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Municipal bonds, transmission cost allocation are among subjects of APPA policy resolutions

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APPA’s Legislative & Resolutions Committee on March 12 approved seven policy resolutions at the association's annual Legislative Rally, including resolutions supporting municipal bonds and calling for the Federal Energy Regulatory Commission to adopt equitable and supported measures for allocating the cost of new transmission projects.

The resolution on municipal bonds expresses APPA's opposition to any efforts to interfere with local governing decisions by taxing, wholly or in part, the interest on municipal bonds. That includes a surtax on municipal bond interest for bondholders with incomes above a certain level; a tax on municipal bond interest above a certain annual dollar limit; and replacement of municipal bonds with "direct payment" bonds or "tax credit" bonds, the resolution said.

FERC should adhere to the courts’ interpretation of the Federal Power Act in approving cost allocation policies for new transmission, APPA said. "An articulate and plausible reason should exist to believe that the benefits received will be roughly commensurate with the costs to be assigned," the resolution said. Noting that rate incentives may prompt construction of surplus transmission at excessive cost, the resolution opposes any FERC policy that will lead to overbuilding of new transmission.

Delegates hold up their ballot cards to vote during yesterday's Legislative & Resolutions Committee meeting in Washington, D.C. Photo by Dennis Brack

Another resolution approved by the committee urges the Commodity Futures Trading Commission—or Congress—to exempt government utilities from the swap dealer rule’s $25 million special entity threshold or otherwise provide counterparties the certainty they need to enter into hedging transactions with government-owned utilities.

APPA members also called on Congress to amend the Natural Gas Act to provide for refunds under Section 5 of the act on a basis comparable to the refund provisions of the Federal Power Act.

A resolution on capacity markets calls for revision of all provisions in regional transmission organization tariffs that impede the ability of public power utilities to self-supply and opposes the creation of new capacity markets or new RTOs in any region of the country.

APPA will work with its members, other utility associations and federal agencies to enhance communication and information-sharing during preparation and recovery from disasters, says a resolution on mutual aid. The association also will continue to educate and encourage all members to have mutual aid agreements and be ready to assist other public power utilities in time of need.

A resolution on hydro power supports preservation of existing hydro capacity and operational flexibility, and calls for a streamlined process for upgrading or expanding existing projects. The resolution calls for agencies to coordinate on mandatory conditions for projects and to provide a rationale for all mandatory conditions.

A resolution on fracking requirements for natural gas extraction was withdrawn and will be considered by APPA's CEO Climate Change and Generation Policy Task Force.

The approved resolutions are available at

The resolutions will serve as interim policy for the association until approved by APPA members at APPA's National Conference, June 14-19, in Nashville, Tenn. —ROBERT VARELA


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