CEO’s Report: Election’s impact on public power

A lot has happened since the election took place less than a month ago. While the full transition takes place in January, there is already a lot of chatter about the impact on our industry.

Areas of biggest concern are what will become of federal programs, tax cuts and regulations.

The simple answer is nothing is known currently, but there is plenty of speculation.

President Trump has moved quickly in nominating his cabinet picks. South Dakota was in the spotlight as Governor Kristi Noem was appointed to lead the Department of Homeland Security. If confirmed, she will step down as governor. Lieutenant Governor Larry Rhoden will fill out the remainder of her term.

Meanwhile, Senator John Thune was selected as leader of the Republican party in the Senate by his peers. With Republicans taking control of the Senate, he will now be the Senate Majority Leader.

As we look forward to 2025 and what this all means for public power, here are a few of the matters we’ll be watching closely.

Funding

Of immediate concern for many is whether funding through the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) will still be available.

A complete dismantling of either program is unlikely. However, they could face shifts in emphasis. Many of the projects being funded by the IIJA have bipartisan support. However, President Trump may reallocate funds or adjust priorities, emphasizing traditional energy infrastructure.

Republican-leaning states have benefited from many projects funded by the IIJA. They are recipients of more than three quarters of the $268 billion in clean energy investments announced thus far. This makes the programs attractive to many members of Congress.

Certain provisions of the IRA may be repealed to help pay for extending the Tax Credits and Jobs Act, which is set to expire in 2025. There is a possibility the tax exemption on municipal bonds could also be targeted.

After sitting in on different webinars on this topic, there is still no clear answer. We will continue to monitor the programs and policies and report on any potential changes.

FERC

After the Thanksgiving break, Congress has three weeks of a “lame duck session” with a long to-do list.

One issue the American Public Power Association has found great concern with is The Energy Permitting Reform Act of 2024 (EPRA). Provisions in the bill would expand the jurisdiction of the Federal Energy Regulatory Commission (FERC) over public power utilities, electric cooperatives and federal Power Marketing Administrations.

Public power is supportive of efforts to streamline the federal permitting and siting process and eliminating excessive regulatory barriers. Reforms are needed for utilities to meet growing electricity demand and ensure system reliability.

However, public power utilities are primarily regulated at the state and local levels. They are not subject to full regulation by FERC. ERPA proposes notable changes to FERC’s authority.

Existing FERC rules respect jurisdictional boundaries. They establish processes to produce regional transmission plans by incentivizing public power to participate voluntarily. Many have done so in the best interests of the communities they serve.

The bill would require public power entities to subject themselves to additional FERC regulations. A permit to build a transmission line designated to be in the national interest would be required.

Public power entities would have an undue burden when building transmission lines. This would reduce the likelihood public power would participate in the construction or modification of national interest electric transmission facilities.

APPA believes this intrudes on public power’s local decision-making authority. It could ultimately lead to higher rates for customers.

APPA submitted a joint letter with NRECA outlining their concerns. They specifically stated their support of the underlying goal of the bills. They also stated they “strongly believe our concerns about expanding FERC jurisdiction over non-jurisdictional entities can be addressed without sacrificing the purpose of the bill, or its bipartisan support.”

Regulations

President Trump has expressed a desire to roll back regulations. He may also look to expedite infrastructure projects and favor pipelines over other investments.

He will likely reduce red tape to speed up the construction and repair of roads, bridges and other critical systems.

The National Environmental Policy Act will likely be a target. He will look to facilitate more efficient, effective and timely NEPA reviews by federal agencies.

The Environmental Protection Agency (EPA) will focus on reversing much of the action by the Biden Administration. This will be similar to it overturning Obama-era regulations on power plants in 2019.

As they say, the only certainty is uncertainty. As we transition into a new administration, we will monitor these issues and more and keep you apprised of any changes.