed to cycle and run when the demand is needed. This type of facility may not have a life span of what the older coal and natural gas facilities have due to the increased stress. The Board agreed to create a committee to discuss the additional information and concerns regarding the Load and Capability Report with Nebraska Power Association (NPA) representatives. The Board designated Ms. Gottschalk and Vice Chairman Hutchison to be the committee.
The Board members then discussed the SPP RSC succession planning activities and potential legislation. Vice Chairman Hutchison, Ms. Gottschalk and Executive Director Texel met with Nebraska Power Association representatives Shelley Sahling-Zart and John McClure after the August PRB meeting. The Board had previously discussed what changes it thought should be addressed and asked to have those sent to Mr. McClure and Ms. Sahling-Zart for further discussion. Some of the changes would include removing the requirement that one board member be an accountant and a slight increase in the per diem amount. Another change would allow a recent employee of a utility to be appointed with less than four years since he or she no longer worked for an electric utility. The NPA meeting this month was cancelled, so Executive Director Texel did not have an opportunity to discuss the proposed legislation with the NPA and ask for its support. The Legislative session will begin on January 3, 2024, and senators like to have potential bills be presented to them well ahead of time. Timing is crucial because senators are preparing the bills now. The executive director recommended that the Board authorize him to speak with Senator Bostelman about sponsoring the bill. It has been the Board’s longstanding practice to ask the chair of the Natural Resources Committee first before going to any other senator. The Board agreed that it should pursue the issue of RSC succession planning. James Dukesherer, director of government relations for the NREA, spoke stating that utilities are aware of the language and although some suggestions may be brought up, he did not see any reason to believe the bill would be opposed. Vice Chairman Hutchison made a motion to pursue an amendment to 70-1003 concerning RSC succession planning and other issues set out in the draft bill, and authorize staff to contact senators to carry the bill. Ms. Gottschalk seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison – yes, Ms. Gottschalk –yes, and Mr. Moen –yes. The motion carried 4 – 0 with one vacancy.
The next item the Board discussed was whether to pursue a legislative change to provide the Board with jurisdiction over complaints regarding net metering provisions in Nebraska Revised statute sections 70-2002 to 70-2004. Executive Director Texel had asked to place this on the agenda for discussion. The law creating Nebraska’s net metering system was enacted in 2009. The law requires retail utilities to allow net metering facilities if they meet certain requirements. The legislation did not create any form of oversight mechanism or authorize any agency to settle disputes. If a dispute occurs between a customer and a utility, and the customer cannot get anywhere with the utility’s management and governing body, the only recourse for the customer is to go to court. The cost to file a lawsuit is very prohibitive. The PRB has received numerous calls from customers or installers about where to go to get help when a disagreement with a utility occurs. Executive Director Texel thought that it would be far less expensive and time consuming if the PRB were authorized to follow its current complaint proceeding authority to address disputes concerning net metering law provisions. Sometimes this would help the utility with a difficult customer, and sometimes this would help a customer or installer with a utility that has misunderstood what the net metering statutes require or allow. The draft bill requires the customer to bring the issue to the utility’s governing body prior to filing a complaint with the PRB, and would not allow the PRB to impose a penalty or fine if a utility had misinterpreted the statute. James Dukesherer, representing the Nebraska Rural Electric Association, spoke to the Board with concerns about introducing the bill. He explained that the customers and installers have the option to address the concerns to the utility boards. He explained that this is an example of local control. He said he understands there is some ambiguity in parts of the net metering language. Some of the issue is how utilities handle their billings and the customers do not understand the process of how the net meter billing is handled. He then stated that the utilities have publicly elected boards that offer the best direct representation. He believes the best procedure is for a customer with an issue to be placed on the agenda for the utility board so the utility manager and governing body can discuss the issue. Executive Director Texel said one example of the issues that arise deals with the insurance requirement. He believed that if the PRB has authority over the issue, he would be able to mediate between the customer and the utility, and most disputes would never go to a hearing. That process is used frequently as part of the PRB’s current complaint process. Once a precedent was set for an issue, he would be able to simply provide a copy of the decision and that would handle the issue moving forward. Mr. Texel stated that he is not comfortable mediating or providing his opinion on net metering disputes when the PRB has no jurisdiction over the topic. Ms. Gottschalk stated she has mixed feelings about the language. She believes installers are not always honest to the customers and that is where many misunderstandings start. Executive Director Texel stated that consistency among the utilities based on PRB interpretations would help the customers and installers understand the issues involved, and reduce the likelihood for installers to provide incorrect advice to their customers. Vice Chairman Hutchison asked what would happen if the Board would support this proposed bill. What would be the next step? Executive Director Texel stated that he would contact the senators to find one who would introduce the bill. Then it would be up to the senator if the bill would be remain separate or if it might become part of another bill later in the legislative process. Chairman Reida stated that there is ambiguity in the language of the net metering statutes. The one point that bothers him was the offset and charge of additional demand and talked about ratcheting demand. He was also concerned about the utilities avoided cost and what would happen if a plaintiff would want to know this cost through discovery. Executive Director Texel stated that his belief is that determination of the correct amount for avoided cost is an issue that would go to district court and not through the PRB, since that would not be an interpretation of the statutory language. Vice Chairman Hutchison stated maybe there needs to be a guidance document to clarify disputed net metering language. Executive Director Texel said the PRB would have no authority to issue a guidance document on a net metering statute because the PRB lacks any statutory jurisdiction over net metering. Mr. Dukesherer stated flexibility is provided for in the statute. A utility can meet its one percent (of peak load, after the utility is not required to interconnect any further net metering facilities) and have its own standard to allow more net metering customers. Vice Chairman Hutchison stated that although he believes there are benefits in the draft legislation, he does not think the Board should pursue the amendment at this time because he does not feel the Board would have majority agreement on the issue. Ms. Gottschalk stated that she felt that the Board should continue a discussion on this matter.
Executive Director Texel stated that the next PRB meetings are scheduled for December 15, 2023, and January 19 and February 16, 2024.
Vice Chairman Hutchison moved to adjourn the meeting. Chairman Reida seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Hutchison –yes, Ms. Gottschalk – yes, and Mr. Moen – yes. The motion carried 4 –0 with one vacancy. The meeting was adjourned at 11:35 a.m.
Timothy J. Texel
Executive Director and General Counsel