CEO’s Report: Legislative priorities for public power

Each year, the American Public Power Association hosts the Legislative Rally in Washington, D.C. This is a time to collectively speak to members of Congress about issues crucial to the success of public power utilities.

Heartland staff have always actively participated in the Rally, meeting with members from the states where we have customers and generation resources.

I currently serve on the board of directors for APPA and am a member of the executive committee. The APPA staff does an excellent job of lobbying on behalf of public power utilities, keeping tabs on harmful legislation and communicating with members of Congress.

Concerns always seem to carry more weight, though, when they’re given by constituents who will be directly impacted by pending legislation.

While Heartland was not able to attend the Rally in person this year, there are still many issues of importance on the table and we are working on other ways to connect with legislators at the federal level.

In the meantime, I would encourage you to reach out to your elected officials and discuss your concerns about the future of public power. Some of the issues you may want to discuss are noted below. A complete list of issues can also be found on APPA’s website.

Supply Chain Issues

Nationwide, the U.S. supply chain for electric grid equipment is becoming increasingly disrupted. Manufacturers say shortages of labor and steel have cut their ability to meet demand for electric transformers used in electric power transmission and distribution.

Large regional utilities are likely to have direct relationships or long-term contracts with transformer manufacturers, typically making them first in line for receiving equipment.

Public power utilities with short-term bidding requirements are likely to see more issues and there is concern that small, rural utilities are particularly vulnerable.

Supply chain disruptions are expected to delay new economic developments as well as system upgrades needed to accommodate electrification.

APPA is working to communicate the effects of these supply chain disruptions to Congress and public officials to increase awareness and promote solutions before economic development and disaster response is put at further risk.

Preserving the Municipal Exemption from Federal Pole Attachment Regulations

The term pole attachment refers to the process by which communications companies can place communications infrastructure on existing electric utility poles. This reduces the number of poles that must be built to accommodate utility services, while reducing costs to users of both services by allowing providers to share costs.

Rules governing pole attachments must balance the desire to maximize value with concerns unique to electric utility poles, such as safety and reliability.

In 2009, Congress directed the FCC to develop and deliver a plan to Congress to ensure every American had access to broadband capability. The Commission recommended establishing a “harmonized access policy for all poles, ducts, conduits and rights-of-way.”

Attachments rates for public power utilities are usually determined at the local level. The Commission cited no cases where the exemption proved to be an impediment to broadband deployment.

The FCC has continued to recommend eliminating the exemption public power utilities and rural electric cooperatives have from FCC regulation of pole attachments under the guise of facilitating broadband deployment.

APPA opposes any efforts by Congress to weaken or eliminate the municipal exemption public power utilities have from federal pole attachment regulations. They also oppose the FCC’s efforts to circumvent well-established federal law that precludes the Commission from regulating public power utility poles.

You can read more about the issue here.

Grid Security

A reliable energy grid is the lifeblood of the nation’s economic and national security, as well as vital to the health and safety of all Americans. Public power utilities take the responsibility to maintain a secure and reliable electric grid very seriously.

Cyber-attacks have rapidly evolved and could have operational consequences. While federal standards are in place for cybersecurity and establish an important baseline for security, grid security is more than a compliance exercise.

APPA works directly with the Department of Energy on a number of fronts. Most recently, DOE’s Office of Cybersecurity, Energy Security and Emergency Response (CESER) awarded APPA a grant of $6 million over a three-year period to develop and deploy cyber and cyber-physical solutions for public power utilities.

The program’s goal is to provide utilities with cybersecurity sensor capabilities to protect key operational technology assets that enable the safe operation of the physical systems that deliver electric power.

This effort builds on the accomplishments of another three-year grant CESER awarded to APPA in 2016, with which APPA assessed and helped to strengthen the cybersecurity posture of small- and medium-sized public power utilities. This grant enabled the development of a cybersecurity scorecard for public power utilities to assess their cyber readiness, the production of a cybersecurity roadmap, an incident response playbook, and other guidance documents to help utilities develop a culture of cybersecurity within their organizations.

Legislation based on the success of the 2016 grant program, H.R. 2931, the Enhancing Grid Security through Public-Private Partnerships Act, was introduced by Representatives Jerry McNerney (D-CA) and Bob Latta (R-OH) and passed as part of a broad bipartisan infrastructure bill (H.R. 3684, the Infrastructure Investment and Jobs Act) in November 2021. The provision directs DOE to carry out a program to promote and advance the physical and cybersecurity of electric utilities, with priority provided to utilities with fewer resources. The bipartisan infrastructure bill contains other provisions authorizing funding at DOE to work with industry on improving grid security.

APPA believes that close coordination among industry and government partners at all levels is imperative to deterring attacks and preparing for emergency situations. Finally, APPA believes that any additional cyber incident reporting requirements must be harmonized with the existing reporting requirements for the electric utility industry.


These are just a few of the Legislative issues we are keeping an eye on. We are also closely watching the distribution of funds available through the Infrastructure Investment and Jobs Act.

If you are unsure of who your representatives are in Congress, let us know and we will put you in contact with the correct offices.

CEO’s Report: How the Infrastructure Investment and Jobs Act affects public power

President Joe Biden signed into law the Infrastructure Investment and Jobs Act on November 15. The bill includes $1.2 trillion in funding, including $550 billion in new federal spending that was not previously authorized.

The bill includes $7.5 billion in federal spending for electric and alternative fuel vehicle infrastructure, $65 billion for broadband infrastructure, $65 billion for electric and grid infrastructure, $7.5 billion for zero- and low-emission school buses and ferries, and $47.2 billion for resiliency, including cybersecurity.

The American Public Power Association will host a free webinar for members on Thursday, December 9 at 1:00 p.m. on what was included in the new law and what potential funding opportunities may be available to public power in the coming years as a result.

All Heartland customers are members of APPA and are encouraged to participate in the webinar. More information and registration details can be found on their website.

In the meantime, I would note a few opportunities of interest to public power.

Grid Infrastructure and Resiliency

Several sections of the bill are dedicated to electric grid reliability and prevention of outages.

One section would create a $5 billion grant program through Department of Energy to prevent power disruptions, or events in which the grid can’t be operated safely due to extreme weather or natural disaster.

Eligible entities would include electric grid operators, electricity generators, distribution providers and others. DOE may make grants directly to eligible entities in addition to a formula grant to be distributed to states and tribes. The program includes a small set aside of 30% for eligible entities that sell less than 4 million MWh of electricity per year. Additional information can be found here.

Another section authorizes and appropriates $5 billion for a new competitive DOE program called the “Program Upgrading our Electric Grid and Ensuring Reliability and Resiliency.” States, tribes, units of local government and public utility commissions would be eligible to apply for funding to coordinate and collaborate with the electric sector to demonstrate innovative approaches to transmission, storage, and distribution infrastructure that harden and enhance resilience and reliability.

It also appropriates $1 billion for a new DOE program to provide financial assistance to improve reliability and safety of energy in rural and remote areas defined as cities or towns with populations of 10,000 or less.

Cybersecurity

Enhanced grid security as well as rural and municipal utility cybersecurity will be a priority with this bill. One section will require DOE to carry out a program to promote and advance the physical security and cybersecurity of electric utilities, with priority provided to utilities with fewer resources.

$250 million will be available through DOE for a “Rural and Municipal Utility Advanced Cybersecurity Grant and Technical Assistance Program” to provide grants to utilities to detect, respond to, and recover from cybersecurity threats.

Charging and Fueling Infrastructure

A grant program funded at $2.5 billion will be available at the Department of Transportation to provide grants to eligible entities, including public power utilities, for the deployment of electric, hydrogen, propane or natural gas vehicle infrastructure along designated Alternative Fuel Corridors.

Entities are required to contract with a private entity for the acquisition and installation of fueling infrastructure. Fifty percent of the overall funding is set aside for “Community Grants” for which public power utilities would also be eligible. These grants do not require, but allow for, partnerships with private entities and can be used to deploy fueling infrastructure in public locations including parking facilities, public buildings, public schools and parks.

Other Funding of Note

In addition, the infrastructure bill includes $65 billion for broadband, $47 billion for climate resiliency, $21 billion for environmental projects and $2 billion for underserved rural areas.

I again encourage you to take part in the free APPA webinar on December 9.  APPA plans to hold an additional webinar in early 2022 to provide an overview of the federal grant process, including how to find and apply for grants, likely application requirements and any updates on the timeline for federal agencies to implement the infrastructure law.

Heartland staff will participate in the webinar and keep customers apprised of any developments related to the bill.

CEO’s Report: Emphasis on energy needed in infrastructure talks

Two infrastructure bills are currently floating through Congress, each with different meanings and implications for public power.

Each bill deals with a different type of infrastructure. One is geared towards more traditional infrastructure such as roads and bridges. The other is geared towards social infrastructure. The Biden Administration has expanded the term to include such provisions.

Social infrastructure

H.R. 5376, otherwise known as the Build Back Better Act, deals with social infrastructure. Last week the White House announced a $1.75 trillion “framework” for an agreement on the Build Back Better Act. It includes $550 billion over 10 years for clean energy and climate programs.

The package is likely to evolve, but today includes $320 billion in tax credits and $110 billion in incentives to increase domestic supply chains for solar, batteries and advanced materials.

Tax credits would be for “utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing.”

The legislation would extend existing tax credits for wind and solar projects. It would also create a greenhouse gas reduction fund and provide state grants for electric vehicle charging stations.

The bill has undergone significant changes since the first draft was released, including dropping the $150 billion Clean Electricity Performance Program, which would have rewarded electric providers for meeting clean energy targets and penalizing those that didn’t.

CEPP would have placed unrealistic targets on utilities and created financial burdens for ratepayers.

House and Senate Committees must next move to flesh out details of the agreement and then finish drafting it as legislative language. While this process is underway, there is still time to modify the final contents of the bill.

The bill could be held up by Sen. Joe Manchin, (D-W.Va.), who has demanded more time to evaluate the projected economic impact of the bill. The bill would likely require votes of all 50 Democrats in the Senate for passage, as no Republicans are expected to support it.

The American Public Power Association will continue to work to ensure that any extended and expanded energy tax credits are available to public power as refundable, direct payment energy tax credits; and ensure that an expansion of energy tax credits include hydropower tax credits as proposed by Senator Maria Cantwell (D-WA).

Traditional infrastructure

H.R. 3684, the Infrastructure Investment and Jobs Act, deals with more traditional infrastructure such as roads and bridges. The $1.2 trillion bipartisan bill passed the Senate and awaits passage in the House.

Headshot of APPA CEO Joy Ditto

The bill includes $550 billion in new spending, including money for roads, bridges, railroads, airports, broadband infrastructure and more. It also includes $65 billion for the power grid to update power lines and cables and prevent hacking of the grid. Clean energy funding is also included.

APPA CEO Joy Ditto recently penned an opinion piece for The Hill, sharing thoughts on how the infrastructure bill represents a significant opportunity to support public power.


“It is no exaggeration to say that our energy infrastructure is the lifeblood of our economic and national security and is vital to the health and safety of all Americans…We urge congressional and White House negotiators to continue to treat energy infrastructure as a front-burner issue.”

Joy Ditto, APPA President & CEO

You can read her piece here at The Hill.

As always, Heartland will continue to monitor both bills and their potential impact on public power utilities.

Plankinton fulfills housing need with new development

Plankinton Development Corporation President Ron Kristensen believes his community is in a unique position – poised for growth but limited by one necessity.

“We have jobs, but we need sites ready for housing,” said Kristensen.

Strategically located at the intersection of two national highways, Interstate 90 and US 281, Plankinton, South Dakota has seen dramatic growth in recent years. The city has added nearly 50 residences since 2000 and its population grew 17% from 2000 to 2010. Increased job opportunities, a new school and a revitalized business district have drawn a growing number of young people and families to the community, leading to a strong need for additional housing.

The development board previously found success offering free housing lots to anyone planning to build. Now, as one housing development sits full, with all seventeen lots either purchased or occupied, work is underway on an adjacent second development.

From left to right: Heartland CFO Mike Malone, Plankinton Development Board President Ron Kristensen, Heartland Customer Relations Manager Steve Moses, and Plankinton Light Superintendent Vern Hill
From left to right: Heartland CFO Mike Malone, Plankinton Development Corporation President Ron Kristensen, Heartland Customer Relations Manager Steve Moses, and Plankinton Light Superintendent Vern Hill.

“Not only will we be able to offer more options to future homeowners, but the new development will increase the city’s sales tax revenue, thereby increasing the city’s value and potentially lowering the property tax level,” said Kristensen.

Kristensen believes the location of the new development will be a big draw for residents.

“The new sites are close to the school which is important for many young families in town. Residents will also be able to live closer to their jobs.”

The new development will be built in two stages and will feature 14 lots. Infrastructure installation has already begun, with water supply available. Two lots are currently construction ready, but the installation of underground utilities later this fall will bring that total up to nine.

Heartland awarded the Plankinton Development Corporation a $5,000 economic development grant to assist with costs of preparing the development.

“Housing is an issue for many communities but it means the city is doing something right,” said Heartland CFO Mike Malone. “If people want to live there, there must be good jobs available and an excellent quality of life. Heartland is always excited to see our customers in growth mode.”

Heartland provides wholesale power to the city of Plankinton and awards economic development grants to help fund projects that spark growth and development in customer communities. Projects that promote economic prosperity, support new business opportunities or improve the social and economic well-being of local residents may qualify for the program.

 

FERC details reliability, infrastructure questions for Western conference on EPA plan

The Federal Energy Regulatory Commission on Jan. 26 released details about a conference it has scheduled for February in Denver, Colorado, that will examine the U.S. Environmental Protection Agency’s proposed plan to reduce emissions from existing power plants.

The newly released agenda for the meeting details questions and topics related to reliability, infrastructure and markets that commission staff plans to focus on at the conference scheduled to take place on Feb. 25.

FERC on Dec. 9 said that it would hold a series of technical conferences “to discuss implications of compliance approaches” to the EPA’s proposed plan for curbing emissions from existing power plants.

“In particular, the technical conferences will focus on issues related to electric reliability, wholesale electric markets and operations, and energy infrastructure,” FERC said in the notice. The EPA plan is referred to as the Clean Power Plan.

FERC will hold a national overview technical conference on Feb. 19 at its headquarters in Washington, D.C.

Following that technical conference, the commission will hold three regional technical conferences, on dates to be announced, in three cities: Washington, D.C. (Eastern Region), St. Louis, Missouri (Central Region) and Denver, Colorado (Western Region).

FERC on Jan. 26 issued a supplemental notice that offers details on the conference scheduled to take place on Feb. 25 in Denver.

The portion of the conference that will take place in the morning will include a panel that will discuss electric reliability issues.

The agenda includes a number of topics and questions that FERC said panelists should be prepared to discuss in the area of electric reliability.