During the ninety-fourth Legislature of Nebraska, second session,
Legislative Resolution 455 (L.R. 455) was approved as follows: LEGISLATIVE RESOLUTION 455. Introduced by Beutler. PURPOSE: To study the electric utility industry in Nebraska. An advisory
group of interested parties will be convened to assist the Natural Resources
Committee of the Legislature in conducting a study which may include a review
of: (1) The issues related to competition and restructuring in the electric
industry, and consideration of the factors that will provide a framework for
such review, including, for example, electric system reliability, long-term
system efficiency and power generation planning, rates, terms, and conditions
of electric service, retail service areas, universal service and obligation to
serve, general customer service, effects on different customer classes,
comparability of service, fair, reasonable, nondiscriminatory rates,
market-based pricing of services, coordination among services, effects of
various legal requirements, tax structures, and financing structures on price,
service, revenue bonds, and debt ratings, recovery of stranded investments and
other transition costs, principles of public power, energy efficiency, fuel
diversity, the role of renewable energy development in an environment of
market-based pricing of electric service, environmental and social issues,
maintaining a highly skilled work force, barriers to competition and open
access, technology development, and encouraging the retention and growth of
business in Nebraska; (2) The possible effects in Nebraska of industry restructuring activities
in other states and recent federal legislative and regulatory actions such as
S. 1526 that is pending in the U.S. Senate and the Federal Energy Regulatory
Commission rulemaking and decisions implementing the Energy Policy Act of
1992; and (3) The regulatory jurisdictional issues addressed by utility boards of
directors, and Nebraska Power Review Board, and other state level regulatory
entities, federal power marketing administrations, such as the Western Area
Power Administration, including legal requirements, contracts, and power
allocations under such administrations, regional transmission groups, the
federal Nuclear Regulatory Commission, and the Federal Energy Regulatory
Commission, including the extent of federal regulatory jurisdiction in
Nebraska. NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE NINETY-FOURTH
LEGISLATURE OF NEBRASKA, SECOND SESSION: 1.That the Natural Resources Committee of the Legislature shall be
designated to conduct an interim study to carry out the purposes of this
resolution. 2.That the committee shall upon the conclusion of its study make a
report of its findings, together with its recommendations, to the Legislative
Council or Legislature. The Natural Resources Committee has determined that L.R. 455 should be
carried out in two phases as follows: A. L.R. 455 - Phase I Work Plan 1. Task: Conduct a study of the current consumer-owned electric utility industry in
Nebraska. 2. Purpose: To provide a comprehensive overview of the organization, structure,
governance, regulation, and effectiveness of the consumer-owned electric
utility industry in Nebraska. 3. Responsibility: a. An independent project manager will be retained for the Phase I project
and will head up a working task force. The project manager will have overall
control and responsibility for performance of the work, keeping the study on
schedule, ensuring all issues are covered, assigning work, coordinating with
the facilitator, and bringing the study to completion with a written report.
The project manager will be accountable to and report to the Natural Resources
Committee of the Nebraska Legislature. b.An independent facilitator will be retained for the Phase I project. The
facilitator will serve as the interface between the task force and the
advisory group, will lead discussion of issues in the advisory group, and
facilitate meetings of the task force and advisory group. Since it is
anticipated that the same advisory group will serve in both Phase I and II of
the L.R. 455 study, it is critical that the advisory group have a
comprehensive understanding of the electric utility industry in Nebraska at
the completion of Phase I. This broad base of knowledge will be essential when
the advisory group deals with the change issues that will be prominent in
Phase II. The facilitator will have the responsibility of ensuring that the
advisory group acquires this broad base of knowledge during the Phase I
activities. The facilitator will be a member of the task force and will be
accountable to and report to the Natural Resources Committee. c.In addition to the project manager and facilitator, the task force will
include up to six representatives as designated by the Nebraska Power
Association (NPA). Because of their familiarity with the electric utility
industry in Nebraska, the NPA representatives, with the assistance of the NPA
subcommittees, will perform the bulk of the data gathering and analyses for
the Phase I project. The task force, collectively with the individuals
assigned to the task force, will be accountable to and report to the project
manager for the performance of their respective work assignments. d.The task force will have the responsibility to develop a work plan,
schedule and RFP for project manager and facilitator for the Phase II work to
be approved by the Natural Resources Committee. The Phase II activities are
expected to commence about July 1, 1997. An overview of the Phase II work is
attached. e.An advisory group comprised of approximately 30 interested parties,
including representatives of electric consumer groups in Nebraska, will be
utilized to provide input on specific issues throughout the study process as
requested by the task force or the Natural Resources Committee. All
recommendations from the advisory group will be considered but will be
non-binding on the task force. The Natural Resources Committee will have final
authority on which recommendations will be pursued. 4. Deliverables/Schedule: a.The Phase I project will commence about August 26, 1996. b.The project manager will submit written progress reports to the Natural
Resources Committee and the President of the NPA with the first report
submitted October 1, 1996, and subsequent reports every two months thereafter.
c.The project manager will submit a preliminary final draft report to the
Natural Resources Committee and the President of the NPA by July 1, 1997. d.The entire task force will be expected to participate in public hearings
as requested by the Natural Resources Committee. e.The project manager will submit a final report, complete with supporting
data, to the Natural Resources Committee and the President of NPA by December
31, 1997. f.The project manager shall submit the work plan, schedule and RFP for the
Phase II project as developed by the task force to the Natural Resources
Committee by June 1, 1997. 5. Budget/Billing: a.The Phase I activities will be funded by the NPA. b.All billings for project manager and facilitator services and expenses,
as well as incidental expenses of the task force and advisory group will be
submitted by the project manager on a monthly basis to Mr. Nate Donovan, c/o
Natural Resources Committee, for review and comparison to work completed to
date. Upon completion of his review, Mr. Donovan will submit the billings to
the Treasurer of NPA, who will review the appropriateness of the charges and
conformance to budget, and arrange for payment within 20 days of NPA's receipt
of the billings. c.Billing disputes will be resolved by the project manager, Mr. Donovan,
and the President of NPA. 6. Listing of issues anticipated to be considered in Phase I of the L.R.
455 Study*: 1.Public policy 9.Retail service areas 23.Indebtedness * This listing is not meant to be all inclusive. B. L.R. 455 - Phase II Overview 1. Task: Conduct a study of the emerging issues of competition and restructuring in
the electric industry and analyze the possible effects of these issues on the
consumer-owned electric utility industry in Nebraska. 2. Purpose: To provide a comprehensive overview of the completed and anticipated
developments in wholesale and retail electric competition, including FERC
activity, utility mergers, PUC and legislative activities in other states,
federal regulatory and congressional initiatives; and an evaluation of the
potential effects of these developments on the consumer-owned electric utility
industry in Nebraska. 3. Responsibility: A task force designated by the Natural Resources Committee and the Nebraska
Power Association. 4. Resources: An advisory group comprised of approximately 30 interested parties,
including representatives of electric consumer groups in Nebraska, will be
utilized to provide input on specific issues throughout the study process as
requested by the task force or the Natural Resources Committee. All
recommendations from the advisory group will be considered but will be
non-binding on the task force. The Natural Resources Committee will have final
authority on which recommendations will be pursued. 5. Output/Timetable: a. Anticipated start date - July 1, 1997. b. Preliminary draft report for public comment - July 1, 1999. c. Final report to Legislature - December 31, 1999. 6. Issues for Consideration: * *This listing is not meant to be all inclusive. III. General
Aspects of the Studies The Natural Resources Committee has determined that L.R. 455 should be
carried out in two phases as follows: A. Principles The following set of principles shall initially guide the discussion of
issues included in the L.R. 455 - Phase I and II studies. 1. The State of Nebraska should ensure that customers' electric service
needs are met at a price that is fair, just and reasonable. 2. Public policy goals of availability, affordability, reliability,
efficiency, quality, safety, economic development, and environmental
protection must be maintained or enhanced. 3. The principal benefits and elements of public power, including low costs
and local control, should be preserved. 4. The benefits of integrated resources planning, including demand-side
management, conservation and renewable resources should be preserved. 5. Public power's environmental, financial and contractual commitments
represent electric consumer-owned assets and should be honored. 6. All electric suppliers should have the flexibility to offer products,
services, prices, terms and conditions that meet unique and diverse customer
needs. 7. The results of any restructuring should ensure that facilities are not
duplicated, all customers have access to electricity at fair and reasonable
prices, and that consumer protection is maintained. 8. All suppliers of electricity to Nebraska consumers should be subject to
fair and consistent laws, rules and regulations, including public access to
pertinent information. 9. If retail competition is allowed in Nebraska, all electric suppliers
should have the authority to conduct retail electric operations and provide
products and services outside of Nebraska. 10. Any changes to the electric utility structure must provide for a
transition period which will allow changes to occur in a responsible and
rational manner. There is no intent expressed by the Natural Resources Committee nor should
there be any expectations by the participants in the studies that introduction
of legislation relating to electric utilities will be precluded during the
pendancy of the L.R. 455 Phase I and II studies. In fact, legislative debate
can be an important part of shaping public policy changes which may occur as a
result of these studies. Notwithstanding the above caveat, it is expected that
the primary legislative responses to industry restructuring and the changing
electric utility environment will await the results of these studies. C. Structure
of Phase II Study The Natural Resources Committee and the study participants understand that
the structure of the Phase II study may change from that outlined in this
document depending upon experience gained prior to commencement of the Phase
II study. IV. Request
for Professional Services The Natural Resources Committee is requesting proposals for the Phase I
independent project manager and independent facilitator positions. A schematic
of the structure to be utilized for the L.R. 455 study follows: A. Structure - L.R. 455 - Phase I and
II OversightNatural Resources ------------------------------------------------------------------------ ConsultantAdvisory Group 1. The independent project manager shall be a seasoned individual with
experience in managing large projects and divergent views. 2. The independent facilitator shall be: a. a seasoned individual with strong communication skills; b. experienced in facilitating discussions of small and large groups of
individuals representing diverse interests and opinions; c. able to close and effectively summarize group discussions, and d. able to educate a large and diverse advisory group on legal, financial,
economic, engineering, public policy and technical issues. 3. The project manager and the facilitator shall not be the same
individual. 1. Project Manager - it is estimated that the Project Manager will have to
devote between 800 and 1,000 hours to effectively carry out the Phase I
activities. 2. Facilitator - it is estimated that the Facilitator will have to devote
approximately 500 hours to effectively carry out the Phase I activities. All costs of secretarial and staff support, and all costs of printing and
distribution of communications and reports required by the Project Manager and
Facilitator for Phase I, shall be included in the cost proposal submitted by
project manager respondents. E. Proposal Format/Requirements 1. Respondents shall submit a resume of their work experience as it relates
to the Phase I work. References shall also be provided. 2. Respondents shall submit a written summation of their understanding of
the Phase I work. 3. Respondents shall submit an outline of their approach to carrying out
the Phase I activities. 4. Respondents shall submit a fee proposal for the Phase I work in the
following form: a. An hourly rate with a not to exceed amount. b. A not to exceed out of pocket expense amount. c. A not to exceed administrative support amount (project manager proposals
only). Costs of Proposing - Respondents will bear all costs of preparing the
proposal and participating in oral presentations. No expenses or fees incurred
prior to project initiation will be reimbursed or paid. 1. Each respondent shall submit two copies of their proposal to Mr. Nate
Donovan, c/o Natural Resources Committee, District 28 State Capitol, Lincoln,
Nebraska 68509-4604. 2. Proposals must be received no later than July 26, 1996 for the
independent facilitator and August 16, 1996 for the project manager in order
to be considered. 3. The successful bidders' proposals and this Request for Proposals will
serve as the contract document. H. Award of Contracts Award of Contracts - Contracts were awarded on August 23, 1996. I. Lack of Obligation Lack of Obligation - The Natural Resources Committee reserves the right to
reject any and all proposals. J. Termination Termination - The Natural Resources Committee reserves the right to
terminate the project manager and/or the facilitator work, without cause at
any time. In the event of such termination, the terminated party shall be
entitled to receive compensation for services rendered and expenses incurred
up to the date of such termination. For questions regarding this RFP, please contact: Mr. Nate Donovan
2.History of public power
3.Principles of public
power
4.Statutory regimes governing consumer-owned utilities
5.Electric
utility organizations
6.Electric utility structures
7.Governance
8.Regulatory and jurisdictional roles
10.Obligation to serve and
universal service
11.Fair, reasonable and non-discriminatory rates
12.Rates, terms and conditions of service
13.Electric facilities
14.Fuel diversity
15.Integrated resources planning
16.Conservation
and renewables
17.Energy efficiency
18.State industry performance
19.System reliability
20.System efficiency
21.Technology development
22.Revenue transfer policies
24.Bond resolutions
25.Credit
ratings
26.Sources of capital
27.Work force
28.Federal legislative
and regulatory actions
29.FERC rulemaking and decisions
30.Industry
restructuring in other states
31.Potential stranded assets
32.Transition from a regulated environment
Committee MembersTask
ForcesPhase I
Project ManagerFacilitatorNebraska Power Assn. Phase
II
Project Manager FacilitatorNebraska Power Assn.IPP's/NUG's, etc.
Legislative Research DivisionLegal Counsel Bond
CounselEngineeringFinanceEconomist
(Advisory Only)Advisory
Group
(35)
c/o Natural Resources Committee
District 28, State
Capitol
Lincoln, NE 68509-4604
Phone: (402) 471-2633
Fax: (402)
479-0928