Bonds and Financing

APPA voices support for bill’s smart infrastructure investment provisions

The American Public Power Association on June 29 said it strongly supports the smart infrastructure investment provisions that are in H.R. 2, the Moving Forward Act.

House Speaker Nancy Pelosi, D-CA, on Jun 18 announced additional details on Democrats’ comprehensive infrastructure package, the Moving America Forward Act, which includes several items of importance to public power.

“While the nation continues to respond to the unprecedented effects of the COVID-19 pandemic, we must begin to look to the future with comprehensive legislation to refine, restore, and expand American infrastructure, including our electric infrastructure. These are the investments that make commerce possible — leading to strong communities,” APPA said in a news release.
APPA said it strongly supports provisions in H.R. 2 that will make it easier and less costly to finance these critical investments.

These include reinstating the ability for state and local governments, including public power utilities, to issue tax-exempt advance refunding bonds and increasing the small issuer exception from $10 million to $30 million, APPA noted.

The former would make it easier to lock in low interest rates by refinancing existing debt as proposed under H.R. 2772, the Investing in Our Communities Act, and the latter would encourage banks -- primarily local banks -- to finance capital investments by smaller issuers, as proposed under H.R. 3967, the Municipal Bond Market Support Act. “Considering that roughly 1,300 of the nation’s 2,000 public power utilities have 10 or fewer employees, this change will be incredibly helpful,” APPA said.
APPA also support the decision to allow the issuance of taxable direct payment bonds and believes that protecting payments to issuers of such bonds from budget sequestration is the correct approach that would only be improved by extending that protection to existing direct payment bonds. Since 2013, budget sequestration has cut payments to direct payment bond issuers by more than $2 billion.
APPA also backs the decision to include in H.R. 2 provisions of the Growing Renewable Energy and Efficiency Now (GREEN) Act for ensuring that all utilities can benefit from incentives intended to encourage critical energy investments. Current tax-based incentives exclude the nearly 90 million Americans served by tax-exempt electric utilities, including public power utilities, the public power group pointed out.

“The GREEN Act would mean that all – not just some – utilities can directly benefit from energy tax incentives. This will make these incentives fairer and more effective,” APPA said.
APPA said also supports inclusion of provisions from H.R. 2616, the Clean Corridors Act, which would establish a grant program for the deployment of electric vehicle charge infrastructure. These grants would be broadly available to public power utilities.

Additionally, public power utilities would be eligible to participate in a proposed energy storage demonstration program at the Department of Energy.
“APPA firmly believes that H.R. 2 is substantially strengthened by drawing on preexisting, bipartisan legislation pertaining to bond modernization, fair renewable energy incentives, and electric vehicle deployment,” it said.