LPPC In The News

View recent news coverage highlighting interviews and quotes from LPPC. 

 

 

May 17, 2021

By Matthew Choi

Defending from Future Cyber Attacks

QUICK FIX

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 mchoi@politico.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.

THE GRID 
— “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!

 

January 1, 2021

Saluting the Workforce at Large Public Power Council

(Full interview available via the PDF below)

Do you know what the Large Public Power Council is? While not as well-known as the American Public Power Association, of which all twenty-seven LPPC members are a part of too, LPPC enables the twenty-seven largest to collaborate on matters characteristic of their scale. They together employ fifty-two thousand people and own seventy-two thousand megawatts of generating capacity.

Washington has six LPPC utilities, Chelan County PUD No. 1, Clark Public Utilities, Grant PUD, Seattle City Light, Snohomish County PUD No. 1, and Tacoma Public Utilities, more than any other state. By the way, PUD stands for Public Utility District. California and Texas have three LPPC utilities apiece, Imperial Irrigation District, Los Angeles Department of Water and Power, and Sacramento Municipal Utility District in the Golden State and Austin Energy, CPS Energy, and Lower Colorado River Authority in the Lone Star State. Colorado, Florida, Nebraska, and New York have two apiece, Colorado Springs Utilities, Platte River Power Authority, Jacksonville Electric Authority, Orlando Utilities Commission, Nebraska Public Power District, Omaha Public Power District, Long Island Power Authority and New York Power Authority. The remaining LPPC utilities are American Municipal Power, ElectriCities of North Carolina, Grand River Dam Authority, MEAG Power, Puerto Rico Electric Power Authority, Salt River Project, and Santee Cooper.

The PUF team recently caught up with John Di Stasio, the president of LPPC. This time he talked with us about the remarkable accomplishments of those fifty-five thousand people, the workforce of the large public powers.

Read the full interview in the attached PDF.

 

 

 

September 11, 2020

By Emma Penrod

Public Power Leaders See Lasting Effects from 2020 Disruptions with New Approaches to Resilience, Equity

DIVE BRIEF
The aftermath of COVID-19 and social unrest in 2020 could make 2021 a year of unprecedented change and innovation in the power sector, the heads of three large public power companies said during a Wednesday panel organized by the Large Public Power Council and Women's Council on Energy and the Environment.

Some of the major themes this year, including resilience, sustainability and social justice, will continue to dominate energy industry efforts in 2021, executives said. At the same time, COVID-19 has highlighted the need for flexibility, and multiple executives say teleworking is likely here to stay.

“What I've seen previously are mostly changes driven by regulatory policy,” said Jolene Thompson, president and CEO of Ohio-based American Municipal Power. “Today what we're seeing is more driven by what consumers want and what technology has become available."

DIVE INSIGHT
The panel tapped the heads of Tacoma Power and Austin Energy, along with American Municipal Power, to discuss how the events of 2020 will shape the industry in 2021 and beyond. While they said their overall goals of sustainability, resilience and equity have not changed, they noted that 2020 may change the way they approach them, including by making innovation a priority.

“In my view, the technology changes are more revolutionary than the past 30 years of changes," Thompson said.

While COVID-19 forced Thompson and her fellow panelists to move to a remote workforce, she and the others agreed that remote work is likely here to stay.

“We pushed everyone out of an office over two weeks,” Jackie Flowers, director of Tacoma Public Utilities, said. While it took time for everyone to adjust, “we found real potential for us to incorporate it into our workplace culture. Our employees love it.”

Jackie Sargent, general manager of Austin Energy, said the shift to remote work has improved the company's customer relations because the flexibility has improved employee morale.

Thompson concurred that remote work is likely here to stay. "I don't think the new normal is going to look like the old normal," she said.

While COVID-19 has slowed certain projects, the executives said investments in sustainability and innovative new technologies will continue.

Flowers said Tacoma Utilities's plan to achieve its zero-emissions goal by 2045 remains on track, as are plans to make investments in electric vehicles and emerging solutions such as hydrogen fuel.

All three executives expressed particular enthusiasm for energy storage, but they also saw a need for additional innovation to accelerate its adoption.

“As we see energy storage evolve, we're going to see a need for distribution system operators, similar to what we have on the transmission side today,” Sargent said. “There will be a need for some kind of collaboration between those to ensure we maintain the overall reliability of the system.”

They said the civil unrest of 2020 has also spurred them to consider the role of their own organizations in supporting systemic racism, and to consider creative solutions. Flowers said Tacoma Public Utilities has used data to build an “equity index," which revealed that disadvantaged communities have suffered from a lack of infrastructure investment.

“In some cases that has led to cutting corners, in particular for water,” Flowers said. “We're using that data to inform us whether or not we may have impacts to customers in terms of their service lines not being up to snuff.”

Tacoma Public Utilities is developing a program that would make loans and grants available to residents impacted by these funding disparities, she said.

“We would like to be able to tie that to any discriminatory acts that occurred historically, but the state constitution only allows income-based standards,” she said.

August 27, 2020

By Lisa Martine Jenkins

Worldwide Denial-of-Service Cyberattacks on Utilities Up Five-Fold This Summer, Data Shows

As the societal disruptions of 2020 continue to pile up, cyberattackers have taken advantage of the chaos, with certain types of attacks against utilities spiking five-fold in recent months, according to data provided to Morning Consult by the analytics firm NETSCOUT. Those who work in and with the utilities  themselves, however, have expressed little concern about this surge, reporting that the cyber threats have not impacted their security of service.

NETSCOUT, which maintains a Cyber Threat Horizon tracker in real time, recorded 1,780 “distributed denial-of-service” attacks against utilities worldwide between June 15 and Aug. 21, representing a 595 percent year-over-year increase. A DDoS attack uses multiple platforms in an attempt to flood a target’s system and render it unavailable, often through repeating a request or ping to such a degree that a target — in this case a utility — is overwhelmed.  

The marked increase in DDoS attacks on utilities worldwide, including both electric and gas systems, have come amid the coronavirus pandemic and other sources of upheaval, as measured by the attacks’ frequency, volume and speed. And DDoS is not the only type of cyberattack on the rise: The Federal Bureau of Investigation recently warned the U.S. energy sector of a new hacking threat from the Russian hacker group known as APT28, or Fancy Bear, that has used a wide range of approaches.

Roland Dobbins, principal engineer for NETSCOUT’s security division Arbor Networks, attributed cyberattacks writ large to a number of potential motivations, including ideological, geopolitical, extortive, destructive and even nihilistic ones.

“Some people just love to cause harm, and what better way to do so than being able to shut down power for thousands or tens of thousands,” Dobbins said in an email. 

While cyberattacks tend to increase annually by all measures simply as a function of the advancement of the technology and sophistication of the criminals, this year’s jump in attacks has been unprecedented. According to exclusive analysis provided to Morning Consult from Dobbins’ colleague Richard Hummel, who manages threat research for Arbor Networks, 2020 has so far seen double the attacks that 2019 did — roughly 3,100 through Aug. 21 compared with about 1,500 during the same period last year.

The attackers have also upped both the bandwidth size and the speed of their attempts. One entity in the Netherlands saw an attack of 88.4 gigabytes per second — in contrast with the 2019 maximum of 21.1 Gbps — while another in Italy faced an attack with a throughput of 11 million packets per second, up from the 2019 maximum of 5 Mpps. 

Brandon Robinson, a partner at Balch & Bingham LLP in Birmingham, Ala., who focuses largely on utilities, said the sector has always been a target of cyberattacks.

“Whether one’s motivation is to do financial, economic, national security or industry harm, critical infrastructure such as the electric grid can be a natural target for such cyberattackers,” he said.

And citing the North American Electric Reliability Corp.’s 2019 report, Robinson added that the industry has consistently done a good job of defending itself “and are continuing to be vigilant in doing so as threats emerge and evolve.

Meanwhile, Sharon Chand, a principal with Deloitte & Touche LLP’s cyber practice who focuses on critical infrastructure protection, said that a year-over-year increase in these attacks is very normal, though things have “certainly taken a steeper climb over the last several months.” She sees this as likely the result of a combination of factors contributing to a “heightened sense of disruption”: the global pandemic, economic uncertainty and even more time on the hands of the attackers.

Robinson also said an increase in attacks on the power sector could be impacted by more concrete changes to the grid itself, divorced from society’s climate of uncertainty. 

“The electric grid is also evolving,” he said, “as we see an evolution from larger, more centralized resources to more distributed resources, and virtualized, remote control of those resources, which call for and have led to adaptation in the way that connectivity between and control of grid resources is protected.”

However, the reaction from utilities has largely been detached. John Di Stasio, president of the Large Public Power Council, acknowledged that attacks “may have increased in 2020” but said that utilities are regularly planning for disruptions and even participating in drills to identify and mitigate risks. Edison Electric Institute, a leading trade group representing U.S. investor-owned electric companies, did not respond to a request for comment.

“Despite the increase, LPPC members were and continue to be well-prepared to deal with these threats,” Di Stasio said, in reference to the consumer-owned utilities that make up the trade association. “Cybersecurity risk will continue to evolve, requiring our defense capabilities to evolve accordingly.” 

Chand points out that, especially as the grid evolves to utilize diverse energy sources, including certain types of renewables, redundancies are built into its system to provide consistent power to consumers: If it is not a windy day, for instance, a utility that typically uses wind power can rely more on its nuclear or coal assets. Analogous redundancies protect the system from cyberattacks: “As one piece of the grid may experience a challenge, the grid is built in a way to accommodate that,” she said. 

However, industry-wide analysis indicates that by some measures, cyber threats are shifting faster than the industry can respond. An October 2019 survey from Siemens AG and the Ponemon Institute of utilities professionals worldwide found that operational technology, rather than informational technology, was particularly vulnerable to cyberattacks, and that 56 percent report at least one shutdown or operational data loss per year. Less than half (42 percent) rated their “cyber readiness,” or their capabilities as compared with anticipated attacks and known preparedness gaps, as high. And smaller organizations reported that they felt less confident in their cyber capabilities than their larger counterparts.

“Attackers become more motivated, attackers become more creative, they become more automated,” Chand said of the pattern of increased attacks. “And so, to a large extent, we expect to see an increase in the numbers of threats — denial-of-service attacks or others — facing all of our clients across the business every year. And I think we’re not going to see it go down anytime soon.”

 

July 22, 2020

By Lisa Martine Jenkins

Utilities Coalition Letter Rallies Congress to Include Support for Public Power in Coronavirus Stimulus

The Large Public Power Council has delivered a letter encouraging House and Senate leaders to support consumer-owned power utilities in future COVID-19 recovery stimulus legislation. 
The association — which represents 27 of the largest consumer-owned power utilities in the United States — flagged for leadership a number of infrastructure-related public power provisions that have already been passed in the House via the now-stalled Moving Forward Act (which is currently being considered in the Senate, though Majority Leader Mitch McConnell has said he won’t bring it to the floor). 

“Without federal support, continued economic distress will make it difficult for public power utilities to continue providing reliable and affordable electricity to our 30 million customers and to invest in the electricity infrastructure of the future,” LPPC President John Di Stasio wrote in his letter to McConnell (R-Ky.), Senate Minority Leader Chuck Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.).

The association’s proposals include restoring advance refunding for municipal bonds, which state and local governments used to lower the cost of borrowing funds for infrastructure projects prior to changes made in 2017. And the group also recommends that lawmakers authorize the Build America Bonds program, which expired in 2010 after they assisted public power utilities to invest over $100 billion on energy infrastructure following the 2008 recession.

Because LPPC represents nonprofit utilities, its members cannot take advantage of the tax incentives available to for-profit companies investing in renewable infrastructure. They must instead partner with third parties in order to monetize those incentives, which the letter said can be “costly and result in public power not directly owning the renewable energy facility.” LPPC instead proposes including credit monetization provisions for renewable energy projects, such as credit refundability, transferability or direct payment, in stimulus funding.

Also among the requests are measures that would support electric grid modernization — in order to increase energy efficiency and lower electricity costs — as well as expand that grid to include vehicle electrification.

Some of these appeals echo another letter LPPC sent in April, which highlighted immediate assistance to low-income customers struggling to pay the bills in the thick of the pandemic as well as using federal emergency funds to cover pandemic-related costs. It also addressed the issue of Build America and municipal bonds, as well as infrastructure support. However, Di Stasio told Morning Consult that the “uneven circumstances” across the country when it comes to communities and states reopening has led LPPC to be more forward-looking.

“Now we’re starting to look at what I would call the ‘reentry activities’” in light of economic and operational fallout from the pandemic, Di Stasio said. “Some of the things that we were asking for in our letter are things that will provide us the ability to provide economic stimulus to our community.”

Di Stasio said he and the rest of LPPC have been in consistent communication with lawmakers, and he believes that the public power sector’s priorities are understood and supported on Capitol Hill, in a broadly bipartisan fashion. 

He describes his outlook as “optimistic” and in fact is already considering what a more official “end” to the pandemic might look like for LPPC members. The association’s next order of business, Di Stasio said, will be opening another conversation with lawmakers: getting essential infrastructure workers such as power utilities employees a coronavirus vaccine as soon as it’s available. 

“Presuming this gets done and some of our interests get satisfied, then we probably will pivot to: ‘What do things start to look like when there is a vaccine available, and how do we ensure that we can maintain the safety of our employees that operate the grid?’” he said.

 

July 16, 2020

By John Di Stasio

A Public Power Perspective on Cybersecurity 

Electricity is an essential element of every life powering homes, businesses and the national economy. In an increasingly digitized world, effectively managing cybersecurity has become critical to the reliability of the grid and the protection of data. While there are many forms of utility business models, public power systems often operate as part of a larger municipality, as a political subdivision of a state and frequently are formed to serve many smaller municipalities. Given these constructs and the realities of operating a public purpose business, the challenges can be unique.

Over the past fifteen or so years, the electric utility industry began moving to a more formal and regulated approach to the reliability and security of the grid. Reliability and security have always been the cornerstone of the industry, but management of the interconnected grid was maintained system by system with regional coordination. In 2007, the national electric reliability was established as a mandatory reliability and security organization to heighten the coordination of the nation’s interconnected bulk electrical networks and ensure best practice through a set of mandatory enforceable reliability standards.

Since that time, the industry, using the mandatory standards as the foundation, has built additional layers of voluntary best practice guidance and significantly expanded the focus on cybersecurity. As public power utilities, this required adaptations in our governance and communications to ensure that we maintained the public transparency and accountability balanced with the security of critical operational information and the reporting of identified risks. Active benchmarking also began to occur, industry coordination and collaboration with government increased and maturity models provided a roadmap to assess an organization’s cybersecurity readiness.

While cybersecurity readiness has grown significantly over the past several years, built upon this platform of mandatory and voluntary actions, the risks continue to evolve requiring continued engagement, assessment and timely actions to ensure that the security gains that have been achieved do not less effective over time. The recent pandemic-related increase in remote working is an example of a changing condition that introduces a new risk given the volume of data being exchanged via remote network access. Proprietary networks have given way to the internet of things with the promise that the number of connected and interactive devices will continue to grow over time.

Public power, like all utility business models, accept that core reliability is the price of entry in our industry and fundamental to everything we do. Cybersecurity has emerged as a significant risk that must be actively managed to ensure that reliability is maintained. We will continue to evolve our capabilities as new threats emerge, build upon our technical expertise and the expertise of the broader collaboration between industry and government and adapt our governance as public entities to ensure that we are secure, nimble and transparent.

John Di Stasio, President, Large Public Power Council (LPPC)

July 10, 2020

By Andrew Coen

Power Utilities Still Plan Capital Improvements 

Financial challenges posed by the COVID-19 pandemic have not slowed long-term capital initiatives at some of the nation’s largest public power utilities.

“Our board, despite the economic times, is not giving me any breaks in terms of what they expect us to achieve,” Long Island Power Authority CEO Tom Falcone said Thursday during a digital forum hosted by S&P Global Ratings and the Large Public Power Council. “We may defer some new things, we may slow down some spending, but we’re not cutting into the bone.”

Falcone said while LIPA is deferring $60 million of capital spending the next two years, the utility remains committed to carrying out future projects aimed at improving the utility’s resilience and clean energy infrastructure. LIPA, which services around 1.1 million customers in the New York City region, is in the midst of constructing a $176 million underground transmission line in Nassau County to meet national reliability standards that will be funded through bonds.

LIPA’s debt is rated A2 by Moody’s Investors Service and A by S&P and Fitch Ratings, with stable outlooks. The utility has the highest credit ratings in its 34-year history following three one-notch upgrades last year ahead of a $485 million electric system revenue bond sale.

Jackie Flowers, CEO and director of Tacoma Public Utilities in the state of Washington, said during Thursday's forum her the power organization is prioritizing capital goals that are “critical” to its operations. TPU, which services around 200,000 customers, is on track to install new smart meters and remains committed to tackling other long-range projects, she said.

“I don’t see it as a long-term impact,” she said of forging ahead with most future capital projects despite the near-term challenges brought on by the pandemic. “With our current projections on declining load we are working to access what projects we want to continue to move forward with this year.”

TPU is rated Aa3 by Moody’s, AA by S&P and AA-minus by Fitch. All assign stable outlooks.

Gil C. Quiniones, president and CEO of the New York Power Authority, said the utility plans to proceed with at least two-thirds of its scheduled infrastructure projects after pausing some capital plans during the onset of COVID-19 in March. NYPA, which is the nation's largest public power utility, issued $1.2 billion of long-term bonds in late April to fund future green energy initiatives and refinance existing debt.

“We wanted to make sure that we were ready to deal with whatever this pandemic emergency will be throwing at us along the way,” he said about the borrowing, which featured around $800 million of green bonds.

NYPA’s bonds are rated AA by S&P and Fitch with a stable outlook. Moody’s Investors rates the utility one notch higher at Aa1, with a negative outlook.

S&P revised its outlook for U.S. public power utilities to negative from stable in April, citing risks that COVID-19 would cut away at already depleted financial cushions facing many agencies. The outlook change occurred just three months after S&P assigned a stable outlook to the sector due to the essentiality of electric service.

“The pandemic’s widespread pronounced and sudden economic declines called into the question the resilience of some key fundamentals of public power utilities’ credit quality,” said S&P credit analyst David Bodek “The pandemic and recession raised questions whether business shutdowns and high unemployment could compromise historically inelastic demand for electricity.”

 
 

July 10, 2020

Megawatt Daily

  • LPPC points to challenges in the fall
  • S&P warns of a hot summer
     

Public power utilities in the US have, like everyone else, faced high unemployment and the economic slowdown brought on by the coronavirus pandemic, but they have felt a “relatively small impact,” according to the chairman of the Large Public Power Council. Dan Sullivan, the chairman of the LPPC and president and CEO of Grand River Dam Authority in Oklahoma, said the main message put out during Thursday webcast hosted by the council was that the public power industry has been “resilient and has weathered the storm.”

There have been delays in some capital and O&M projects because public power utilities were reluctant to send large crews out into the pandemic, he said, “but some of this activity has been picking up.”

There could, however, be “challenges” in the autumn shoulder months when outages are typically scheduled.

Sullivan said much depends on the “dynamics of where you are and who you serve.” He said that retail and commercial customers have generally been hardest hit, while heavy industry has generally been deemed “essential.”

During the early months of the pandemic the decline in demand for power ran into the double-digits, Sullivan said. Now, he said, there is 
“minimal degradation of demand—certainly in the single digits.”

He said much depends on the “dynamics of where you are and who you serve,” and what your mix is of retail and commercial customers. The Southwest Power Pool has a 3% to 5% range of demand decline, he said. “Our utility—based in Pryor, Oklahoma is much less.”


May 27, 2020

By Ralph Cavanagh and John Di Stasio

The (Energy) Efficient Road to Small Business Recovery

The road to recovery for the backbone of the American economy, our small businesses, will be long and arduous as the nation continues to grapple with an incalculable public health and jobs emergency. Our federal policymakers took strong actions to address the immediate needs of small businesses and their employees during the economic shutdown.

Now, with the country reopening, our federal leaders must find innovative ways to continue to support these businesses, which deliver half of the country’s GDP and employ half of our workforce, as they claw back from the human and financial devastation wrought by COVID-19. 

This issue is very much on the table as Congress considers its next COVID interventions. We believe that if policymakers approach this problem as an opportunity not only to help our economy recover, but to make it stronger, more energy productive, more equitable and more sustainable, everyone — not just small businesses — will reap the benefits, including cleaner air and lower energy system costs.

One novel approach that meets these goals would be to establish a Small Business Energy Efficiency Grant program, as called for by the Alliance to Save Energy, that would provide federal grants to electric and natural gas utilities (and institutional partners) and supplement available utility incentives to encourage small businesses — especially minority businesses and underserved communities — to make zero-cost energy efficiency upgrades to their facilities.

Such an initiative will immediately and permanently lower their operating expenses, which will help keep paychecks flowing. We will need efficiency workers to implement the upgrades, putting them back to work and improving the general economy.

Fully 75% of America’s utilities already run programs that help their customers, including small businesses, to reduce energy use and lower monthly bills. These programs offer an established conduit for reaching small businesses across the nation. But even in the best of economic times and with substantial incentives, small businesses struggle to come up with their share of the capital needed to make energy efficiency upgrades.

In today’s economic environment, small businesses are unlikely to use scarce internal funding for such work, even when they realize it could reduce their monthly utility bills by 30% to 40%. By providing grants to America’s utilities to take the costs for these efficiency upgrades down to zero, Congress will ensure that the benefits are much more widely shared. 

And because utility energy efficiency programs rely extensively on small businesses, such a partnership between the federal government and utilities also could help their employees get back to work quickly. Sadly, America’s energy efficiency workforce of more than 2.3 million has been hit harder than workers in any other segment of the clean energy industry, with a recent report from E2 and others finding that more than 413,000 efficiency workers lost their jobs in March and April.

A federal grant program to supplement available utility incentives would result in a high leverage of federal funding; small businesses that are better able to afford and pay their utility bills; the reinstatement and creation of energy efficiency jobs; and macro-economic and societal benefits through overall reductions in energy use and its associated environmental impacts.

Such a program represents the type of innovative but practical policy solutions that we believe can not only get our economy going again, but also make it more productive, more equitable and more sustainable for the future. We hope our federal policymakers agree and take action.

May 13, 2020

By John Di Stasio 

Hidden Heroes Keeping The Lights On

When most of us flip on a light switch, we often don’t give it a second thought — we just expect it to work. But imagine if the power went out. In this new socially distant reality of ours, where most of us scarcely leave home, a power outage would create chaos and sever our connection to family, friends and work.

Reliable electricity is the common thread running through our new remote lifestyles, and thankfully there are utility company employees across the country working to make sure our homes, businesses and communities remain powered.

Engineers, systems operators, lineworkers, and the list goes on. Highly trained, these women and men are unsung heroes. They oversee the operation of thousands of power plants and millions of miles of transmission and distribution lines across America. They put their community’s needs above their own and keep us all connected.

Governed by local communities, public power systems are highly in tune with and responsive to the needs of their customers — it’s why we often say that that community is at the heart of public power’s mission to deliver reliable electricity.

The members of the Large Public Power Council, 27 of our nation’s largest nonprofit public power systems, are ensuring continuity of service for their collective 30 million customers while keeping workers healthy and safe, particularly those who are mission-critical and have to remain onsite.

From Seattle City Light to New York Power Authority, LPPC members were on the front lines as coronavirus first hit our country. As participants of our nation’s diverse municipal landscape, they worked with local and state governments, supported their communities, and kept the power on for millions across America.

Our members acted quickly to alleviate the financial burden experienced by families, businesses, and communities as a result of the pandemic. They suspended disconnects voluntarily, reconnected those already disconnected and are now offering a wide variety of options to help their customers through this time of hardship — including the waiving of late fees, expansion of assistance programs, and introduction of flexible payment plans.

However, with over 33 million Americans already filing for unemployment benefits since the pandemic took hold, we know that further financial assistance is needed to ensure families can power, heat, and cool their homes as the economic fallout from the pandemic persists.

LPPC members urge Congress to act and provide federal support for customers paying their bills. One example, the Low Income Home Energy Assistance Program, is a time-tested financial lifeline that helps hard-working Americans keep their lights on during challenging times.

The National Energy Assistance Directors’ Association recommends that Congress provide an additional $4.3 billion for LIHEAP in the next coronavirus relief package. The National Energy and Utility Affordability Coalition believes that these funds will allow states to serve approximately 11 million households, including newly laid-off workers, low-income families who were already struggling financially before this crisis and households with elderly members or pre-existing medical conditions who are sheltering in place with inadequate cooling measures at home. Just like the passage of direct relief for small business benefited the customers of public power, so too will the passage of this much-needed LIHEAP funding.

In contrast, any federally mandated disconnect or credit and collections policies will place public power systems and, in turn, our customers under further financial strain. While the motivations behind such policies are well intended, there are serious ramifications.

These one-size-fits-all policies limit flexibility and undermine public power’s ability to continue helping those in need. Instead, Congress ought to provide tangible support to struggling Americans through programs such as LIHEAP, offering certainty for both business and consumer.

As the pandemic progresses and the financial implications are brought to bear, the utility industry will experience difficulty reconciling a loss of load and an increase in financially distressed customers in need of aid. While public power, along with our dedicated utility workers, will continue to put their communities first and keep the nation’s lights on, we hope to see Congress act soon and provide federal support for those Americans struggling to pay their bills.

A 35-year veteran of the utility industry and the former general manager and CEO of Sacramento Municipal Utility District, John Di Stasio is the president of the Large Public Power Council, where he advocates for America’s largest public power systems in Washington, D.C.

Pages