View recent news coverage highlighting interviews and quotes from LPPC.
by Steve Mitnick
The Large Public Power Council's members provide energy to about ten percent of the nation's population. That is huge, so PUF was paying attention when Jackie Sargent, General Manager of Austin Energy, and Tom Falcone, CEO of the Long Island Power Authority, recently were elected as the organization's chair and vice-chair, respectively.
PUF wanted to know what the new leadership has in mind for an organization comprised of twenty-seven of the nation's largest public power systems. After all, the industry is undergoing transformational change on all levels.
PUF sat down with the new chair and vice-chair to learn what the future holds. As a bonus, LPPC president, John Di Stasio, was there too.
PUF's Steve Mitnick: How did this get started?
John Di Stasio: The Large Public Power Council is an organization of twenty-seven of the largest public power systems in the U.S. plus Puerto Rico. We've been in existence since 1987.
Collectively, our members serve about thirty million electric consumers. What differentiates us, is that we're all part of the overall public power community, but the larger asset-owning systems that comprise the LPPC have unique sets of challenges and opportunities.
Like our entire industry, public power is moving toward a cleaner resource mix and our members are focused on decarbonization and the pathways to get there, like electrification.
But what's still front and center is reliability and resilience because as you're in transition, the world's changing, and planning and operations are different than they've historically been. We also have a changing demographic in the workforce coming out of the pandemic.
PUF: Jackie, you're going to chair LPPC, and you're known as an innovator. You're in Texas, so there're special challenges. What does this mean for you at LPPC?
Jackie Sargent: We have a diverse membership and that's key to the success of LPPC. What has kept it strong over the years is it's a CEO-driven organization. When we have meetings, the CEOs are the board members. They're at the table.
It's important we continue to keep this an organization where we share best practices. We take away what has worked well for our utilities, and we learn from what hasn't.
We are all facing similar issues, such as supply chain disruptions, cybersecurity, working toward decarbonization, and ensuring we have reliable and resilient systems that are there for all our customers.
I want to prioritize how LPPC can help. We have a strategic plan and we're preparing for a meeting in May to do a refresh.
We've got a mission, a vision, and several goals. A lot of things have changed since 2019. Is that the right path forward? Does that still make sense? Then, how do we best advocate for those priorities in Washington?
At the same time, we've learned to be flexible and adaptive because when you look at the pandemic and what that meant for changing our operational position but continuing to reliably meet the needs of our customers, it's amazing. We kept our employees safe, and we continued to provide safe, reliable, and affordable energy to our consumers.
PUF: Tom, you're leading the Long Island Power Authority. You've decided to take on a leadership role at LPPC, so what does that mean for you and LIPA?
Tom Falcone: The LPPC and public power are special. It is a great business model because it's local control, it's what our consumers want, and there's direct consumer impact. Public power is a low-cost model — we have financing advantages and federal grant eligibility that lowers costs to our customers.
Serving in LPPC leadership is a chance to give back to public power and to LPPC, because LPPC has given LIPA a lot of good ideas, and there's community, getting around the table, meeting with fellow CEOs. I've borrowed good ideas from other leaders.
We're in the process, for example, of moving to time-of-use rates for all our customers. That's something we borrowed from SMUD, and our governance structure came from another LPPC member.
PUF: Now, that you're putting together a strategic plan for LPPC. What comes to mind?
Jackie Sargent: The strategic plan we did in 2019 was well thought out. We're looking at those things and saying, they seem to still fit today, but we want to bring that in front of membership and make sure those are still the mission and vision that meet the needs of the organization and membership.
Because we have such a good foundation, this is more of a strategic plan refresh, as opposed to a strategic plan rewrite.
What it will do is define some high-level goals to give direction to John and the team at LPPC, and they'll come back with actionable items, like they did after the 2019 plan. We're going to hear about the status of those action items.
One item was creating a strong presence in Washington D.C., which John did by coming to our board and moving to D.C. We want to prioritize our policies regarding tax and finance, infrastructure, resiliency, environmental policy, changing customer expectations, reliability, and support for our customers and workers.
PUF: Tom, talk about that aspect of federal versus state, and how that's important to your members.
Tom Falcone: There's a dramatic transition that's ongoing in the electric utility industry. There are two ways that LPPC members help each other. First, we share what each of us are doing. We're all moving toward cleaner sources of energy, for example.
We're all looking at opportunities for electric vehicles and beneficial electrification. We're all looking for reliability, resiliency, and cost-effective transmission. We're focused on cybersecurity.
The first thing is, what are each of us doing, how are we getting there, and what can we learn from each other? The second is where it interacts with John's role in D.C., and on every one of those issues, there's a federal role.
For clean energy, it's tax credits on renewables and we're focused on making sure there are lots of tax credits — they fund about a third of the cost of renewables — and that our non-profit members have equal access as taxable utilities.
There's the new federal Infrastructure and Jobs Act, and that has pockets of money for reliability, resiliency, clean energy, hydrogen hubs, and storage. How can we all work together as LPPC members and work in D.C., to move forward with those key initiatives?
It doesn't matter what initiative we have, even though we represent diverse constituencies, with different priorities and energy. There is a lot in common.
John Di Stasio: With so much of our industry being monopolies, and in some cases state-regulated monopolies, a lot of what we've responded to over the years has come to us through legislation and regulation.
I'd argue now there are a lot of emerging trends that are not necessarily coming at us through those channels, but coming from consumers, technologies, or new business models.
Part of what we're trying to do is be effective on what's in front of us, but also with an eye on the horizon and ask, what are externalities we need to pay attention to, discuss, adapt, and position ourselves for? We're at the point at which there is going to be legislation and we're informing that.
PUF: How is large public power doing these days and how does the future look?
Jackie Sargent: The future for large public power looks bright, and we have a lot going on across all our utilities. When we look at some of those in terms of advancing technologies, decarbonization, renewables, energy efficiency programs, reducing customer consumption, and electrification, we see electrification is going to play a significant role.
Electric vehicles are at ten percent of all new vehicle registrations in Austin, and we're continuing to see growth and adoption of that technology. Electric vehicle manufacturers show interest in Austin and surrounding areas. We have a high-tech sector in Austin too, and people are engaged and interested in energy.
Austin is one of the fastest growing cities in the nation, and we need technologies to meet that growth and expectations of customers, while managing reliability and affordability. Public power has been able to offer our customers affordable rates while testing out new technologies, doing pilot programs, being able to bring solutions to the table that maybe aren't as feasible in other areas, and that's of value.
PUF: For public power in New York State and LIPA, how's your future looking?
Tom Falcone: We have aggressive clean-energy goals in New York. We have to get to a carbon-free electric grid by 2040. We're in the middle of planning for that. We have about thirty-four hundred megawatts of new clean resources that are going to hit the Long Island grid between now and 2030.
That includes offshore wind, storage, and solar. We're planning for a grid transition, but we're also focused on reliability and resiliency.
We have aggressive resiliency plans because we're an island, so climate and weather affect us. We get decent sized storms — winter storms and hurricanes. We want resilient, clean, and reliable energy, but we have to do it affordably. Public power has two great advantages.
One is lower cost of capital and access to federal funds. We've gotten nearly two billion dollars of federal funds from the Federal Emergency Management Agency to cover the cost of storms, hurricanes, and resiliency investments over the last ten years.
We're looking at federal grant programs and other ways to access innovation — whether that's hydrogen hubs, storage, resiliency, or transmission. We have to build more transmission on Long Island, because we're having all this offshore wind landing here, and we're at the tail end of the electric grid and have to get it to the rest of the state.
Number two, we're meeting our customers' needs as we're not for profit. We want to be in the top ten percent of utilities for reliability, have a zero-carbon grid, want building electrification, and resiliency. These are all driven by our board, and by our customers.
John Di Stasio: The third value of public power is because you don't have to go through a state regulatory process, our speed to a decision and implementation can be a lot faster. We benefit from being nimble, which gives us the ability to quickly address what's in the interest of our consumers. That helps move the needle on a lot of these emerging techs.
Jackie Sargent: Customers don't compare us to other utility providers. They're comparing us to other services.
I use the example of Domino's Pizza. I order my pizza on the app, can see when they put it in the oven, take it out, and it's in the driver's vehicle. The pizza gets delivered to me, and expectations have been managed.
We have smarter meters that give data at the customer's premise, we have an outage management system, and an automated distribution management system. We can take all that data, bring it back, and utilize tools that give an outage map. When customers experience an outage, they can look at the app and see the estimated time of restoration.
PUF: Where do you think LIPA and the Large Public Power Council utilities are going to be, say, three to five years out?
Tom Falcone: The industry is changing. We're investing a lot in IT, customer service, reliability, resiliency, and clean energy. It's a time of rapid change in our customer's expectations. When we look three to five years out, you don't make great leaps in a minute, but you're going to see steady progress across all those fronts.
In the State of New York, we get about twenty percent of our energy needs from electricity and with the state's aggressive climate goals, it's going to be about seventy percent from electricity. Electricity is becoming the clean-energy source of this century. We're already central to providing electric for your phone, transportation, heating, for everything you're doing.
What you're going to see three to five years from now, is good progress across electric vehicle deployment, and clean energy. We're going to see change, and our customers will see the benefit.
Jackie Sargent: We are going to see breakthroughs in technology on the storage side that are going to help us with this transition to a clean energy economy. As we continue to get data and translate that into information to better serve our customers, we're going to see an increased focus on cybersecurity.
COVID taught us we can work differently. Work is what you do, not necessarily where you do it.
As we transition to a more hybrid workplace environment and we're faced with the challenges of ensuring people have tools to thrive, we're going to figure out better ways to address diversity, equity, and inclusion. That's going to translate into better delivery of programs.
Canary Media: The US needs to build a bigger, stronger grid. FERC has a plan for that
The needs to build a bigger, stronger grid. has a plan for that
By Jeff St. John
On Thursday, proposal to require transmission providers to develop new planning processes and draw up -year plans for building large-scale regional transmission and sharing the costs. The aim is to build a grid robust enough to handle a rapidly changing energy mix over decades to come.approved the first fruits of that process — a
’s notice of proposed rulemaking () doesn’t directly address some factors holding back clean-energy growth. For example, it doesn’t propose policies specifically aimed at reducing interconnection queue backlogs and costly grid upgrades for wind, solar and energy-storage projects — issues that the agency intends to take up in a future proposed rulemaking.
But the has earned cautious approval from clean-energy backers like the American Clean Power Association trade group for laying the groundwork for building the kind of grid the country will need to capture the cost, reliability and decarbonization benefits of clean energy.
Clean energy resources are abundant in the U.S., but our grid falls short of connecting clean-energy-rich regions to the population centers that need it most,” American Clean Power Heather Zichal said in a Thursday statement. We encourage to refine and finalize today’s proposal so that current and anticipated transmission needs can be met in a timely and cost-effective manner and support a transition to a clean energy future.”
Thursday’s – vote approving the is only the first step in this process. Stakeholders — including transmission grid operators, state utility and energy regulators, transmission-owning utilities, independent transmission and energy developers — will have months to comment on the proposal and debate how planning should be conducted. Then will vote on a final rule, potentially before the end of this year.
As laid out in Thursday’s , all regulated transmission providers would be required to undertake planning in a sufficiently long-term, forward-looking basis to meet transmission needs driven by changes in the resource mix and demand.” These Long-Term Regional Transmission Planning” processes would be required to look at least years ahead when considering the new generation resources and loads they’ll need to serve.
They would also need to consider a number of factors in determining the benefits of regional transmission plans to be weighed against the costs of building them. Those include federal, state and local clean-energy and decarbonization mandates, as well as the underlying economic factors that are leading to a shift from fossil fuels to lower-cost renewable resources. They also include growing power demand from electric vehicles and building heating systems, and high-impact, low-frequency events such as extreme weather,” according to ’s synopsis of the -page proposal.
For many transmission projects, allowing a broader set of benefits to be tallied as part of a cost-benefit analysis can make the difference between being deemed cost-effective enough to proceed and being deemed too costly. This is illustrated in the following chart from a analysis by consulting firm Brattle Group, which shows how benefits stacked up for a number of past transmission proposals.
State-regulated utilities — and their customers — will shoulder the costs of building new transmission, typically in the form of increases in the shared transmission tariffs assigned for the portion of electricity they receive from the grids in question.
To mitigate this potential for conflict, brought together and state utility regulators to hash out the key issues that have pitted states against the transmission plans developed by federally regulated transmission operators.’s proposal would require state approval of the cost-allocation methods developed through these regional planning efforts. This requirement emerged from a task force set up last year that
Some transmission boosters have called for the federal government to use eminent domain powers to override state and local opposition to transmission projects. But others have warned against pushing projects that can’t gain state-level support, arguing that engaging state regulators and utilities is far more likely to yield plans that can successfully navigate the kinds of regulatory and legal challenges that have forced many projects to be abandoned over the past decade.
All together, the in July , said at Thursday’s meeting. The overarching goal is to establish a new regulatory structure that fairly distributes costs and benefits of a transmission buildout that will address our nation’s changing resource mix and the changing role of electricity in society,” he said.represents a product of a lot of discussion and a lot of compromise,” Chair Richard Glick, who launched the review of transmission policy
That level of a logjam is reflective of the fact that our transmission system is basically full,” Robert Gramlich, executive director of Americans for a Clean Energy Grid, said in a webinar last week. The easy spots have been taken. Now it’s harder, and we have to proactively plan for how to get out of that situation.”
It has been nearly a decade since significant regional-grid expansion projects in the Midwest, Texas and California helped expand capacity for far-off renewable energy projects. Since then, the number of clean power projects being proposed and built has skyrocketed, but transmission deployments have shrunk in terms of total deployed capacity and the scope of the projects being built. A recent report from the U.S. Department of Energy found that average transmission deployment has declined from , miles per year between and to just miles per year from to .
This has happened even as total utility investments in transmission have risen steadily over the past decade, according to data from the Edison Electric Institute utility trade group. This chart highlights those investment trends across the seven federally regulated regional transmission operators (RTOs) and independent system operators (ISOs) that manage transmission networks providing electricity to about two-thirds of the U.S. population, as well as other transmission entities.
But this piecemeal planning” approach, as Clements described it in Thursday’s meeting, isn’t keeping up with future needs, according to a growing body of research. Much of the solar and wind power being planned today is in remote areas, far from the cities that need the electricity it will generate.
Expanded transmission could also yield more cost-effective and reliable electricity supplies, as illustrated in the following map from another from the Brattle Group. Sharing power across regions allows renewable resources to be transferred from regions where they are most plentiful to other regions where they can reportreplace higher-cost electricity. Regional power sharing also reduces the risk of weather events curtailing wind and solar supplies or driving spikes in demand for heating or cooling in one particular region.
By Miranda Willson
The Federal Energy Regulatory Commission released a proposal yesterday that could play a pivotal role in modernizing the nation’s power grid and advancing the transition to clean energy.
The commission plan offers some of the most significant federal changes in over a decade to the transmission planning process, which could help speed up the development of high-voltage power lines considered critical for adding more renewable energy to the grid.
Approved in a bipartisan 4-1 vote at the commission’s monthly meeting, the proposed rules seek to address key challenges in the process for planning new transmission projects and for determining how to fairly allocate their costs. Once the commission has reviewed comments on the proposal, it may issue final rules, most likely by the end of the year.
“Today’s proposed rules, if finalized, would facilitate much-needed transmission investment, improving the resilience of the grid, enhancing reliability and reducing power costs,” Chair Richard Glick, who voted in favor of the proposed rules, said during the meeting. “It’s also going to address our nation’s changing resource mix and the changing role of electricity in our society.”
The proposal came during the commission’s first in-person meeting since February of 2020. In addition to advancing reforms on transmission, FERC issued an order focused on reforming wholesale electricity markets in light of changes in the types of energy resources that provide power for the grid.
Staff at the independent agency also released an annual report on natural gas and electricity markets, highlighting last year’s record-high U.S. natural gas exports and the significant volumes of solar, wind and battery storage capacity that came online in 2021.
Under the changes proposed for the transmission planning process, electric utilities that deliver power would be required to identify transmission needs driven by the changing mix of energy resources, with consideration for potential extreme weather events that could affect infrastructure. Transmission developers would be compelled to assess the need for new regional power lines over a 20-year time frame at a minimum.
Transmission developers would also need to “fully consider” advanced tools that could make the flow of power more efficient and potentially reduce overall transmission costs, FERC staff said in a presentation on the proposal.
“We are thrilled to see action on the most important energy issue of our time: expanding the interstate transmission network,” Rob Gramlich, executive director of Americans for a Clean Energy Grid, said in a statement. “It seems obvious that we should be planning for future generation and load, but the rules need to change to make that happen.”
The proposal seeks to ensure that consumers benefit from new transmission projects and to better include state regulators, which typically have a final say in the siting of new power lines. In that sense, the plan recognizes the need for states’ “buy-in” on transmission infrastructure early in the process, which “may help improve outcomes,” said Commissioner Allison Clements, who voted for the notice of proposed rulemaking (NOPR).
“To be clear, should the states choose to accept the role proposed in this NOPR, they will become decision partners in guiding transmission investment. They will have influence over and accompanying accountability for weighing in on transmission planning decisions as to best serve customers,” said Clements, a Democrat.
Republican Commissioner James Danly was the lone dissenting voice on the proposal.
During the meeting, he described the proposal as an effort to “encourage buildout of transmission” to support “certain types of resources.” It would accomplish that by “socializing costs through putting public policy choices — state and, if you can believe it, local policy choices — front and center” in the transmission planning process, he said.
“That’s not something I think appropriately is a concern of the commission,” Danly said.
The commission’s other Republican, Mark Christie, voted to approve the changes, which he said could help ensure that power remains reliable and is delivered to consumers at reasonable prices. Notably, the proposed reforms would not change the process for developing and paying for all types of transmission projects, including those identified as necessary for electric reliability, Christie said.
He further described the plan as requiring “a process” without dictating specific outcomes, while giving states a much larger role in the development of power lines to suit their policy preferences or other needs, such as resilience in the face of extreme weather events. In addition, the rules would ensure that states only pay for projects that benefit them, Christie said.
“For these long-term projects, states are going to be at the heart of the planning. They’re going to get the opportunity to agree to the criteria, and they’re going to get the opportunity to agree to the cost allocation,” Christie said. “This has never been a formal requirement in FERC’s transmission regulation.”
Durability and compromise
The proposed plan received support from a range of clean energy groups, even as climate advocates and others acknowledged that some issues floated by FERC last year were left out of the rulemaking.
For example, the rules do not appear to address the issue of so-called interregional transmission planning, said Jeff Dennis, general counsel and managing director at Advanced Energy Economy.
Interregional power lines could be particularly helpful as the power system begins to rely more on carbon-free solar and wind projects, which tend to be built wherever those resources are most plentiful — and not necessarily close to cities and other places where electricity is most needed, analysts say.
That being said, the proposal was the product of compromise, commissioners said during the meeting. Bipartisan support for the reforms could help ensure that the final rules are durable, said Dennis, who previously worked at the independent agency.
“When I was at FERC, the things that stood the test of time were the things that were bipartisan,” Dennis said.
Former Commissioner Neil Chatterjee, a Republican, similarly noted the significance of the bipartisan nature of the reforms.
“For something as significant as overhauling transmission policy in the U.S., which is necessary, to have durability, I thought it was important this be a bipartisan effort,” Chatterjee, who is now a senior adviser at Hogan Lovells, said in an interview.
Other than interregional planning, another issue seemingly left out of the proposed rules was changes to the interconnection process.
Around the country, renewable energy developers have complained of increasingly long wait times to connect to the transmission system, which they say has held back the deployment of more clean energy. Once generators do make it through the queue, they are sometimes assigned high costs to pay for system upgrades that need to be performed to accommodate their project.
Even so, reforms to both the interconnection system and the interregional transmission planning process could be addressed in future rules, said Glick, a Democrat. What’s more, improving the process for paying for and planning transmission projects could indirectly ease other, related issues, including interconnection and challenges in siting new transmission lines, Glick said.
“Our hope is we won’t have nearly as many contentious issues on upgrades in the interconnection process with an improved planning process,” Glick said during a call with reporters after the meeting.
Utility groups expressed tentative support for the proposal.
Phil Moeller, executive vice president of the business operations group and regulatory affairs at the Edison Electric Institute, said the proposal marked an important step in recognizing the changing resource mix and the role of transmission in the energy transition. EEI is a trade association whose members include all of the country’s investor-owned electric utilities.
“Importantly, the NOPR supports long-term planning on a forward-looking basis while taking into account changes in the resource mix and in electricity demand,” Moeller said in a statement.
John Di Stasio, president of the Large Public Power Council, said his group — whose members include large consumer-owned utilities — is “pleased with the direction FERC is heading,” praising the new, forward-looking approach to transmission planning in particular.
“A balanced approach to building out the grid in a cost-conscious way will be critical moving forward. Cost control and the involvement of state and municipal entities in choosing projects and cost allocation will be critical elements of that balance,” Di Stasio said in a statement.
FERC also issued an order yesterday requesting that regional grid operators inform the commission as to how their markets are changing and of potential reforms they are considering.
Specifically, the order calls on regional transmission organizations and independent system operators to submit information about how their system needs “are and will be different” as different types of energy resources come online and in light of other changes in the energy sector, Glick said.
The order follows a series of technical conferences that FERC held last year examining the nation’s power markets. One of the takeaways from those conferences was that many regions were increasingly relying on renewable, intermittent resources, requiring a need for more “system flexibility,” Glick said.
“[This] will help enable the commission to assess whether modifications to the markets we oversee are necessary and to address the changing needs of the system,” he said.
FERC’s report on electric and natural gas markets found that in 2021, a record-high capacity of liquefied natural gas was exported from the United States. That led to an increase in overall natural gas demand last year compared with 2020. Natural gas prices also increased in 2021 relative to the year before as the United States and other countries began to recover from the effects of the coronavirus pandemic, the report said.
Natural gas and oil prices have further increased since the end of 2021, stemming in part from Russia’s invasion of Ukraine, FERC staff added during a presentation on the report.
Meanwhile, 2021 saw significant increases in solar, wind and battery storage capacity around the country. In addition, coal-fired power plants made up the largest share of retirements by resource type nationwide.
The report also noted growing challenges in the process for connecting new generation resources to the grid. At the end of last year, all of the RTOs and ISOs in the United States had 716,783 megawatts of resources in their interconnection queues, the bulk of which were solar, wind or hybrid resources.
“The changing resource mix, including the interest in and growth of renewable generation, has made backlogs and delays a persistent, growing feature of generation interconnection queues nationwide,” the report said.
September 16, 2021
By John Di Stasio
America is undoubtedly at a key inflection point as we work to transition to a clean energy future. There is alignment among lawmakers, industry and the public in support of transitioning to cleaner fuels and new technologies designed to reduce carbon emissions. As Congress considers new energy and environmental policy goals, tax policy becomes critical to provide necessary support and to maintain affordability for consumers.
Public power has embraced this transition moving to a cleaner energy mix over the past several years, consistent with the interests of their communities and consumers. That effort has been accelerating as the cost of clean alternatives has declined, and the performance improved. Two of the country’s largest public power systems, Sacramento Municipal Utility District and Los Angeles Department of Water and Power, have set goals to eliminate greenhouse gas emissions from their supply portfolios by 2030 and 2035, respectively. Nearly all utilities have established goals aimed at reducing emissions and increasing the integration of low or non-emitting resources into their supply mix.
That’s because public power systems, which collectively serve around 50 million Americans, are solely focused on fulfilling the needs of the communities they call home. As not-for-profit utilities, their “dividend” comes in the form of lower rates, reliability and environmental stewardship. Benefits flow back to customers, and they are directly accountable to the municipalities that govern them. As mission-driven organizations, public power is out front of the clean energy transition, working to provide Americans with the clean, reliable and affordable power they are calling for.
But there’s one thing holding public power back as the industry strives to meet the ambitious clean energy goals — the federal tax code. As it currently stands, federal tax policy puts public power communities at a disadvantage by having them pay more for the same clean energy outcomes as customers in other markets. And these communities that we’re talking about include some of our nation’s largest cities, including Seattle, Phoenix, San Antonio, Omaha and Orlando, among many others.
As our federal lawmakers understand, the tax code is a powerful tool that drives investment. One of the best ways federal policymakers can accelerate our clean energy future is by eliminating undue restrictions on public power’s ability to access tax incentives for infrastructure investment.
In particular, the inability to utilize renewable and clean energy tax credits is an immense barrier preventing both public power as well as electric co-ops, which together serve over 90 million Americans, from unleashing their full potential. If the goal is to move toward a cleaner energy grid by providing tax incentives for developing clean energy generation, storage, transmission and electric vehicle recharging infrastructure, federal incentives must be fully comparable to those received by private developers and utilities.
Without a change in policy, public power communities will be unduly burdened as their local utility invests in clean energy technologies to decarbonize their generation portfolios, improve air quality and protect the environment. Withholding access to tax credits forces public power to enter into power-purchase agreements with third-party developers who are able to directly access the tax credits. Much of the value of the tax credit then flows to the project developer and their investors rather than to the not-for-profit utility and the communities they serve.
Fortunately, this change of policy is not without its supporters. Chairman of the Senate Finance Committee Sen. Ron Wyden (D-Ore.), included 100 percent access to direct-pay tax credits for public power in his Clean Energy for America Act. Chairman of the House Ways and Means Committee Rep. Richard Neal (D-Mass.), also provides 100 percent direct-pay tax credits for public power in the Build Back Better Act. President Biden’s own Justice40 Initiative, which was established to ensure that 40 percent of the benefits of certain federal climate investments flow to disadvantaged communities, calls out its support for revising the federal investment tax credit to ensure that municipal entities like public power are eligible.
Now is the time for lawmakers to act. As legislation moves through Congress, language that provides public power with 100 percent access to direct-pay tax credits must be included in any final legislation. Without it, Congress leaves behind nearly 30 percent of the nation’s electric utility customers without access to incentives and support. With a reform to the tax code, ambitious clean energy goals can be advanced and done so equitably across the country.
John Di Stasio is the president of the Large Public Power Council, an advocacy organization that represents 27 of the largest public power systems in America and is the former CEO of Sacramento Municipal Utility District.
Utility Dive: Utilities to DOE - More Information, Not New Regulations, Needed to Secure the Grid
June 14, 2021
By Robert Walton
The utility sector needs precise information about the federal government's equipment concerns and better visibility into manufacturing supply chains in order to keep the electric grid secure, several groups told the U.S. Department of Energy in June 7 comments responding to a call for cyber and supply chain security recommendations to secure the electric grid.
However, new regulations and security requirements are not necessary at this time, according to the Edison Electric Institute (EEI), which represents investor-owned electric utilities. That idea was echoed by other industry groups filing comments.
Utilities support development of a U.S.-based supply chain, to move away from Chinese grid equipment, but warn that such a move could cause a short-term rise in prices due to a lack of suppliers. Procurement of some large power transformers, EEI noted, "may primarily depend on a single country."
Utilities say they need clear direction from the government on any equipment bans, and help getting more information on what components make up the grid equipment in use. But they also warn that, at this point, new regulations could get in the way of making the grid more secure — and could even affect its operations.
"Many efficiencies can be gained in leveraging existing cyber and physical security and supply chain processes, as opposed to creating and imposing upon the industry a new set of processes that could disrupt existing measures to combat the threats or access to critical equipment," EEI said in its response to the request for information (RFI).
'Spillover' effects on reliability
New directives from DOE, whether addressing supply chains or equipment in use, could affect the market for critical equipment and "have a spillover effect on the day-to-day grid reliability," EEI said, and "may increase the ultimate costs to electric customers."
Smaller utilities also questioned the need for new security requirements. The American Public Power Association (APPA) filed comments jointly with the Large Public Power Council, the National Rural Electric Cooperative Association and the Transmission Access Policy Study Group.
The groups urged DOE to "focus on the extent to which existing standards have been successfully implemented in the electric utility sector to help frame the scope for any new regulations." And if DOE sees risks that are not being addressed in the existing required supply chain standards, the agency should consult with the Federal Energy Regulatory Commission and/or the North American Electric Reliability Corp. (NERC), and "provide actionable information that can inform appropriate standard revision."
"It would be burdensome on utilities, in particular smaller entities like public power utilities and electric cooperatives, to require them to report on supply chain requirements to more than one federal regulator," APPA and the other groups said.
EEI also noted that NERC's critical infrastructure protection standards are relatively new, and consequently, additional requirements or standards at this point are premature. "Rather time for implementation and gap analysis is warranted to determine whether any changes or additions are needed," the group recommended.
The Nuclear Energy Institute, which advocates for the industry, told DOE, "we do not see the need for any additional assistance, security requirements, or procurement practices to be imposed on the commercial nuclear power fleet at this time." The group also said it does not see a need for DOE to issue any prohibition orders on "equipment or infrastructure associated with the commercial nuclear power fleet."
Supply chain visibility
Supply chain risks have come under heightened scrutiny since the SolarWinds hack. About 25% of power utilities were exposed to the software vulnerability, according to NERC.
Experts say modern software and equipment is made up of hundreds or even thousands of components which must be examined for vulnerabilities. EEI said its companies need specific details on any piece of equipment that DOE might flag for concern.
"The supply chain for electric power equipment is enormous ... and it is not the end-use electric companies who have information about what is inside those pieces of equipment or components," EEI said in its comments.
Utilities have tools to identify threats to the supply chain and electric grid, but EEI said "by definition, these are not all encompassing. Government has access to sensitive information that it should find ways to share so all affected stakeholders understand what equipment is of concern and why it is of concern."
The utility group encouraged DOE to "collaborate with and help electric companies by sharing this information and include other stakeholders who have the knowledge."
EEI also said the DOE could work with the National Institute of Standards and Technology to develop "consistent criteria" for a hardware and software bill of materials (SBOM). An SBOM indicates what components are in a piece of software, allowing utilities to track and patch vulnerabilities.
"Doing so would support standardization in these bill of materials, which would make the development and provision of such useful tools for the purposes of identifying provenance and the potential presence of any foreign ownership or control," EEI said.
President Joe Biden signed an executive order May 12 to improve the country's cyber defenses, and it required use of an SBOM in government procurements. EEI has been been collaborating with the federal government to pilot the use of SBOMs in energy sector procurements.
The Electric Power Supply Association, which represents competitive providers, said DOE could consider strengthening industry procurement efforts "by crafting standardized cybersecurity contract language and creating a whitelist of suppliers who manufacture component and subcomponent parts."
While DOE examines the potential of new security requirements, the RFI said the federal government expects utilities will "act in a way that minimizes the risk of installing electric equipment and programmable components that are subject to foreign adversaries’ ownership, control, or influence."
It's not that simple, warned utilities.
The concept of "foreign ownership, control, and influence” is "very broad," APPA told the agency.
"To the extent DOE moves in this direction, the industry would benefit from efforts by DOE and other government agencies to identify actionable information regarding threats from adversaries abroad," APPA said.
EEI said its companies need clear guidance on what specific factors — including location of manufacturing or level of equity ownership — would constitute "foreign ownership, control, and influence."
"Otherwise, procurement decisions cannot be made with certainty. For example, given the number of equipment suppliers that are publicly traded and the speed at which stocks change hands, electric companies could never be certain whether a supplier has foreign ownership," EEI said.
June 9, 2021
By Caitlin Oprysko
REPORT: COMPANIES THAT PAID NO CORPORATE INCOME TAX DROPPED $450M ON INFLUENCE EFFORTS: On the heels of ProPublica’s bombshell report on Tuesday showing that some of the wealthiest Americans routinely pay little or no taxes, a new report from watchdog group Public Citizen today dives into the lobbying expenditures of 55 corporations that paid no federal corporate income tax in 2020, according to an analysis from the liberal Institute on Taxation and Economic Policy.
— The report found that over the past three election cycles, the companies spent a combined $408 million to lobby the federal government while dishing out $42 million in campaign contributions during that period. Over half of the companies reported lobbying Congress on tax issues during that time, according to the report, with 22 of the companies reporting that they lobbied on the 2017 GOP tax bill that lowered the corporate tax rate from 35 percent to 21 percent.
— “FedEx spent the most of any company in this analysis,” according to the report, “spending $71 million on lobbying and campaign contributions from the 2016 election cycle through the 2020 cycle (years 2015 through 2020). FedEx is followed by Charter Communications ($64 million), American Electric Power ($42 million), Duke Energy ($37 million) and Textron ($22 million).”
KOCH COMMS VET JOINS CGCN: Peter Ventimiglia has decamped from Koch Industries after almost seven years and joined CGCN Group as a partner. Ventimiglia, who led external relations and a corporate reputation campaign for Koch, will stick to similar issues on the communications side for CGCN, in addition to the occasional research analytics work. Steve Lombardo, Koch’s chief communications and marketing officer, in a statement called Ventimiglia “one of the primary architects of our communications strategy at Koch, and his work was instrumental in driving our efforts forward in a significant way.”
— Ventimiglia told PI in an interview that he will also be assisting clients on how best to make sure their target audience sees messages given how much the media landscape has shifted in recent years. “I think it's staying on top of those things, and recognizing that it's really tough — as a corporation, it's really tough these days to make sure that the right people are hearing your stories,” he said.
NEW BUSINESS: Qualcomm has added new outside lobbying teams to its arsenal for the first time in two years. The chipmaker retained a team from Capitol Tax Partners at the beginning of last month to lobby on international tax issues, according to disclosures filed Tuesday. In April, it hired a team from Tiber Creek Group (previously Peck Madigan Jones) to lobby on corporate taxes. The semiconductor and wireless tech company retains a host of other outside firms, including Covington & Burling, a contract that is routinely among the largest on K Street each quarter.
— E-cigarette giant Juul Labs has also added a new outside lobbyist for the first time since 2019. The vape maker hired Miller & Chevalier’s Jorge Castro, a former top IRS aide, to lobby on excise tax issues. (A perennially introduced bill by Senate Judiciary Chair Dick Durbin (D-Ill.) would create a federal excise tax on e-cigarettes among other products and tax them the same as combustible cigarettes.) In a statement to PI, a Juul spokesperson said Castro will lobby Congress on “risk-proportionate tax matters,” which “applies the most stringent regulations to the riskiest tobacco products and encourages adult users to transition to potentially less harmful alternatives like vapor products while combatting underage use.”
— Visa, too, expanded its roster of lobbyists for the first time in a few years according to new filings. It brought on 535 Group’s David Lugar and Jefferies Murray.
REMEMBER THE TIKTOK BAN?: “President Joe Biden on Wednesday rescinded former President Donald Trump’s executive orders that sought to effectively ban the Chinese-owned video app TikTok, instead replacing it with new guidelines for assessing apps' potential risks to U.S. data,” POLITICO’s Cristiano Lima reports.
— In place of the Trump edict — which was aimed at shutting down the U.S. operations of other apps linked to China like WeChat and cited “allegations that Amercians’ personal data could fall into the hands of government officials in Beijing” — Biden’s order “establishes a set of criteria to evaluate whether transactions involving software apps with ties to foreign adversaries threaten Americans' data.”
— A senior Biden administration official tells Cristiano the order “is going to enable us to take strong steps to protect sensitive data of Americans from collection and utilization of foreign adversaries including China through connected software applications.” It also “directs the Commerce Department to issue recommendations for regulatory and legislative action to ‘address the risk associated with foreign adversary connected software applications’ according to a White House news release.”
HOSPITAL LOBBYIST TAPPED FOR TOP CMS POST: “The Biden administration has tapped Erin Richardson, a top lobbyist at the Federation of American Hospitals, as chief of staff to CMS Administrator Chiquita Brooks-LaSure,” our Susannah Luthi and Rachel Roubein report.
— Richardson most recently served as senior vice president of government affairs at the trade association, which represents for-profit health systems. She also previously worked at the White House Domestic Policy Council during the Obama administration, and before that for the House Ways and Means Committee, “which also counts Brooks-LaSure and HHS Secretary Xavier Becerra among its alumni.”
FLYING IN (VIRTUALLY): The Large Public Power Council, which represents dozens of the largest public power utilities in the country, is hosting a virtual fly-in this week, where its members plan to make the case to lawmakers that any infrastructure or clean energy bill should include “comparable incentives” for public power providers. They’ll be meeting with a mix of staff and members from the offices of Senate Majority Leader Chuck Schumer, Sens. Michael Bennet (D-Colo.) and Sherrod Brown (D-Ohio) and Reps. Kevin Hern (R-Okla.) and Suzan DelBene (D-Wash.).
IF YOU MISSED IT TUESDAY: “James Murdoch, one of billionaire media mogul Rupert Murdoch’s sons, quietly invested $100 million in his nonprofit foundation, which then used a large chunk of the money to fund political groups during the 2020 election cycle,” CNBC’s Brian Schwartz reported.
— “The $100 million donation marks the couple’s largest known contribution to their foundation or any political effort.” It came in the form of Disney shares, Quadrivium’s 990 tax return from 2019 shows, on the same date that a deal closed for Disney to buy 21st Century Fox, of which James Murdoch was chief executive, and he and his wife, Kathryn Murdoch, “were building their own political operation.”
— Of that $100 million, the tax document shows, “over $25 million went toward grants, including for several political causes. … The most the Murdoch couple has spent through their foundation on political causes, such as fighting climate change and helping people vote.”
— Richard Carbo will be vice president of communications for S-3 Group. He most recently ran his own consulting firm and Louisiana Gov. John Bel Edwards’ reelection campaign.
— Whitmer & Worrall has named Angela Acampora managing director. She was previously a senior associate, and in her new role will oversee the firm’s client servicing initiatives, operations and business development strategy, with a focus on health care.
— Adam Conner, vice president of tech policy at the Center for American Progress and a Facebook and Slack alum, has joined the board of trustees of George Washington University, of which he is an alum.
— The American Society of Association Executives has promoted Jeff Evans to director of public policy and Nate Fisher to senior manager of public policy and ASAE’s PAC, known as APAC. Evans was previously an associate director. Fisher was previously a manager.
— Andrew Dunkley has joined Strategic Elements as senior public affairs manager. He was previously senior external affairs manager with Colorado-based consulting and public affairs firm Pac/West Strategies.
— Brian Kerkhoven has joined McCarthy Advanced Consulting as an associate. He was most recently at the past seven years at the North American Building Trades Unions and is a Mike Kelly (R-Pa.) and Jim Walsh (R-N.Y.) alum. MAC has also promoted Erin Delaney to director of operations.
— Gabrielle D’Adamo Singer is now a senior manager for cyber policy at Accenture North America government relations. She previously was staff director for the Senate Homeland Security and Governmental Affairs Committee
— Peter Kucik is joining Mercury Public Affairs as managing director in its Washington office. He was most recently counsel at Ferrari & Associates and is a Treasury Office of Foreign Assets Control alum.
— Boston-based Tremont Strategies Group has added Khushbu Webber as vice and general counsel and Alexandra Eby as government affairs associate, and promoted Tristan Thomas to senior government affairs associate.
— Taylor Mason, vice president of public affairs at KPM Group DC, has been named executive director of the newly formed Rare Disease Company Coalition.
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NEW JOINT FUNDRAISERS
BARRASSO YOUNG VICTORY FUND (Sens. John Barrasso, Todd Young, Common Values PAC, Oorah! Political Action Committee)
Elect Black Democrats (The Collective PAC, The Collective Super PAC)
IRON LADIES PAC (Reps. Beth Van Duyne, Michelle Fischbach, Claudia Tenney)
ALABAMA FIRST (Super PAC)
FIREFIGHTERS RIGHTS PAC (Super PAC)
Labor and Community for an Independent Party (PAC)
MAGACoin Victory Fund (Super PAC)
NEW LOBBYING REGISTRATIONS
535 Group, LLC: Visa, Inc.
Albertine Enterprises, Inc.: Led Lighting Iq, LLC
Arent Fox LLP: Drug Policy Alliance
Baker Donelson Bearman Caldwell & Berkowitz /The Daschle Group: Liberty Defense Holdings, Ltd.
Bolton-St. Johns, LLC: Ruralorganizing.Org
Bose Public Affairs Group: Global Partnership For Education
Buchanan Ingersoll & Rooney, Pc: Optimum Power Holding Co., LLC
Capitol Hill Partners: Concordance Academy Of Leadership
Capitol Tax Partners, LLP: Qualcomm Incorporated
Capitol Tax Partners, LLP: View, Inc.
Cassidy & Associates, Inc.: Center For American Progress
Cassidy & Associates, Inc.: International Code Council
Cassidy & Associates, Inc.: Ledger8760, Inc.
Cassidy & Associates, Inc.: US Well Services
Dentons US LLP: Midtown Connector Project Foundation, Inc.
Dentons US LLP: National Desert Storm Memorial Association
Dentons US LLP: Tampa Bay Water
Duane Morris Government Strategies: Monroe Energy LLC
Duane Morris Government Strategies: Pbf Holding Company LLC
Ghost Management Group, LLC Dba Weedmaps: Ghost Management Group, LLC Dba Weedmaps
Gis Associates, Inc: Enterprise Zone Corp Of Braddock
Greenberg Traurig, LLP: Washington County, Wi
Hartman Harman Cosco LLC: Solar United Neighbors
Hill East Group, LLC: Sentinelone, Inc.
Holland & Knight LLP: Alibaba Group Holding Limited
Holland & Knight LLP: Global Business Alliance
Holland & Knight LLP: Lacore Enterprises, LLC
Invariant LLC: Leaflink, Inc.
J.A.Hill Group, LLC: Windstream Services LLC
Lne Group: Next Steps Chicago
Lne Group: Pushing Boundaries
Lne Group: University Settlement
Lsn Partners, LLC: One Concern, Inc.
Michael Torrey Associates, LLC: Louis Dreyfus Company LLC
Miller & Chevalier, Chtd.: Juul Labs, Inc.
Miller & Chevalier, Chtd.: The Jewish Federations Of North America
Moveon.Org Civic Action: Moveon.Org Civic Action
Mr. Stephen Ryan: American Coalition For Taxpayer Rights
Mr. Stephen Ryan: American Registry For Internet Numbers
Mr. Stephen Ryan: Paper Excellence Holdings Corporation
Ms. Alexis Tkachuk: Tremont Strategies Group, On Behalf Of Tree Care Industry Association
Prime Policy Group: Norse Atlantic Airways As
Rokala Public Affairs (Fka Mr Mark Rokala): City Of Duluth, Minnesota
Sandler, Travis & Rosenberg, P.A.: Ebay
Scale Ai, Inc.: Scale Ai, Inc.
Sidley Austin LLP: Illumina, Inc.
The Madison Group: International Association Of Fire Fighters
The Picard Group, LLC: City Of West Monroe
The Vogel Group: Our Next Energy, Inc.
Triple P America: Triple P America
NEW LOBBYING TERMINATIONS
Keller Partners & Company: Luna County
PV Magazine: Sunrise Brief - Leaders Urge Support for Clean Energy Tax Breaks that Benefit Public Power
May 24, 2021
By David Wagman
Top executives of the nation’s public power providers are urging congressional leadership to support tax policies that allowing public power and electric cooperatives to fully make use of direct pay for renewable and clean energy tax credits.
Leaders of the American Public Power Association, National Rural Electric Cooperative Association, and Large Public Power Council wrote to top leaders in the House and Senate seeking what they say would be “comparable energy tax incentives” to support the deployment of clean energy technologies.
In the letter, the executives said that one shortcoming of federal energy tax policy is that not-for-profit and tax-exempt community-owned electric utilities have been excluded from being able to directly claim these credits. They said that the result is that their member utilities “only indirectly benefit from energy-related tax incentives” such as through long-term power purchase agreements with taxable project developers and their tax equity partners.
The executives said that much of the value of the tax credits flow to the project developers and their investors rather than to the not-for-profit utilities and their customers. In addition, to qualify for the credit, the project developer and tax-equity investors must retain ownership of the facility. Public utilities may only later buy the facilities by paying market prices for the facility.
“This increases the cost and inefficiency of the present system and means that the purchasing utility is denied the substantial operational benefits that flow from direct ownership,” the executives wrote.
They said that direct payments would be used to help offset project costs and increase the incentive for further investments, while enabling public power utilities and rural electric cooperatives to own clean energy facilities directly.
The three organizations represent public power utilities, which serve more than 49 million Americans, and rural electric cooperatives, which serve another 42 million.
Green hydrogen plant
Indiana-based Cummins and Iberdrola said they plan to build a $60 million, PEM electrolyzer plant in Castilla-La Mancha, Spain, to produce green hydrogen. The investment follows their earlier decision to partner on large-scale hydrogen production projects in Spain and Portugal.
A site selection search is currently underway for the plant, which will house system assembly and testing for roughly 500 MW/year and will be scalable to more than 1 GW/year. The facility is slated to open in 2023. Cummins has deployed more than 600 electrolyzers in 100 countries globally.
As part of the deal, a 230 MW green hydrogen project in Palos de la Frontera that Iberdrola has planned for fertilizer producer Fertiberia will become a benchmark for large electrolysis projects. Cummins will be the electrolyzer supplier for the Palos project. With experience gained in the project, Iberdrola and Cummins will work to design other large electrolysis projects. The two are also working on a hydrogen refueling station in Barcelona.
In Castilla-La Mancha, Iberdrola operates 2,376 MW of solar and wind energy. Recently, the company has completed three photovoltaic projects in the region, totaling 150 MW.
Coal power surges in early ’21
In the first four months of 2021, natural gas-fired generation in the Lower 48 states averaged 3,394 GWh per day, a nearly 7% decrease from the same period in 2020, according to data from the Energy Department’s Energy Information Administration (EIA). The drop stems from higher natural gas prices and increased competition from renewables, and is the first year-over-year decline since 2017.
EIA said that natural gas-fired generation has faced increased competition from renewable generation because of recent record-high capacity additions to solar and wind power plants. Between May 2020 and February 2021, some 22.5 GW of combined net solar and wind additions came online, a 15% increase. EIA said that it expects another 28.7 GW of solar and wind capacity to enter service by the end of 2021.
By contrast, 4.8 GW of U.S. natural gas capacity came online between May 2020 and this past February, a 1% increase. EIA said it expects another 3.8 GW of natural gas capacity to come online through the end of the year.
U.S. natural gas prices have risen since April 2020 because of lower natural gas production and higher winter heating demand. Higher prices have made natural gas-fired generation relatively less competitive compared with coal-fired generation, prompting natural gas-to-coal fuel switching. EIA said that coal-fired generation rose nearly 40% during the first four months of 2021 compared with the same period in 2020, and accounts for 23% of total generation.
Aurora Solar closes finance round
Aurora Solar, which provides software for solar sales and project design, closed a $250 million Series C funding round led by Coatue, with follow-on participation from existing investors ICONIQ Capital, Energize Ventures, and Fifth Wall.
Over the past two years, Aurora Solar has raised more than $320 million. The company said it will use the investment to expand its product roadmap, hire more people, expand sales and customer support, and build its leadership team to scale the company.
Agri-Pulse: Biden's Clean Power Target Poses Stiff Challenge for Some Rural Power Providers
May 19, 2021
By Philip Brasher
President Joe Biden’s goal of making U.S. electric power carbon-free by 2035 looks very doable — or quite challenging and expensive to meet — depending on where you live, work or farm in rural America.
In New England, the Vermont Electric Cooperative, which gets most of its electricity from hydropower, nuclear and natural gas, says it will be carbon-free in just two years, 2023, and will be using only renewable power by 2030. In the Pacific Northwest, carbon-free hydropower also has long been a major power source.
But in many other regions, including the Plains and Rocky Mountain states, rural electric co-ops and other rural power providers have long been heavily dependent on coal, and while many have been retiring coal-fired plants — often in favor of natural gas — power suppliers say replacing that power with reliable, affordable alternative sources could take far longer than the timeline Biden envisions.
“If you're looking at thinking that there's an opportunity to hit zero carbon in the electric sector by 2035, we think that's an overly ambitious goal. We just do. You've got circumstances across the country that are different,” said Jim Matheson, a former Democratic congressman who is CEO of the National Rural Electric Cooperative Association.
"We've got to have a conversation in this country about how you can go about" reaching Biden's goal, Matheson said. "Where's the technology today that can allow that to happen to go all the way to zero? And right now we think that's an open question that we haven't heard an answer to."
Power generation accounts for 25% of U.S. greenhouse gas emissions, behind transportation at 29%, according to the Environmental Protection Agency.
To achieve Biden's 2035 target, his American Families Plan called for establishing a clean electricity standard that would require utilities to phase out their fossil fuel power sources. He hasn’t said how he would try to implement the standard, however.
Getting congressional approval wouldn’t be easy, and it would almost certainly take support from RECs and other rural power providers. In 2009, the last time Congress tried to force the utility industry to cut greenhouse gas emissions, NRECA pushed back hard against a House-passed cap-and-trade plan because of the impact it would have had on coal-dependent co-ops.
Since then, rural electric co-ops have decreased their reliance on coal significantly.
In 2009, coal accounted for 58% of the national retail electric fuel mix for co-ops, and 12% came from lower-emitting natural gas. By 2019, coal’s share had fallen to 32%, replaced in part by natural gas, which also accounted for another 32% of REC’s power share.
Renewable sources, including wind, solar and hydropower, accounted for 19% of RECs’ power in 2019. Nuclear energy continues to provide about 15% of REC power nationally.
Co-ops say they’ll need significant new federal support to help defray the cost of continuing their shift away from fossil fuels.
Recognizing the importance of RECs, the American Jobs Plan earmarks $10 billion for assistance to co-ops but doesn’t specify how the money would be spent.
“We're pleased that we are part of the discussion, that we're included as a consideration as we look at this policy, but the conversation is going to have to happen on Capitol Hill about how the legislation is written and what that really means,” said Matheson.
Meanwhile, there's the question of whether Biden can get clean power requirements implemented nationally to replace or augment the patchwork of state programs that now exist. Bipartisan agreement in Congress on a clean electricity standard isn’t out of the question, said Sam Thernstrom, CEO of Energy Innovation Reform Project, a nonprofit group that promotes the development of advanced energy technologies.
Reps. David McKinley, R-W.Va., and Kurt Schrader, D-Ore., have proposed a clean electricity standard that would require eliminating 80% of greenhouse gas emissions from the power sector by 2050, a longer-range target than Biden’s. The extended period would give time for technological innovations to bring down costs and soften the impact on ratepayers, Thernstrom said.
“One thing that utilities really need more than anything in order to succeed is regulatory clarity, certainty, predictability, so they can make these long-term, multibillion-dollar investments,” he said.
Financial incentives will be important, too.
NRECA, the American Public Power Association and the Large Public Power Council are appealing to Congress to provide them with direct assistance in lieu of the tax credits currently provided for wind and solar projects. RECs and other not-for-profit or tax-exempt power providers can’t use the credits since they don’t have tax liabilities, so they instead have to go through private companies to install the projects. Those private developers, in turn, retain ownership in the facilities.
“This increases the cost and inefficiency of the present system and means that the purchasing utility is denied the substantial operational benefits that flow from direct ownership,” the groups said in a recent letter to congressional leaders.
Providing direct payments to RECs instead of tax credits could “help cooperatives have an even playing field when it comes to develop renewable resources,” said Lee Boughey, a spokesman for Tri-State Generation and Transmission Association, which supplies power to RECs in Colorado, New Mexico, Nebraska and Wyoming.
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“We will be able to develop projects directly and reap the full amount of savings for our members and their consumers,” he said.
Tri-State is among the rural power suppliers that continue to shift away from coal, in part because of a greenhouse-gas reduction target set by the state of Colorado. By 2024, 50% of Tri-State’s power will come from renewable energy, and Tri-State's goal is to have 70% of the power be carbon-free by 2030.
Tri-State last year retired a coal-fired plant in New Mexico, and a Colorado facility is scheduled to be retired by 2030. Tri-State gets power from additional coal-fired plants in Wyoming and Arizona.
For Vermont Electric Co-op, going carbon-free will require replacing the 25% share of its power that comes from natural gas. Vermont has a renewable power standard that is phasing out the use of fossil fuels by requiring utilities in the state to get 75% of their power from renewables by 2032.
The co-op also will be using techniques called “peak shaving” to reduce the need for natural gas during periods of peak demands. Peak shaving involves leveling out the peak periods of electricity use by commercial and industrial customers.
In Nebraska, the Nebraska Public Power District, which supplies power to much of the state outside Omaha and Lincoln, has a different set of challenges. About 65% of NPPD’s power is carbon-free — mostly from a nuclear power plant along the Missouri River that will need to have its license renewed in 2034 — while 20% of its power comes from coal.
It’s that 20% in coal-fired energy that is going to be particularly expensive to replace, says Tom Kent, NPPD’s president and CEO. NPPD is testing carbon capture and storage, or CCS, technology at the plant in cooperation with the Energy Department, but it’s not cost-effective yet, he said.
Wind and solar power continue to have their limitations because of their intermittent nature and the need for advancements in storage technology.
“Getting to carbon-neutral or carbon-free across the economy in the United States by 2035 is a pretty significant challenge,” said Kent. “The technology really isn't there yet. It's not. It’s not commercially viable.”
May 17, 2021
By Matthew Choi
There's bipartisan agreement the federal government should have a greater hand in defending critical fuel infrastructure from cyber attacks, but the oil and gas industry doesn't want to get too hasty with a major oversight overhaul.
Lawmakers are brewing legislation to compel companies to report cyber attacks — a drive further invigorated by the Colonial Pipeline attack.
The heads of Exxon, Devon and EOG Resources declined to participate in a hearing by the House Natural Resources Oversight subcommittee on “Misuse of Taxpayer Dollars and Corporate Welfare in the Oil and Gas Industry.”
HAPPY MONDAY! I’m your host, Matthew Choi. Congrats to Chris Bliley of Growth Energy for knowing Ethan Hawke starred in all the movies mentioned in last week’s trivia questions. For today’s trivia: What is Eilis’s hometown in Ireland in the movie “Brooklyn”? Send your tips and trivia answers to email@example.com. Find me on Twitter @matthewchoi2018.
Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today's episode: Behind progressive anxiety toward a CES.
DRIVING THE DAY
REFORGING THE ARMOR: The Colonial Pipeline hack prompted a fuel scramble just before a major travel holiday and shone a spotlight on some of the Biden administration’s political and administrative weak spots. But it has had an outcome rarely seen these days — getting Republicans and Democrats to agree on the need to bolster cybersecurity regulations in both the private and public sectors.
Meanwhile, the oil and gas industry is saying, hold your horses. Though industry leaders praised the Biden administration’s response to the hack, they told Pro’s Ben Lefebvre that they view a major overhaul on how private companies secure their cyber operations as a step too far.
“Any discussion of regulation is premature until we have a full understanding of the details surrounding the Colonial attack,” Suzanne Lemieux, API manager of operations security and emergency response, told Ben in a statement.
Ben goes into the challenges of patching up the holes that allowed ransomware to freeze one of the most important pipelines in the country — from the mere scale of a multifaceted industry to the complications of past private-public security collaborations.
ON THE HILL
TELL US WHAT’S WRONG: Lawmakers from both parties are cooking up legislation requiring companies like Colonial to tell the feds when they fall victim to a major cyber attack. The bills had been in the works before the Colonial attack, spurred on by the SolarWinds hack late last year, but the latest incident demonstrated how pressing the issue is.
Without reporting from companies, “the United States government is completely blind to what is happening,” Brandon Wales, the acting director of DHS’ Cybersecurity and Infrastructure Security Agency, told reporters on Thursday. “That just weakens our overall cyber posture across our entire country.” Wales told lawmakers last week that Colonial didn’t share details of the attack with CISA at first, though they did alert the FBI. The company offered data later in the week. Eric Geller and Martin Matishak have more for Pros.
Related: “Paying Cyber Ransoms Sets a Bad Precedent But Happens Often,” via Bloomberg.
NO THANKS: Five executives with fossil fuel producers have declined invitations to testify Wednesday before the House Natural Resources Oversight Subcommittee, according to a Democratic committee aide. The heads of Exxon, Devon and EOG Resources declined to participate, as did two officials from the Western Energy Alliance for a session entitled “Misuse of Taxpayer Dollars and Corporate Welfare in the Oil and Gas Industry.”
“The oil and gas industry gets billions in taxpayer-funded subsidies a year; their top executives owe an explanation to the American people about how they’re spending that money,” said Rep. Katie Porter, who chairs the subpanel, in a statement to ME. “Until families get the answers they deserve, Congress has a responsibility to keep asking questions." Fossil fuel officials declined a similar offer to appear at a Senate Budget Committee hearing led by Sen. Bernie Sanders earlier in April. More information on the hearing is available here.
GRANHOLM IN THE HOUSE: Energy Secretary Jennifer Granholm is back on the Hill on Wednesday to talk about the Energy Department’s fiscal 2022 budget request. Members on the House Energy and Commerce Committee will take advantage of the facetime with Granholm to ask about the Colonial Pipeline hacking. Ben also reports that Republicans on the House Science Committee were seeking briefings from the department on the hack.
CUTTING OUT THE MIDDLEMAN: The American Public Power Association, National Rural Electric Cooperative Association and Large Public Power Council pressed lawmakers Friday to allow direct pay to public power utilities and rural electric cooperatives for renewable and clean energy tax credits to help reshape generation and meet the president's climate goals.
Not-for-profit and tax-exempt community-owned electric utilities currently are excluded from being able to directly claim those credits and as a result only indirectly benefit through long-term power purchase agreements with developers and partners that can claim the credits, they argue.
"If the goal is to move toward a cleaner energy grid by providing tax incentives for developing clean energy generation, storage, transmission, and electric vehicle (EV) recharging infrastructure, federal incentives must be made available to all electricity providers," the groups wrote in a Friday letter.
AROUND THE AGENCIES
DEFINING EJ: The White House Environmental Justice Advisory Council proposed guidelines and clarified parameters for implementing President Joe Biden’s EJ goals Friday, setting goalposts to reaching Biden’s promise of targeting 40 percent of federal benefits for “vulnerable communities.” The recommendations said initiatives such as renewable energy, clean water programs and green housing could all qualify as federal benefits for the communities.
But the recommendations also rejected measures heralded by many of Biden’s allies as critical to reducing emissions, including carbon capture and storage, carbon trading and nuclear power. It’s another illustration of the fissure between left-flank and mainstream environmentalists, who are increasingly clashing on questions of political feasibility, aggressiveness on fossil fuels and commitments to frontline communities (Michael Grunwald went into the divide for POLITICO last week).
The White House interagency EJ council will be reviewing the recommendations in the coming weeks, according to the Council on Environmental Quality. Zack Colman breaks it down for Pros.
NEW RULES: FERC decided to consider downstream carbon dioxide emissions in certifying new pipeline projects during its March meeting. This week, the commission takes up certification of three natural gas pipelines, and Northern Natural Gas made a supplemental filing with FERC to preview the carbon impacts of a new pipeline project. The step "suggests companies are cooperating with FERC's new stance in the interest of winning approvals," Eric Wolff reports for Pros.
Cheniere’s Midship pipeline in Oklahoma and the Spire pipeline in Missouri will also be on the agenda, with both projects facing criticism from landowners who felt disrespected by operators. The Cheniere project was the subject of a House Oversight hearing earlier this month that blasted both the operators and FERC, saying they failed to protect landowners from reckless property damage. Eric has more on FERC’s agenda this week for Pros.
I OBJECT!: The parent company of 7-Eleven finalized a merger with Marathon Petroleum Corporation on Friday — a move Federal Trade Commission Chair Rebecca Slaughter found “troubling” and “illegal”. The deal closed while FTC was still deliberating and probing the merger, which its members feared would squeeze out competition from smaller gas stations in local markets.
“The Commission has spent significant resources investigating this transaction but has not yet come to an agreement with the parties and a majority of the Commission that would fully resolve the competitive concerns. Seven and Marathon’s decision to close under these circumstances is highly unusual, and we are extremely troubled by it,” Slaughter and Commissioner Rohit Chopra said in a statement.
Slaughter and Chopra warned that the companies have "closed their transaction at their own risk" and that the commission will continue to examine the deal. In response, 7-Eleven said it was "disappointed" by that statement and both companies insist they were legally allowed to close the transaction.
IN THE COURTS
COURT PUSHES STRICTER LEAD DUST RULES: The 9th U.S. Circuit Court of Appeals found EPA's standards for lead dust on windowsills and floors weren't "sufficient to protect health," echoing complaints form environmentalists who called for tightening limits set under the Trump administration. Annie Snider has more for Pros.
BEYOND THE BELTWAY
WHITMER’S WAPO WATER WORDS: Enbridge continues to flow oil through the Line 5 pipeline, defying Michigan Gov. Gretchen Whitmer’s deadline last week to shut the line down. Enbridge argues the governor has no authority to shut down the decades-old pipe and that it would only do so if ordered by a court or relevant federal regulator.
Whitmer turned to The Washington Post’s opinion pages on Friday to express her discontent. She continues her call on the line to close, saying its segments passing through the Straits of Mackinac pose a major environmental threat and promising to pursue disgorgement of profits the company earns while "trespassing" on state land. But the line’s operator and the Canadian government insist it is a vital piece of infrastructure and that shutting it down would cause more harm than good.
“Running pipelines through the water of the Great Lakes is, and always has been, a dangerous threat,” she wrote. “I will not sit idle as this time bomb keeps ticking.”
ROLE REVERSAL: A bold proposal by Republican Rep. Mike Simpson (R-Idaho) to breach four hydropower dams along the Snake River as part of a sweeping bid to save the region’s iconic salmon runs and revitalize local economies is coming under fire — from Washington state Democrats.
Gov. Jay Inslee and Sen. Patty Murray (D-Wash.) said Friday they appreciated Simpson’s plan, but called for a formal regional process to address the issue.
The two Washington state Republican House lawmakers whose districts are home to the dams at issue have opposed the plan from the beginning. But support has been building among Oregon Democrats in recent weeks, with Rep. Earl Blumenauer (D-Ore.) teaming up with Simpson for a recent virtual town hall on the proposal.
But persistent opposition from Murray, part of Democratic leadership and a member of the Senate Appropriations Committee, could be a death knell for the proposal.
The statement from Murray and Inslee drew a swift response from tribes and environmentalists that have been supportive of Simpson’s plan. “This is not a time for generic statements of support for treaty rights and Northwest Tribes,” said Nez Perce Tribe Chairman Samuel Penney, whose tribe earlier this month released a study showing that Snake River chinook salmon are nearing extinction.
SEMPRA SHAREHOLDERS SAY NO TO PARIS REPORT: Sempra Energy's shareholders rejected by a 2-1 margin a resolution that would require the company to issue a report on whether its lobbying activities align with the goals of the Paris Climate Accord to limit global warming. The failure of the measure, which was opposed by Sempra's board, cuts against the trend of successful climate resolutions in recent weeks at the annual shareholder meetings of Duke Energy and Unilever.
The Sempra resolution was also notable because one of the company's subsidiaries, Southern California Gas, has been under investigation by the California Public Utilities Commission's consumer advocates for spending ratepayer dollars on advocacy opposing stricter energy efficiency standards. Last month, a CPUC judge ordered SoCalGas to refund the misspent money to customers but declined to fine the company — a move environmentalists slammed as "a slap on the wrist for this kind of flagrant unlawfulness and climate obstruction."
MOVERS AND SHAKERS
Nick Loris is joining the Conservative Coalition for Climate Solutions (C3 Solutions) as vice president of public policy. Loris previously worked on energy and environmental policy issues at the Heritage Foundation.
— “EPA orders troubled St. Croix refinery shut,” via POLITICO.
— “Natural Gas, America’s No. 1 Power Source, Already Has a New Challenger: Batteries,” via The Wall Street Journal.
— “U.K. wants COP26 to kill coal,” via POLITICO.
THAT’S ALL FOR ME!
May 17, 2021
By Geof Koss and George Cahlink
The effort to strike a bipartisan deal on infrastructure will continue this week, as Republicans are readying a counteroffer, two congressional committees will hash out how to pay for it all and lawmakers are jockeying to get their wish lists inserted into a final package.
Following last week's White House summit between President Biden and top GOP senators, Republicans say they could have an infrastructure counteroffer soon.
Sen. Shelley Moore Capito (R-W.Va.), who is leading talks for Republicans, described the meeting as "very positive."
"We were trying to define for the president where we think physical core infrastructure is, and he agreed with a lot of that but not definitively so. And so we need to get to that," Capito, the ranking member on the Environment and Public Works Committee, told Fox News on Friday. She said the hope is to send Biden a revised plan early this week.
One key participant in the talks said the distance between the two parties remains wide over the scope of the package.
"What we're doing is looking at where the common ground might be," Transportation Secretary Pete Buttigieg said Friday during an event sponsored by The Washington Post.
"Obviously, there's a big difference in perspective on a lot of dimensions around infrastructure, including our definition, our broad definition, of what America's infrastructure needs really are," he added. "But there's also a lot that we can agree on."
Buttigieg reiterated Biden's desire for a bipartisan deal "to get as much support as we can, for a way forward."
"But this is that season for negotiation," he said. "And it's exactly what's happened: give and take, comparing ideas, and seeing where we might be able to come together."
Republicans last month offered a $568 billion infrastructure package focused on "traditional" infrastructure and financed by user fees. Biden wants to hike corporate tax rates from 21% to 28% over 15 years to pay for his $2.2 trillion infrastructure plan, the "American Jobs Plan."
But Republicans call changes to the 2017 tax overhaul a "red line" that cannot be crossed. On Friday, White House press secretary Jen Psaki reiterated that user fees would violate Biden's campaign pledge not to raise taxes on individuals making less than $400,000 a year.
"The president's pledge and his commitment, his line in the sand, his red line, wherever you want to call it, is that he will not raise taxes for people making less than $400,000 a year," Psaki told reporters. "User fees that have been proposed out there would violate that."
Her Friday remarks represented a turnabout from the previous day's briefing, during which Psaki said Biden's "only line in the sand is inaction" (E&E Daily, May 14).
House Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) said Friday he would mark up the surface transportation portion of the infrastructure package "soon" but declined to say it would move through his committee by Memorial Day.
"We are trying to get meaningful suggestions from the administration on changes they might like to see," DeFazio added.
House Democratic leaders have repeatedly said the legislation will pass the floor by July 4.
DeFazio also dismissed the initial Senate GOP infrastructure offer as far short of the mark.
"Their numbers are pathetic because they are baseline," he said. "It's a minuscule increase in highways and bridges. It's actually a 40% reduction in transit, and I can't remember how pathetic it is on rail, so, I mean, it's not a serious offer."
Interest groups and lawmakers continue to press their policy priorities as the infrastructure package comes together.
Rural electric cooperatives and publicly owned electric utilities on Friday urged congressional leaders to change federal laws to allow them to qualify for clean energy tax breaks.
"One of the most significant shortcomings of federal energy tax policy is that not-for-profit and tax-exempt community-owned electric utilities have been excluded from being able to directly claim these credits," wrote the National Rural Electric Cooperative Association, American Public Power Association and Large Public Power Council.
As a result, they say, their member utilities only indirectly benefit from energy tax breaks, typically through long-term power purchase agreements, which are "complex and expensive, and much of the value of the credits flow to the project developers and their investors rather than to the not-for-profit utilities and their customers."
They argue that the ambitious climate goals of the Biden administration and Democrats in Congress "cannot be met by leaving nearly 30 percent of the nation's electric utility customers without access to incentives and support."
Individual lawmakers continue to introduce infrastructure-focused bills in the hopes they will catch a ride in a bigger package. Last week, Sen. Jeanne Shaheen (D-N.H.) reintroduced legislation to repair and replace bridges in poor condition.
The "Strengthen and Fortify Existing (SAFE) Bridges Act" would authorize $2.75 billion annually for a program focused on fixing bridges, which are eligible for funds under current surface transportation programs but lack a dedicated funding source.
"My bill would rehabilitate crumbling bridge infrastructure — presenting an opportunity to both strengthen our public safety and create jobs," Shaheen said in a statement, which noted that more than 8% of Granite State bridges are structurally deficient.
In the House, Rep. Bobby Rush (D-Ill.) on Friday introduced legislation to create a Civilian Conservation Corps modeled after the Great Depression-era program of the same name.
The "Restore Employment in Natural and Environmental Work (RENEW) Conservation Corps Act," H.R. 3220, would authorize $55.8 billion over five years for the program, to be jointly administered by the departments of the Interior and Agriculture.
It would offer individuals 16 years or older training for positions lasting between three months and one year on projects including tree planting, restoring wildlife habitat and streams, prescribed burns, and trail maintenance.
All participants would receive a minimum wage of $15 an hour, with eligibility for up to a $5,500 credit for postsecondary education after a full year of work.
"As we continue to climb out of the worst economic crisis since the Great Depression, a new civilian climate corps is a terrific and deeply practical way to put Americans to work while at the same time restoring our public lands, addressing climate change, and investing in our juggernaut outdoor recreation economy," Rush said in a statement.
Senate Majority Whip Dick Durbin (D-Ill.) introduced companion legislation in April (E&E Daily, April 27).
Meanwhile, Senate Intelligence Chairman Mark Warner (D-Va.), on Gray TV's "Full Court Press" over the weekend, suggested that the recent Colonial pipeline attack and subsequent fuel shortages are helping to build bipartisan support for legislation that would require companies to report cyberattacks on critical infrastructure.
"This is a critical, critical threat," he said. "I think that the signs of those gas lines brought it home to the American people in a very real way."
Warner added that allowing for limited immunity and confidentiality for those companies reporting the attacks would be a crucial element to the deal.
How to pay for it all
Multiple House and Senate committees this week will delve into the thorniest question underlying the infrastructure push: how to pay for it.
The differences between the two parties will be on display tomorrow morning, when the Senate Finance Committee — which has jurisdiction over revenue matters — holds a hearing on funding and financing options for infrastructure.
Its House counterpart — the tax-writing Ways and Means Committee — will hold a similar hearing Wednesday morning.
On Thursday, the Senate Banking, Housing and Urban Affairs Committee will hold a hearing on "21st Century Communities: Expanding Opportunity Through Infrastructure Investments." Slated to testify are Housing and Urban Development Secretary Marcia Fudge and Buttigieg.