NEBRASKA POWER REVIEW BOARD
Minutes of the 855th Meeting
August 16, 2024
The 855th 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 Hutchison, Vice Chairwoman Gottschalk, Mr. Austin, and Mr. Liegl. Mr. Moen had informed the Board he may not be able to attend this meeting due to a previous appointment. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on August 6, 2024. The Board 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 can 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 June 21, 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. Vice Chairwoman Gottschalk moved to approve the draft minutes. Mr. Austin seconded the motion. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – absent. The motion carried 4-0 with one absent.
The next agenda item was acceptance of the expense reports for the months of June and July. In June there was $28,419.10 in personal services, $18,871.10 in operating expenses, and $327.55 in travel expenses. The total June expenses were $47,617.75. Executive Director Texel explained that June 30 was the end of the State’s fiscal year. The Board had used 104.88% of the agency’s cash fund in fiscal year 2023-2024. The amount of the reserve fund used was $27,418.12. In July there was $27,985.52 in personal services, $16,915.35 in operating expenses, and $(-)1,359.66 in travel expenses. The total July expenses were $43,541.61. Executive Director Texel explained that the travel expenses shows positive because the PRB received a reimbursement payment in July from the Southwest Power Pool (SPP) for Chairman Hutchison’s SPP-related travel expenses. This is the first month of the new fiscal year. The cash flow worksheet shows the PRB used 16.9 percent of its cash fund in July. The percentage is inflated, though. The PRB is in the process of collecting the assessments from the utilities. Due to this the cash fund balance is considerably short of its full amount. If the cash fund were fully funded, the percentage of funds used would be 7.5%. Mr. Liegl moved to accept the June and July expense reports. Vice Chairwoman Gottschalk seconded the motion. Voting on the motion: Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – absent, and Mr. Moen – absent. The motion carried 4-0 with one absent.
The next item on the agenda was a presentation covering the basics of the Southwest Power Pool and some of the current events in which it is involved. Paul Suskie, SPP General Counsel and Executive Vice President for Regulatory Policy, gave the presentation to the Board. It covered an overview of how SPP is structured and operates, resource adequacy, the western expansion, and the different markets (WEIS and Market+). During the presentation the Board asked questions about the benefits of being a member of the regional transmission organization (RTO). Mr. Suskie explained that at different times Nebraska is a surplus generator and how the surplus electricity is sold into the market and benefits Nebraska’s customers. At other times Nebraska is purchasing power at a lower cost on the day ahead market. Mr. Suskie went over the governance of the SPP and the different groups that create policies that will be voted on by the Regional State Committee (RSC). Those issues are then taken to the SPP Board of Directors, which has the final vote on whether to implement the policies. Nebraska utilities have been a member of SPP since 2009. The PRB has had a representative on the RSC, and the PRB’s consultant serves on the Cost Allocation Working Group (CAWG). The Board thanked Mr. Suskie for taking the time to travel to Nebraska and give the presentation to the Board.
The Board recessed at 10:27 and reconvened at 10:36. All Board members present prior to the recess were again in attendance.
The next item on the agenda was a presentation of the 2024 Annual Load and Capability Report. The executive director stated that many years ago the Board designated the Nebraska Power Association (NPA) as the representative organization to prepare this report, pursuant to Neb. Rev. Stat. § 70-1024. Jason Fortik, Vice President for Power Supply for the Lincoln Electric System and chair of the NPA’s Joint Planning Subcommittee, gave the presentation on the report. The report covers the utility load forecasts and generation resources available and needed to satisfy the forecasted loads in Nebraska over the next 20-year period on a statewide basis. The report includes information concerning generation units that are planned, committed, and studied in order to meet the State’s projected load growth. The report also covers ten additional items of information the Board requested to be included in the report that are not enumerated in Neb. Rev. Stat. 70-1025(3). Overall, Nebraska currently has excess generation capacity. The average peak demand growth rate for the State is projected to be 1.4% per year. In 2023 the projected growth was 1.5%. Mr. Fortik explained how the growth is calculated. The report projects that without additional generation capacity, on a statewide basis there would be insufficient generation resources to meet the overall planning reserve margin obligations beginning in 2035. Chairman Hutchison spoke about the utilities’ ability to meet the demand of generation needs. He spoke about the recent Omaha Public Power District (OPPD) generation applications brought to the Board and the anticipated online date for those facilities is 2029. In the report NPPD has planned units that are being reported to be online in the year 2027. He asked if the industry suppliers do not have the material available to allow the OPPD generators to be completed and online by 2029, how can NPPD complete its planned units by 2027? Several NPPD representatives spoke on how they would address the issue of bringing new units online very quickly. Jason Rosenkranz, NPPD Resource Planning and Risk Manager, spoke about how NPPD would use firm power purchase agreements and also work with potential loads as to when the load would be able to come online. This could address the need for generation, but would not be shown in the report. This is a bridging strategy to delay some Nebraska loads until new generation can come online. Chairman Hutchison stated that there should be additional information in the report that captures how the utility addresses the situation when vendors and companies with new loads have to wait to come online until the generation is available. In addition to Jason Fortik, other industry representatives addressed the Board’s questions. Brad Underwood, Omaha Public Power District (OPPD) Vice President for Systems Transformation, addressed several questions posed by the Board members. Several Board members expressed concern as to whether they could approve the report as presented. Mr. McClure, NPPD general counsel, stated that he had a discussion with several of the NPA members and offered that perhaps approval of the report could be withdrawn and the report could be revised to add the information under discussion and to avoid the possibility of overpromising when reserve margins might be met. The report could then be brought back to the Board for acceptance. Mr. Fortik stated that he will get together with the Joint Planning Subcommittee members and write an explanation in the report that addresses the concerns the Board has expressed. Vice Chairwoman Gottschalk said that the report could include a caveat explaining the potential problems with vendors and equipment availability, and generally what the challenges are. The Board and NPA representatives agreed the best approach is to temporarily withdraw the report so the new explanations could be added in the report. The Board thanked Mr. Fortik and the other utility representatives for the presentation and the discussion. Mr. Liegl moved to table the 2024 Load and Capability Report until the NPA could revise it and bring it back. Mr. Austin seconded the motion. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin –yes, Mr. Liegl– yes, and Mr. Moen – absent. The motion carried 4 – 0 with one absent.
The next item on the agenda was to consider SAA 405-24-A. This is a joint application filed by K.B.R. Rural Public Power District and the City of Valentine. The application was filed on June 14, 2024. The application would amend the retail service boundary around the City of Valentine. The tract of territory is located on the far southwestern edge of the City’s service area. KBR RPPD is currently serving loads in this area and requested to serve additional customers in the area. Exhibit A shows where the tract is located. The territory to be transferred is in the eastern half of section 11 and most of section 12, Township 33, Range 28 West. A metes and bounds description is provided and was labeled Exhibit B. Executive Director Texel stated that the application is relatively straightforward and recommended approval. Vice Chairwoman Gottschalk moved to approve SAA 405-24-A. Mr. Liegl seconded the motion. Voting on the motion: Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – absent. The motion carried 4-0 with one absent.
The next item on the agenda was to consider SAA 252-24-A. This is a joint application filed by Cornhusker PPD and Loup River PPD. This would amend the retail service area boundary between the two service areas around the Village of Lindsay. The application was filed on July 12, 2024. The Village of Lindsay annexed a tract of land to the north of Lindsay. Exhibit A shows the current boundary. Exhibit B describes the tract and states it is called “Lindsay Area Addition.” Exhibit C shows the area being added to the existing service area of Loup River PPD. The PRB’s longstanding precedent is that when a public power district holds the retail service area rights to a municipality, the district serves as the municipal electric supplier for purposes of incorporating territory annexed by the municipality. There are no current city customers or facilities in the area to be transferred. The executive director said this is also a straightforward annexation and recommended approval. Mr. Austin moved to approve SAA 252-24-A. Mr. Liegl seconded the motion. Voting on the motion: Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – absent. The motion carried 4-0 with one absent.
The next item on the agenda was PRB-4036. This is an application submitted by Butler Public Power District requesting authorization to construct approximately one mile of 69 kV subtransmission line in Butler County. The application was filed on July 19, 2024. The new line would provide service to the new David City substation in order to serve the AGP plant. The line is being built as a 69 kV but will operate at 34.5 kV. The construction would be in section 13, Township 15 North, Range 2 East. David City will be constructing the substation to which the line interconnects. David City filed a consent and waiver form consenting to the application and waiving a hearing. The PRB consulted with the Nebraska Game and Parks Commission (the Commission) as required by Neb. Rev. section 37-807(3). The Commission has implemented a new process that requires the agency taking the action to input information into the “Nebraska Conservation and Environmental Review Tool” (CERT) system. The CERT system then creates a report telling the agency if the project is within the range of an endangered or threatened species. The portion of the report showing the results was in each board member’s meeting notebook. The report found was that the project was within the range of the endangered Northern Long-Eared Bat. The area appears to have no suitable habitat for the bats in the project area. Based on the report the project “may affect, but is not likely to adversely affect” any threatened or endangered species, and the commission did not object to approval of the project. The Board asked why the change was made and why the Commission no longer provides the Board with a consultation letter making a determination whether the project may have an effect on any protected species or their habitat. Both Executive Director Texel and Ms. Birkett expressed frustration in how the Commission is requiring the action agencies to use the CERT process to create the report. Ms. Birkett stated that she did communicate during the process with the Commission to ensure that the proper steps would be taken. She told the Board that she spoke with the project developer about whether there are trees in the project area. The developer provided additional pictures of the area. The construction is occurring during the fall and winter, which is outside of the bats’ roosting season. This is the reason for the “may affect” determination. The Board members did not believe it is appropriate for the Board’s staff to make this determination when they have no knowledge of the work area or understanding of the wildlife or the needed habitat. Ms. Birkett stated that she did communicate with the Commission, but no letter was provided as in previous applications. If during the process of completing the CERT the questions would have been answered that habitat for the protected species was present then further communication with the Commission would be needed. Vice Chairwoman Gottschalk asked several questions about the process and Ms. Birkett brought up the CERT tool on the video screen and showed how the steps were to do the review are accomplished. Vice Chairwoman Gottschalk stated she was not comfortable that the determination was left to the PRB staff, which does not have the expertise to review the effects of a project on wildlife or what habitat is necessary for them. Executive Director Texel told the Board he and Ms. Birkett had expressed these concerns with the Commission’s staff. The Commission had an assistant division administrator speak with Executive Director Texel, who wanted a consultation letter as the Commission had done in the past. The Commission’s assistant division administrator said the CERT process is what the Commission uses now. The executive director had pointed out that the PRB had no knowledge of the project area, the plants or animals in the area, or the habitat required for them. He was unable to convince them to provide a consultation letter as had been done for many years. Mr. Austin stated that although he has concerns about the adequacy of the process, he did not want to hold up the utility’s project over the consultation. He thought that if the Commission claims this new process is the required consultation, the PRB has done what it can to consult with the Commission. Mr. Liegl said in his opinion the consultation required under Nebraska law set out in section 37-807(3) is not being met by the new process where the action agency’s staff performs the evaluation. He therefore believes the Commission has not met its duty to consult, and as a result the PRB has not met its consultation requirement either. Mr. Austin moved to approve PRB-4036. Vice Chairwoman Gottschalk seconded the motion. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – no, and Mr. Moen – absent. The motion carried 3-1 with one absent.
The next item on the agenda was PRB-4037. This is an application submitted by the Nebraska City Utilities requesting authorization to construct approximately .75 mile of 14.4 kV distribution line in Nemaha County. The application was filed on July 25, 2024. The new line would provide service to a new well pump being installed by the Nemaha Rural Water District. The construction would be in Omaha Public Power District’s (OPPD) service area. OPPD filed a consent and waiver form. The PRB consulted with the Nebraska Game and Parks Commission as required by Neb. Rev. section 37-807(3), but as with the previous application, the process involved was the CERT report that the PRB’s staff completes. The report indicated the project is in the range of the endangered Northern Long-Eared Bat and Western Prairie Fringed Orchid. According to the report the project area appears to have no suitable habitat for the bats in the project area and construction was outside of the time-frame for the roosting period. The City Utility Manager signed off on the review tool stating that there were no trees in the project area and there would be no habitat for the Western Prairie Fringed Orchid. The project “may affect, but is not likely to adversely affect” any threatened or endangered species, and the Commission did not object to approval of the project. As in the previous application the Board does not believe it is right for the Board’s staff to make this determination when they have no knowledge of the project area or specialized knowledge of the wildlife or plants involved. The board members told the executive director to express the PRB’s concerns to the Commission and see what can be done for future consultations. The Board members wanted to make clear that they would like to have the consultation letters prepared by a biologist again as had been done for many years. Mr. Austin moved to approve PRB-4037. Chairman Hutchison seconded the motion. Mr. Liegl said he had the same concerns as with the previous application. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – no, and Mr. Moen – absent. The motion carried 3-1 with one absent.
The next item on the agenda was to consider a proposed guidance document. The draft Guidance Document 17 would address uncertainty created with the passage of LB 1370, now codified in 70-1012(2)(a) and 70-1014.02(2)(a)(vi)(A). The purpose of the proposed Guidance Document 17 would be to provide the PRB’s interpretation of the term “construction” regarding facilities within 10 miles of applicable military installations. The statutes require the owner of electric facilities to certify that the facilities “contain no materials, electronics or other components” manufactured by a foreign adversary designated in federal regulations. Executive Director Texel pointed out that the important distinction is that the term in the draft guidance is not limited to when a facility is first built. Rather “construction” in that limited context means any time materials, electronics or components are installed in or added to the facility. Unfortunately, the terms “materials or other components” are extremely broad, and capture just about anything a utility or developer would build or install in a facility. The PRB has historically interpreted the term “construction” in its existing statutes to mean when a new facility is initially built, after which the PRB retains no or extremely limited jurisdiction. The proposed guidance document would adhere to what is believed to be the intent of the senators that were the driving force behind the bill, and in what the Legislature appears to believe is needed to protect the interests of national security. The proposed guidance document was shared with the Nebraska Power Association, as well as lobbyists and attorneys that represent private developers operating in Nebraska. The private developers responded that they did not object to the draft. The NREA, NPPD and LES expressed concerns about the interpretation and asked the Board to withdraw the guidance document. John McClure, Nebraska Public Power District general counsel, provided an email to Board in which he expressed concerns with the PRB’s interpretation of the term construction and stated that under Nebraska caselaw and rules of statutory construction the term should be limited to when a facility is initially built. Ms. Sahling-Zart, Lincoln Electric System general counsel, sent an email in which she concurred with NPPD’s position and made similar arguments why the proposed document should not be adopted. James Dukesherer, Director of Government Relations for the Nebraska Rural Electric Association (NREA), addressed the Board. He said the NREA shared the concerns the other utilities expressed and offered an alternative idea. He said that the statutes allow utilities that meet the North American Electric Reliability Corporation’s (NERC) critical infrastructure protection (CIP) standards to be exempt from the certification requirement. He proposed allowing utilities to certify that they have required their vendors to certify that they do not use materials or components manufactured by the designated foreign adversaries. The Board members indicated that was a reasonable solution that should be considered by the Legislature next session, but they were concerned that the Board would be creating an exemption that is not provided for in state law. Michelle Lepin, general counsel for the Municipal Energy Agency of Nebraska (MEAN) spoke. She said during the legislative session when the provision dealing with military installations was being discussed MEAN and its members had understood the term “construction” to refer only to when a facility was built. She expressed concern that the word might now be interpreted differently. She urged the Board not to adopt the proposed guidance document interpreting the term “construction” much more broadly than initial construction. After discussion of the options, the Board decided the best option would be to seek an attorney general’s opinion seeking guidance whether the PRB’s interpretation of the term “construction” in the applicable statutes was allowable. The Board’s guidance to its staff is that the utilities have an independent duty to abide by the new restrictions for facilities near applicable military installations. Until the Attorney General’s opinion is issued, the Board will review and record the certifications the utilities and developers submit to the Board, but the Board will not audit or attempt to check if utilities are installing new equipment in existing facilities. Mr. Liegl moved to table the proposed Guidance Document 17 and instead have the Board request an attorney general’s opinion regarding the proper interpretation of the term “construction” in the context of the new provisions dealing with military installations. Vice Chairwoman Gottschalk seconded the motion. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – absent. The motion carried 4-0 with one absent.
The next agenda item was the executive director’s report. The first item is the Southwest Power Pool (SPP) update. The Board had a copy of JK Energy’s monthly activities report. Chairman Hutchison stated that a winter planning reserve margin of 36% for winter and 16% for the summer was passed by the SPP Board of Directors. The policy will now be submitted to the Federal Energy Regulatory Commission (FERC) for final approval.
Executive Director Texel stated that he has been in contact with the military to find out the list of Nebraska military facilities that are included under the definition of “military installation” in section 70-1001.01. He initially spoke with the Nebraska National Guard judge advocate’s office. Since then a Colonel with the U.S. Army Reserves said he had been assigned to coordinate with me on this issue. He last communicated with the Colonel on August 1. He is hoping that the military can provide a map showing what areas in Nebraska are within 10 miles of the military installations. This will help greatly when determining which utilities have to provide the necessary certifications and which ones are not within 10 miles of the applicable military installations.
The executive director Texel then reviewed the privately developed renewable generation facility (PDREGF) notices that have been received. Chairman Hutchison asked for a report on the number of PDREGF filing that have been filed with the PRB. On July 18 the new statutory language went into effect requiring a private developer to conduct public meetings in the county were a facility would be built, with at least one member of the developer’s board of directors to be present at the meeting, and a summary of the comments to be submitted to the Board. In June 2024 the Board received 10 PDREGF notices. There were 6 for wind and 4 for solar, for a total of 2,854.8 megawatts. In July there were 16 notices. The notices included 7 for wind and 9 for solar for a total of 3,975 MW. Prior to June 2024 the PRB received 8 notices in June of 2023, one in February 2023, and one in December 2022. Obviously, the developers wanted to have all known facilities submit their notices with the required certifications prior to the effective date of the new statutory provisions.
The executive director then updated the Board on its intervention in FERC docket EL24-110-000. The proceeding involves a dispute between the Eolian company and the Omaha Public Power District (OPPD) over whether OPPD is required to sign a generator interconnection agreement (GIA) with Eolian for several battery storage facilities Eolian wants to build in OPPD’s service area and interconnect to OPPD’s transmission system. SPP was uncertain how to proceed, so it filed a Petition for Declaratory Order with the Federal Energy Regulatory Commission (FERC), asking for directions on how to proceed. All motions and comments were due on June 20. Several other utilities and organizations filed motions to intervene and comments, including the NPPD and LES. At last months’ meeting the Board voted to request the Nebraska Attorney General to appoint Executive Director Texel as a special assistant attorney general to file a Motion to Intervene with comments. The attorney general made the appointment. Executive Director Texel is to coordinate with two personnel at the attorney general’s office, such as providing them with a copy of the intervention and comments prior to filing them with FERC. The filing included a copy of the PRB’s decision on OPPD’s energy storage resource (finding that the PRB has jurisdiction over ESRs under Nebraska law) and the 1996 attorney general’s opinion concluding that nothing in Nebraska law precluded a private entity from constructing a generation facility in Nebraska, subject to PRB approval. OPPD and Eolian filed a joint motion requesting additional time in which to negotiate. They filed a second motion for additional time with the deadline of August 23. The parties believe they are very close to an agreement.
The executive director gave a quick update on the special session. LB 1 initially would have taken the interest from most agencies’ cash funds and deposit the proceeds in the State’s general fund for use toward property tax relief. For the PRB this would have been around $10,000. This provision was eliminated and replaced with an amendment to only capture interest from cash funds that are specifically listed in the amendment. The PRB’s cash fund was not on the list.
The executive director then stated that in August the Board is required to do the annual performance review for him. In the past the Board has delegated the review to the Chairman, who solicits input from the other board members. A copy of the form to be filled out was in each Board member’s meeting notebook. Chairman Hutchison said he would complete this in the next week or so and asked if any Board member had comments to either e-mail him or call him. Chris Dibbern, the Public Advocate for natural gas issues before the Public Service Commission, addressed the Board and stated that she has worked with Mr. Texel for many years and expressed praise for his work.
Executive Director Texel stated that the next three PRB meetings are scheduled for September 20, October 18, and November 15, 2024.
Mr. Austin moved to adjourn the meeting. Mr. Liegl seconded the motion. Voting on the motion: Chairman Hutchison – yes, Vice Chairwoman Gottschalk – yes, Mr. Austin – yes, Mr. Liegl – yes, and Mr. Moen – absent. The motion carried 4 –0 with one absent. The meeting was adjourned at 2:25 p.m.
Timothy J. Texel
Executive Director and General Counsel
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