APPA Washington Report

WASHINGTON REPORT/MAY 2015

Making Sure Public Power’s Voice Is Heard as Congress Takes Up Energy Legislation

The American Public Power Association is making sure that the voice of public power is heard in the halls of Congress as lawmakers start to consider a large number of energy-related legislative proposals and hold related hearings in the Senate and House of Representatives.

"As the House and Senate take up comprehensive energy policy bills for the first time in a decade, the perspective of not-for-profit, community-owned public power utilities is wanted and needed in the development of this legislation," said APPA’s Senior Vice President of Legislative and Political Affairs, Joy Ditto. "Locally owned and operated public power utilities prioritize the affordable, reliable provision of electricity, with appropriate environmental stewardship, to their customers in the 49 states in which they operate. This local, customer-focused viewpoint is one that Congress very much needs to understand and embrace."

Earlier this year, the House Energy and Commerce Committee unveiled a legislative framework for a comprehensive energy package. The committee, chaired by Rep. Fred Upton, R-Mich., is in the process of releasing a series of discussion drafts that address four key policy areas: modernizing infrastructure, a 21st century energy workforce, energy diplomacy, and efficiency and accountability.

In May, close to 100 legislative proposals were introduced by Sen. Lisa Murkowski, R-Alaska, chair of the Senate Energy and Natural Resources Committee; Ranking Member Maria Cantwell, D-Wash.; and other senators on the committee to modernize America’s energy policies. Murkowski encouraged introducing these proposals in advance of a broad energy bill she is assembling in consultation with bipartisan committee members.

As part of the legislative process, hearings are now underway on Capitol Hill to examine specific proposals that address a number of issues of importance to public power utilities.

APPA's Kelly calls for hydro licensing and capacity market reforms

On May 19, the Senate Energy and Natural Resources Committee convened a hearing on proposed bipartisan energy supply legislation.

At the hearing, APPA President and CEO Sue Kelly emphasized the need to reform mandatory capacity markets, to simplify and coordinate hydropower licensing, and to avoid imposing a federal renewable electricity standard on utilities.

Kelly said the current hydropower licensing process needs to be overhauled. "Right now, public power and other utilities cannot increase their investment in emissions-free hydropower without protracted resource agency reviews," she said. She said APPA supports the concepts set out in S.1236, which reform the regulatory process for licensing hydropower projects, and that the Federal Energy Regulatory Commission "should be the lead agency overseeing the process, and it should be able to establish and enforce deadlines for other federal and state agencies involved in that process."

In addition, Kelly used the hearing to address mandatory capacity markets in the eastern regional transmission organizations.

She noted that, while legislation recently proposed in the Senate to address these regulatory constructs kicks off "a much-needed dialogue," APPA believes there is "already more than enough information to support changes."

APPA has recommended that FERC phase out mandatory capacity constructs over time and replace them with voluntary, residual capacity markets.

"But, in the meantime, we propose two fixes," Kelly said. "First, RTOs that have not yet implemented mandatory capacity markets should not do so without unanimous support of the states in their regions. Second, RTOs that already have mandatory capacity markets should not impair the ability of retail utilities or states to self-supply their capacity obligations."

On the same day Kelly appeared at the Senate hearing, members of the House Energy and Commerce Subcommittee on Energy and Power held a hearing to examine a legislative "discussion draft" that addresses energy reliability and security.

APPA submitted a statement for the hearing. While noting that it supports many elements of the discussion draft, APPA also offered suggested changes to some of the legislative language.

Among other things, APPA said it was concerned that a section of the discussion draft could open the door for the expansion of mandatory capacity markets. This echoes a concern that Kelly voiced in her Senate testimony. Specifically, she said that APPA is concerned that owners of generation in regions without mandatory capacity markets could use a Senate legislative proposal "to advocate for these constructs in their RTO regions."

Among the panelists at the hearing was John Di Stasio, president of the Large Public Power Council. Other witnesses were Michael Bardee, director of FERC's Office of Electric Reliability; Gerry Cauley, president and CEO of the North American Electric Reliability Corporation; and officials from investor-owned utilities, wind power and environmental groups, and the National Electrical Manufacturers Association.

APPA weighs in on House hydro, pipeline legislative proposals

APPA also voiced support for two pieces of draft legislation that were the topic of a May 13 hearing held by the Energy and Commerce Committee’s Subcommittee on Energy and Power. One measure would streamline hydro licensing and relicensing, while a second bill seeks to streamline the permitting process for natural gas pipelines.

Both of the draft discussion bills would "make critical improvements to licensing and permitting processes so that new hydropower and natural gas generation — two cornerstones of the reliable operation of the nation’s power grid — can be brought on line to supply adequate power" as new sources of generation are needed in the years ahead, APPA said in a statement for the hearing record.

Developing more hydropower should be a key part of U.S. energy policy, a longtime public power official told the hearing. Changes are needed to help make that happen, said John Suloway, who testified on behalf of the National Hydropower Association.

There is significant potential for increased hydro capacity in the United States, but it is not being realized, said Suloway, who retired from the New York Power Authority at the end of last year after serving as vice present of project development, licensing, and compliance.