As of this writing, I am exactly four weeks into my tenure as president and CEO of the American Public Power Association. It is a great privilege to be representing service-oriented, community-focused public power utilities in this capacity. However, when I learned during my second week that the topic for my first Public Power Magazine editorial was climate change, I realized there would be no honeymoon period. So, here goes.
It was clear to me during my previous 15-year tenure at APPA that our industry was in an extended era of change, and my four years away have only heightened that perspective. This evolution of our industry has come with a significant increase in complexity, bringing to mind the game Whac-A-Mole. For example, as we have added digital technology to enhance grid operations, improve efficiency, and integrate intermittent renewable generation, we have opened the Pandora’s box of cybersecurity risk that must be expertly managed now and into the future.
The Whac-A-Mole comparison is even more apt when discussing the industry’s need to respond to climate change risk. As we have begun to move away from coal as a key power generation source, we have significantly reduced greenhouse gas emissions but have had to reevaluate our reliability and resilience posture. For example, coal can be stockpiled on-site at a power plant, while in many areas natural gas cannot be stored. This has created the need for the industry to better understand natural gas-electric interdependencies. In deploying cleaner resources such as wind, we have had to address unintended consequences like migratory bird impacts and the need for new transmission pathways. As we increase use of distributed generation resources, typically intermittent renewable generation like solar, we must deploy very granular digital technology to integrate such resources while maintaining electric reliability — which, again, raises cybersecurity risk.
In pointing out this increasing complexity, I am not complaining, nor are public power utilities. Rather, as we continue to significantly reduce GHG emissions in our industry (and as we increasingly help the transportation sector electrify), I am encouraging an eyes-wide-open approach to the benefits and costs. This approach will enable us to optimize our resource mix and infrastructure over time so that all the moles are eventually whacked, and, ultimately, our customers benefit from a continued supply of safe, reliable, affordable, and very clean electricity. The public power utilities featured throughout this issue can attest to the complexity of taking this approach to everything from making changes to their resource mix to hardening other infrastructure and assets and reporting sustainability efforts to their communities.
As an association, like our members, we have not rested on our laurels as policymakers and regulators have grappled with how to tackle the complex climate change issue. The following is an excerpt from the preamble to APPA’s revised climate change policy resolution, to be considered by our members on Feb. 25, 2020. It explains our climate policy development and decision-making over the last 14 years and how the legislative and regulatory landscapes have evolved during that timeframe. It is worth the read, and I sincerely hope that the membership will have approved the entire resolution with the resolved clauses by the time this is published. If it has, then I encourage you to read both the preamble and the resolved clauses on our website at www.PublicPower.org/Policy-Resolutions.
“The American Public Power Association (APPA) supports congressional action to address climate change. In 2006, APPA formed the CEO Climate Change Task Force to assist the association in developing its climate change policy. For the last 14 years, the task force (now called the CEO Climate Change & Generation Policy Task Force) has played a key role in the development of APPA’s policy positions on federal climate change legislation and Environmental Protection Agency (EPA) regulations.
Following the U.S. Supreme Court’s 2007 decision in Massachusetts v. Environmental Protection Agency, which held that EPA has the authority to regulate tailpipe emissions of greenhouse gases (GHGs) under the Clean Air Act, legislative activity on climate-related issues increased significantly. In 2007, Congress approved legislation to direct EPA to publish a rule requiring the public reporting of GHG emissions from large sources. Less than two years later, in 2009, the House of Representatives approved the Waxman-Markey bill to create a cap and trade program. When the Senate failed to pass its own climate bill in 2010, activity on climate change issues shifted to EPA, with the agency issuing the Clean Power Plan (CPP) in 2015 to regulate GHG emissions from fossil fuel-fired power plants. The CPP was appealed, and the U.S. Supreme Court eventually stayed its effectiveness. In 2019, EPA repealed the CPP and replaced it with the Affordable Clean Energy (ACE) rule. The ACE rule has now been appealed as well. These events have created substantial and ongoing policy uncertainty for electric utilities, including public power utilities.
Congressional interest in addressing climate change continues to increase. Following the November 2018 congressional elections, where Democrats won back the majority in the House of Representatives, Democratic leadership has made addressing climate change a top priority for House Democrats in the 116th Congress. The Speaker of the House reinstated the Select Committee on Climate Change (now called the Select Committee on the Climate Crisis) and more than two dozen hearings were held in 2019 on the issue. In late July 2019, the leadership of the House Energy & Commerce Committee announced its intention to begin drafting comprehensive climate change legislation to get the United States to net-zero emissions by 2050. Republicans on the House Energy & Commerce Committee expressed their belief that climate change is real and needs to be addressed, as well as their willingness to work with the majority on addressing climate issues through the promotion of energy innovation. In January 2020, House Energy & Commerce Committee Democrats released draft climate legislation.
In the 116th Congress, the Senate has also examined climate change issues in the Energy & Natural Resources Committee and Environment & Public Works Committee. Multiple hearings were held in those committees and legislation was approved to promote carbon capture and sequestration technologies. Key Republicans have expressed their concerns on the impacts of climate change and their desire to promote energy policies that will help reduce emissions and promote non-emitting resources, including research and development of needed technologies. Senior Senate Democrats continue to stress the importance of addressing climate issues, noting it is one of their top legislative priorities.
Public power utilities have already taken actions to reduce their carbon dioxide (CO2) emissions in response to changes in the economics of power supply resources, energy markets, and customer requests. They will continue to reduce their emissions. APPA members are undertaking a variety of approaches to reducing not only emissions from their generation, but also from their utility buildings and vehicle fleets. Further, many have adopted innovative energy efficiency programs to help their customers reduce their power usage. Many are also actively working in their communities to promote the electrification of the transportation sector, including deploying charging infrastructure, offering rebates for EVs, and developing special rate structures to incent off-peak charging. Others have developed policies to enable the interconnection of distributed energy resources (DERs) owned by utility customers and to purchase excess power generated by DERs.
For all of these reasons, the likelihood of climate change legislation moving in Congress in the next several years is increasing. APPA believes it is important that any such legislation is economy-wide, sets clear targets, and provides maximum flexibility to covered entities. For the electric sector, it is imperative that climate change legislation allows the sector to reduce emissions while also maintaining a reliable grid and affordable retail rates.”