Utilities decry proposal to appoint, rather than elect, board members

LINCOLN — A proposal to have the governor appoint the majority of board members for the state’s two largest public utilities — instead of having them elected by voters — would “take the ‘public’ out of public power,” a legislative committee was told Thursday.

“One of the founding principles of public power is that citizens own the utility and citizens have the power to run the utility,” said Neal Suess, the president and CEO of the Columbus-based Loup Public Power District. 

He was joined by representatives of the Omaha Public Power District and Nebraska Public Power District, as well as officials with the League of Women Voters and the Sierra Club, in testifying against a proposal by State Sen. Bruce Bostelman of Brainard.

Under Bostelman’s Legislative Bill 1046, the governor would appoint five of nine members of the OPPD and NPPD boards. The governor would also appoint the CEOs of those two public utilities. Right now, all members of those two boards are elected, and the governing boards select who will run the utilities.

Not an ‘out-of-the-box’ idea

Bostelman said he introduced the bill because being a utility board member is a complex job that’s getting more complicated because of the broader mix of energy sources today, and the governor would be able to select board members with “working knowledge” of the energy industry.

“This isn’t a completely out-of-the-box idea,” the senator said. About 30% of all public power board members are appointed, Bostelman said. One is the Lincoln Electric System, whose board members are appointed by the Lincoln mayor.

No one testified in support of LB 1046, and 89 letters of opposition were also submitted.

Critics told the Legislature’s Natural Resources Committee that there was no need to make changes and that elected board members are working just fine. Nebraska has some of the lowest utility rates in the country and the third-most reliable electric grid, according to U.S. News and World Report.

Having the governor make such appointments, opponents said, would inject more politics into the boards, would dilute their responsiveness to customers and could even damage a utility’s credit rating, adding millions of dollars in interest payments on loans.

“This bill would be an enormous erosion of local control,” said Javier Fernandez, president and CEO of OPPD. 

“Who would the CEO be responsive to?” he asked, local ratepayers or the governor.

A recipe for confusion

“This is a recipe for confusion and conflict,” said Tom Kent, the president and CEO of NPPD.

In addition, opponents said Bostelman’s bill didn’t spell out that appointed board members had to have experience in power generation.

At least two people who testified “neutral” on the bill — including former State Sen. Ed Schrock of Holdrege, now an elected member of the NPPD board — said there would be merit in making some changes. And North Platte Sen. Mike Groene expressed concerns that current board members were moving too quickly to adopt “carbon-free” goals. Both the NPPD and OPPD boards have set goals of generating electricity carbon-free by 2050.

Schrock, along with Darin Bloomquist, general manager of the Nebraska Electric Generation & Transmission Cooperative, complained that out-of-state interest groups are pouring big money into NPPD and OPPD races, injecting more partisan politics into them.

“It’s nearly impossible to compete with their money,” Bloomquist said. “We’re venturing into unknown territory.”

One group, Nebraskans for Common Ground, contributed a total of $90,000 to three candidates for the NPPD board in 2020. One of those candidates, Aaron Troester of O’Neill, won after outspending incumbent Barry DeKay by about $30,000. 

Two other candidates backed by Nebraskans for Common Ground spent less. Sheila Hubbard of York spent about $18,000 but lost to Wayne E. Williams, who spent about $1,300 less. Incumbent Mary Harding of Plattsmouth spent $49,000 in defeating Todd Calfee, who spent about $9,500.

In 2020, Nebraskans for Common Ground was financed primarily by the Washington, D.C.-based League of Conservation Voters, which gave the group $500,000.