CEO’s Report: State legislative outlook

Issues impacting public power in South Dakota, Minnesota and Iowa legislatures

Legislative Sessions are in full swing with each state taking up different bills related to public power. State legislatures often make decisions that impact a municipality’s ability to operate efficiently and effectively. It is all our jobs as public power employees to make sure legislators have all the facts when making these decisions.

Here are a few issues we are watching closely.

South Dakota – SB 66

This bill is an act to remove the right of an annexing municipality to acquire service territory of an electric utility. Essentially it would prohibit municipal electric utilities from growing with their cities.

The bill was proposed by the state’s rural electric cooperatives, whose service territory is often adjacent to that of a city’s. The cooperatives want to freeze electric service territories as they sit today, while municipal utilities would still be responsible for providing other services such as water, wastewater, sewer, and roads as their boundaries expand.

This issue is an important one for public power as the ultimate decision could have far-reaching impacts, perhaps beyond the borders of South Dakota.

We believe if this bill is implemented as written, it will hamper economic development by disallowing cities to provide comprehensive packages to potential businesses. It will lead to raised rates on all other services municipalities provide in order to make up for lost electric revenue.

While the good news is that the two sides on this issue continue to talk in hopes of reaching common ground, it is still vital for public power communities to come together and advocate on their own behalf.

We’ll continue monitoring this bill and keep our customers apprised of any progress.

Minnesota – CIP Reform

The Minnesota Municipal Utilities Association recently held their Legislative Conference where utility personnel had the opportunity to visit with legislators about issues impacting their communities. Heartland staff Steve Moses and Kelly Dybdahl were among those in attendance.

MMUA has taken positions on several issues important to public power utilities in the state. Of note is the need to restructure the state’s Conservation Improvement Program.

The consumer owned utilities in Minnesota believe CIP has achieved significant success toward reducing Minnesotans’ energy spending, catalyzing sustainable and renewable energy production in the state, minimizing new electric generation construction, and reducing greenhouse gas emissions. It has facilitated the successful widespread adoption of new efficient technologies.

They also believe CIP in its current form has reached maturity and the program needs to be modernized. Many of the things CIP currently incentivizes have now been deployed to a point of saturation and thus diminishing returns on the investment.

Municipal utilities have been consulting with several non-government organizations to develop a modernized CIP that recognizes the good points of the current program while updating it to meet current demands and expectations.

MMUA is seeking support for passage of CIP reform that reflects new and modern objectives. Specifically, MMUA requests support for a CIP bill that would retain the current 1.5 percent savings goal, recognizes and perhaps incentivizes efficient electrification, allows consumer owned utilities to count efficient electrification and other new approaches for credit towards one-half of their CIP goal, and repeals the current minimum expenditure requirement, among others.

I encourage you to support MMUA in their efforts to revamp the Minnesota CIP program. While public power utilities support conservation and energy efficiency, the program as it sits today can be very burdensome to our locally-owned, locally-run utilities.

Iowa – HF 154

In Iowa, a bill has been introduced that would restrict the installation and use of smart meters by municipal utilities and would require the installation, free of charge, of an analog meter for any customer who requests it.

The bill provides that a public utility shall not install a digital meter or smart meter at a customer’s residence or place of business on or after July 1, 2019, without first providing the customer with educational information regarding the full scope of the meter’s functioning and effects, including the health and safety warnings, and the opportunity to consent to the installation or refuse such consent by electing to keep or receive an analog meter.

The bill also provides that the public utility shall replace a digital meter with an analog meter free of charge at the customer’s request and shall not provide discounted rates to customers in exchange for installing a digital meter.

Iowa Association of Municipal Utilities (IAMU) believes this bill is based on misconceptions about smart meters and will work to ensure that municipal utilities are not restricted from using the best and most up-to-date technology in their efforts to deliver cost-effective service to customers.

Stay involved

As each state’s legislative sessions continue to progress, we’ll monitor these issues as well as any others that could affect public power. If we don’t update and educate our lawmakers, they can’t make truly informed decisions that are in the best interest of our utilities and our customers.