Electricity Markets

Infrastructure Bill Excludes Provisions Encouraging Sale Of Public Utilities

The Infrastructure Investment and Jobs Act includes a number of provisions of importance to public power utilities including in areas related to cybersecurity and electric vehicle infrastructure. At the same time, it does not incorporate provisions encouraging the sale of public utilities and other revenue generating assets as a way to fund additional infrastructure investments.

The Senate on August 1 began debate on the legislative text, called the Infrastructure Investment and Jobs Act, of an infrastructure framework negotiated over the last several weeks between 22 Democratic and Republican senators.

An initial draft of the senators’ Bipartisan Infrastructure Framework had listed so-called asset recycling as an area of agreement, and opposition to this proposal was a top priority for the American Public Power Association (APPA). Joy Ditto, President and CEO of APPA, on July 14 wrote to President Joseph Biden in opposition to using infrastructure funding legislation to encourage the privatization of public facilities.

The text of the agreement does not incorporate provisions encouraging the sale of public utilities and other revenue generating assets as a way to fund additional infrastructure investments.

Details On Infrastructure Investment and Jobs Act

A section of the bill establishes a grant program at the Department of Transportation to provide grants to eligible entities, including public power, for the deployment of electric, hydrogen, propane, or natural gas vehicle infrastructure along designated Alternative Fuel Corridors. Entities are required to contract with a private entity for the acquisition and installation of fueling infrastructure and may use a portion of grant funds to pay a private entity to operate and maintain the infrastructure for up to five years and/or to enter into a cost-sharing agreement with the private entity.

Fifty percent of the overall funding is set aside for “Community Grants” for which public power would also be eligible. These grants do not require, but allow for, partnerships with private entities and can be used to deploy fueling infrastructure in public locations, including parking facilities, public buildings, public schools, and parks. This section is based on the Clean Corridors Act, which APPA supports.

Another section of the legislation would require the Secretary of Energy, in consultation with state regulatory authorities, industry, the Electric Reliability Organization, and other relevant federal agencies, to carry out a program to promote and advance the physical security and cybersecurity of electric utilities, with priority provided to utilities with fewer resources. This section of the bill also requires a report to Congress on improving the cybersecurity of electricity distribution systems.

APPA is supportive of this provision. It is modeled upon an existing, successful public-private partnership funded by DOE’s Office of Cybersecurity, Energy Security, and Emergency Response Cybersecurity for Energy Delivery Systems program between the department and APPA to bring greater resources, training, and tools for cyber and physical security to small- and medium-sized electric utilities.

The bill would also authorize $500 million for the period of fiscal years 2022 through 2026 for a state energy program for state, local, and Tribal governments to support transmission and distribution planning, including feasibility studies of line routes and alternatives, preparation of necessary project designs and permits, and outreach to affected stakeholders.

The legislation would also increase the borrowing authority made available to the Bonneville Power Administration under the Federal Columbia River Transmission System Act by an additional $10 billion.

In addition, the bill calls for the establishment of a new Treasury account for the purposes of making expenditures to increase bilateral transfers of renewable electric generation between the United States and Canada -- $100 million is authorized to be appropriated to carry out the relevant subsection of the bill, which is specified as non-reimbursable.

The bill also directs a study of the potential hydroelectric power value to the Pacific Northwest of increasing the coordination of the operations of hydroelectric and water storage facilities on American and Canadian rivers.

Also, the bill would appropriate $500 million to the Western Area Power Administration for the purchase of power and transmission services.