Bonds and Financing

Leave tax-exempt bond financing alone

Hundreds of public power officials recently fanned out across Capitol Hill to underscore the vital importance of tax-exempt financing for public power utilities.

Our overriding message to Congress? When it comes to tax reform, Congress should leave municipal bonds alone.

The message was delivered by public power officials from across the country who gathered in the nation's capital for the American Public Power Association's 2017 legislative rally, which ran from Feb. 27 to March 1.

Before members headed off to Washington, DC, Association President and CEO Sue Kelly used her blog to offer a preview of rally activities and detail Association priorities for 2017.

At the rally, the Association approved several new policy resolutions including one that calls for the preservation of municipal bond financing. Tax-exempt municipal bonds are critical to power system infrastructure investments and the Association will continue to oppose any efforts to tax interest paid on these bonds.

This is a key issue for us, probably the number one issue that we will be pursuing on Capitol Hill during our legislative rally," Kelly said at a briefing for reporters at the rally on Feb. 28.

"Obviously as units of state and local government, our members use municipal bonds to support and to finance the building of new infrastructure at reasonable rates," Kelly noted.

"It's very important to us that we have continued access to this financing tool as we have for many, many years," Kelly remarked.

"We want to make very clear to our congressmen and senators as we go up to the Hill that tax-exempt financing is very, very key to not only us as public power systems, but to all state and local governments," she said. With respect to tax reform, the Association is asking that lawmakers "not touch municipal bonds."

At a later point, she noted that as Association members visited congressional offices they were seeking co-signatories to a letter circulating on Capitol Hill that emphasizing that tax-exempt bonds are a very important financing tool and should not be disturbed in any tax reform.

The bipartisan letter from Reps. Randy Hultgren, R-Ill. and C.A. Dutch Ruppersberger, D-Md. was sent to the leadership of the House Ways and Means Committee on March 8. The letter had a total of 156 signatures.

Kelly also noted that there is a Municipal Finance Caucus that has been formed by Hultgren and Ruppersberger "and we are trying to get other members of the House to join that caucus."

Laura Marshall Schepis, the Association's senior vice president, advocacy and communications, said at the press briefing that with more than 600 public power advocates visiting congressional offices, "many dozens of Members of Congress are going to be reminded of stories from their districts about the power of municipal bonds to strengthen communities and create jobs."

Other resolutions approved

Other resolutions approved at the rally addressed the Endangered Species Act, the Federal Power Act and pole attachments.

The resolutions, which are determined by members and guide the Association's policy positions, were approved by the Association's Legislative & Resolutions Committee.

With respect to the Federal Power Act, the Association is calling on Congress to examine the administration of the act and how environmental policies and technological changes in power generation and delivery are impacting the federal/state role set out by the act.

In terms of the Endangered Species Act, the Association supports Congress's efforts to protect endangered species while ensuring responsible land, resource and water management, but feels that the law is due for Congressional review after more than 25 years to make it workable for all stakeholders.

When it comes to pole attachments, the Association is urging Congress to preserve the federal law giving public power utilities local control over pole attachments and to exempt them from related Federal Communications Commission rules and regulations.

Association priorities in 2017

Meanwhile, Desmarie Waterhouse, the Association's vice president of government relations and counsel, at the press briefing provided an overview of the Association's priority issues for 2017.

Along with maintaining tax-exempt financing, the Association is focused on preserving the federal power program, protecting against a one-size-fits-all approach to distributed generation, supporting common sense environmental regulatory reforms and maintaining and strengthening industry-government partnerships in the area of grid security.

Members make effective use of social media tools

At the rally, as well as during their trips to Capitol Hill, Association members made effective use of various social media tools.

For example, several members used Twitter to post photos from their visits to congressional offices and included the #PublicPower hashtag to get the word out.

Check out the following link for a roundup of rally-related Twitter activity:

Some members also leveraged their presence on Facebook and Instagram to highlight their activities while at the rally and on Capitol Hill.

Inhofe receives Association's Public Service Award

In other rally-related news, the Association on March 1 presented its Public Service Award to Sen. Jim Inhofe, R-Oklahoma.

The Association noted that during his tenure in the Senate and as leader of the Environment and Public Works Committee Inhofe has focused on issues affecting public power utilities.

He has been particularly vigilant on regulatory overreach by the Environmental Protection Agency and sensitive to the impact on public power utilities, the Association said in a March 1 news release.

Inhofe was also instrumental in introducing the Public Power Risk Management Act, which provides relief for public power utilities that enter commodity swaps to manage risks from fuel and power price fluctuations, the Association noted."