APPA has made progress on priorities, Crisson tells National Conference
Originally published June 18, 2013
NASHVILLE, TENN.—APPA has made progress recently on a number of its priority issues, including environmental regulation, cybersecurity and reliability, and the mandatory capacity markets run by regional transmission organizations, APPA President and CEO Mark Crisson told attendees of the association’s 2013 National Conference here yesterday. APPA also has stepped up its efforts to assist members with key operational issues, such as local governance, communicating with customers and reliable service, he said.
"Due to the persistent efforts of APPA and many of its members," the Environmental Protection Agency took the unusual step of reproposing a final rule limiting reciprocating internal combustion engine (RICE) emissions, Crisson said. In the new final rule, EPA "incorporated many of our recommendations," including an increase in the number of hours (from 15 to 100) that unmodified units may be run each year for emergency demand response, he said.
In another positive development, EPA listened to industry input about its cooling water intake rule under Section 316 (b) of the Clean Water Act, he said. The regulation reflects industry recommendations that the rule be flexible enough to deal with plant requirements on a case-by-case basis, Crisson told conference attendees.
|APPA is encouraged about EPA’s New Source Performance Standards for greenhouse gases, Crisson said, because agency officials have confirmed that states will have a major role in setting standards for existing coal-fired plants. Photo by Peyton Hoge
APPA is encouraged about EPA’s New Source Performance Standards for greenhouse gases, he said. At a recent meeting with APPA, EPA officials confirmed that they recognize that the individual states are given a major role in setting appropriate standards for existing coal plants under Section 111(d) of the Clean Air Act, he said. "That significantly increases the likelihood that the rules will be workable for most of our members," Crisson said.
On one public power business model issue, preference access to federal hydro power, APPA has seen a positive development with the release of the final report of the Joint Outreach Team, an Energy Department task force on strategic changes to the Western Area Power Administration, Crisson said. The report did not address some of the more controversial proposals in Energy Secretary Steven Chu’s March 16, 2012 memo on changes to the federal power marketing administrations, such as implementation of an energy imbalance market in the West. The report’s final recommendations "were substantially improved in both tone and substance," he said.
On tax-exempt financing, APPA continues to work closely with the Transmission Access Policy Study Group (TAPS) and Large Public Power Council, together with other major municipal financing constituencies such as the Conference of Mayors and National Governors Association, Crisson said. "We were able to make it through the lame duck session of Congress with no change to tax-exempt financing, which was a positive development," he said. Also, to date more than 70 House members have signed on to a resolution (H.R. 112) in support of tax-exempt financing, sponsored by Reps. Lee Terry, R-Neb., and Richard Neale, D-Mass. More work needs to be done on this issue, "but we have made a good start educating Congress on the benefits of tax-exempt financing and the need to preserve it," Crisson said.
Turning to another priority, new generation and transmission, Crisson said two hydro power bills have passed the House and the Senate Energy and Natural Resources Committee. The bills, which would significantly streamline the licensing process for small projects on existing facilities, are modest steps, but they represent real progress on hydro and help set the stage for addressing more difficult issues, e.g. mandatory conditioning of relicensing provisions for hydro projects, he said.
APPA has made progress on swap regulations under the Dodd-Frank Act, Crisson said. Public power is caught up in a special entity provision in a Commodity Futures Trading Commission rule that effectively limits the number of counterparties that will conduct swaps with us, he said. However, the House passed—by 423-0—the Public Power Risk Management Act, which would resolve the problem by creating an end user exemption for public power systems for energy transactions, he said. Passage of the Public Power Risk Management Act "was a pretty significant accomplishment," he said.
On another Dodd-Frank issue, we succeeded in gaining an exemption from the requirements of Section 201(f) for all power transactions between customer-owned utilities that are not speculative in nature, thereby avoiding significant recordkeeping and reporting requirements, he said. "That was a very positive development."
In the area of cybersecurity, APPA has provided leadership in an industry coalition that has argued persuasively for balanced legislation that recognizes that our industry is the only one already subject to mandatory cybersecurity standards, Crisson said. That argument "has started to resonate with Congress," and in April the House passed CISPA, the Cyber Information Sharing and Protection Act, which is based on voluntary information sharing, he said.
In the area of incident prevention and response, "we are working with the Department of Energy, the Department of Homeland Security, North American Electric Reliability Corp., and our industry counterparts to form a new, more muscular Energy Subsector Coordinating Council that will improve government-industry coordination during national disasters, whether cyber or physical in nature," he said.
Mandatory capacity markets in regional transmission organization regions, particularly PJM, "have been a disaster for customers," adding billions to power bills with very little new capacity to show for it, he said. The situation was made even worse when the Federal Energy Regulatory Commission approved a minimum offer price rule that significantly undermined the ability to self-supply by increasing public power utilities' risk of having to pay twice for capacity, he said. But last month FERC approved a settlement that restored the self-supply exemption in PJM, he said. And in a separate action in a different region, FERC declined to approve a proposed mandatory capacity market in the Midcontinent Independent System Operator, citing arguments made by APPA in our filing in opposition to the proposal.
Shifting gears, Crisson outlined what APPA is doing to keep public power’s business model sound, strong and sustainable.
Local control and governance is "our greatest strength, except when it’s not—then it can be our greatest weakness," Crisson told conference attendees. To prepare and strengthen governing bodies, APPA is offering a certification course for policymakers that can be taken in the classroom, online, a combination of both, or in-house, he said. APPA has also updated its Model City Charter, a succinct five-page document that explains how to best structure, govern and operate a public power system, he said.
To help members communicate the advantages of public power, APPA last year launched its Pride in Public Power initiatives with the Pride in Public Power video, which explains the advantages of public power, Crisson said. The initiative has now expanded to include such things as ads and customer information pieces on a variety of topics: local control, the value of public power, economic development, and new industry technologies. These resources can be accessed on APPA’s website at publicpower.org/pride, he said.
APPA continues to expand its reliability initiatives, Crisson said. The association has made its Reliable Public Power Provider (RP3) program more user-friendly and its eReliability Tracker provides an easy way to track your reliability metrics and to identify areas for improvement, he said. In the wake of Superstorm Sandy, at the request of our members, we are creating a more robust centralized mutual aid presence at APPA by establishing a mutual aid list serve and forming a nationwide public power mutual aid task force, he said. Crisson also introduced a new APPA video honoring the public power utilities and crews that responded to Superstorm Sandy.
The value of APPA membership "has never been higher, and I think our current membership numbers would bear that out: today we are at over 1,750 members, the highest in our 73-year history," Crisson said.
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