Iowa Association of Municipal Utilitiesarchive.iamu.org/conference/Leadership 2014/Julie...

Iowa Association of Municipal Utilities

IAMU Leadership ConferenceFebruary 5, 2013

Julie Smith, Legislative and Regulatory Counsel


literally all choked up…


Politics of 2014 Session

• Session started Monday January 13th

– Push to end session early ‐ first and second funnels to be moved up one week ‐ Feb. 21 and March 14

• Second year of 85th General Assembly – “It is ALIVE”

• It’s ALL about the elections


2014 Elections

• March 14 filing… will know who won’t run again• Senate D’s 26/R’s 24 • House R’s 53/D’s 47• Senate R’s and House D’s – think they can be in majority in 2015 – Senate: 11R seats/14 D seats– House: all 100 seats up

• Will be a lot of pressure to make• Political campaign contributions and a good time to help with a local campaign


Who are our legislators?

Average age – House 54~Senate 55Women – House 25% ~Senate 20%Professions: Farmers – House 18%~Senate 24%Retired – House 18%~Senate 14%Teachers – House 12%~Senate 6%Lawyers – House 10%~Senate 6%Public Safety – House 1%~Senate 8%


Statewide Races• Congressional Races ‐ Iowa will be VERY high profile – a LOT of money

• WHY so many legislators and others? –opportunities for higher office are rare – wait 75 years…. 3 major seats w no incumbent

• June 3 primary – a candidate needs 35% to win …otherwise election goes to a convention –those people who are elected to state convention vote for candidate who wins


Senate

Senate – Tom Harkin’s seat• D’s Bruce Braley

6 Republicans• Joni Ernst – Lt. Colonel Army

National Guard, State Senator, endorsed by Lt. Gov.

• Matt Whitaker, Sam Clovis, Mark Jacobs, Scott Schaben, Paul Lunde

• Rumors of Bob VanderPlaats


District #1 – Bruce Braley’s seat

• 5 Democrats • Rep. Anesa

Kajtazovic• Swati Dandekar• Monica Vernon• Dave O’Brien• Rep. Pat

Murphy

• 3 Republicans• Rep. Walt Rogers

• Rod Blum • Steve Rathje


District #2

• D – Representative Dave Loebsack

• R’s ‐ Rep. Mark Lofgren


Congressional District 3• Tom Latham not running

–Likely R to Toss‐Up • D ‐ Former State Senator

Staci Appel– Rumors of Former Gov.

Chet Culver• 6 R’s

– Monte Shaw, – Robert Cramer, – Secretary of State Matt

Schultz– David Young – Joe Grandanette

• State Senator Brad Zaun


Congressional District #4

• R ‐ Congressman Steve King

• D ‐ Jim Mowrer


Governor’s race

Governor Branstad State Senator Jack Hatch


Democrats and Republican Party #s

• Secretary of State’s Office #’s of registered votes – R’s outnumber registered D’s by 1,334 voters Registered No Party voters – more than R and D

• As of January 2nd:– Democrats: 615,428– Republicans: 616,762– No Party: 719,917


• MuniPAC small compared to other utility PACs ‐ but we appreciate any contributions– $$ is used in an election year – to support legislators who support us

• BID on MuniPAC silent auction items• As of Jan. 2014 ‐ $3900• 2012 – distributed $5,000


What are we up against?

• More Money ‐ Cash on hand as of Jan. 2014– MEC – 2 PACs

• MEC Effective Government Committee ‐ $43,788• MEC Executive PAC ‐ $198,168

– REC’s ‐ $81,798– Alliant ‐ $27,540

• More Manpower• More Lawyers


Board and Manager campaign

• PLEASE participate in MuniPAC and attend the legislative breakfast


IAMU Legislative Events

• Water Day at the Capitol 2‐3‐2013 – IAMU gave legislators low‐flow showerheads

• Joint statement – IRWA, AWWA, IAWA, DMWW, IAMU, League of Cities ‐ drinking water infrastructure needs

• Special Presentation of water day gift to Bob Haug“If there is magic in Iowa, it is in the rural water!”


Pictures from Water Day


The new “Bob Haug”“and I am not talking about the Governor”


Legislative Breakfast• Legislative Breakfast at the Capitol – tomorrow 7:00 – 8:30– Parking – easy to park at bottom of stairs on WEST side – Written invites – distributed to legislators at Capitol– IAMU ‐ notepad, mechanical pencils, IAMU brochures,

• Talk about legislation and Position statements• What can you do to foster legislative relations?

– Offer to hold a legislative forum at the utility– Offer to give your legislator a tour of your facility– If your legislator is someone you support, you can offer to help put up yard signs, put up a yard sign in your yard, make calls, hold a fundraiser, etc…


2014 Legislation

• Rural Water – 2 Mile Limit• Water Infrastructure • IUB Jurisdiction• Telecom ‐ Broadband Expansion• Distributed Generation• CleanLine• One Call• Open Meetings• Heating Costs


Water “service territories”• HF 516 ‐ Last session – tough fights with rural water over two‐

mile limit bill– State, federal action ‐ put a lot of pressure on rural water groups to

work something out– Representative Dave Deyoe – champion for cities, particularly in his

district, Nevada, Ames• IRWA proposal (Oct.) ‐ goal of coming to an agreement that will

provide more clarity in the 2 mile limits• Close to an agreement – hope to pass a bill this session• Please talk to your legislators and ask them to support our

efforts– Position Statement– Discuss your own issues with two mile limit and planning outside

your city


“Agreed to” amendment• All Rural water subject to two mile limit notification requirements

– Must comply after July 1, 2014– Notice not required if rural water is serving new customers or improving

facilities within the existing service area or agreement with the city• Requires water plan be filed by certified mail with Board of Trustees • Shortens time city has to provide water service to 3 years instead of 4

years. Requires city to provide rural water with a map showing the city’s incorporated borders and the areas currently served

• Creates reciprocal requirement on part of city and rural water. If city or rural water can’t provide service within three years, other party to be notified by certified mail

• Shortens city’s response time from 90 days to 75 days. – If the city fails to respond within 75 days – rural water may provide service – City may request additional time–must respond within 165 days (current

law is 180 days)– All notification must be by certified mail


Agreement cont…• If city reserves the right to provide water service the city

must show intent and ability to provide service by providing rural water with a copy of its plan

• Creates similar protection from liability for city for failure to provide fire protection outside the city limits

• Provision of service defined to mean delivering water in sufficient quantity and quality to meet the customer’s desired need. The DNR determines whether quantity is sufficient through construction permitting process

• Allows for either party to request mediation if land is annexed


Thanks Rep. Dave Deyoe• Mary Ann Hanusa (R, District 16), Chair• Bobby Kaufmann (R, District 73), Vice Chair• Roger Thomas (D, District 55), Ranking Member• Dwayne Alons (R, District 4)• Chip Baltimore (R, District 47)• Bruce Bearinger (D, District 64)• Dave Deyoe (R, District 49)• Nancy Dunkel (D, District 57)• Mary Gaskill (D, District 81)• Lisa Heddens (D, District 46)• Dave Jacoby (D, District 74)• Ron Jorgensen (R, District 6)• Mark S. Lofgren (R, District 91)• Helen Miller (D, District 9)• Brian Moore (R, District 58)• Scott Ourth (D, District 26)• Walt Rogers (R, District 60)• Jason Schultz (R, District 18)• Larry Sheets (R, District 80)• Rob Taylor (R, District 44)• Frank Wood (D, District 92)


Water Infrastructure• Joint statement by IAMU, IAWA, DMWW, IRWA, AWWA – “water infrastructure plays a critical role in protecting public health, promoting economic prosperity , and ensuring a good quality of life across the state” – Systems are aging and neglected– Expensive system upgrades to comply with stringent regulations

• State appropriation for grants and loan funding• Water quality trading • Cost effective alternative technologies• Bill hasn’t been filed yet


IUB Jurisdiction Deposits

• Rockford Municipal Light Plant ‐ FCU‐2013‐0008– IUB found they DID have jurisdiction over electric and gas deposit amount

• Calculation of deposit based on past 12 months usage – if unoccupied – move to prior 12 months

• Primghar complaint ‐ Primghar – complaint against deposit of $250 for all utilities

• Primghar response – IUB deposit would be higher for customer – electric ($191.15) + garbage, sewer ($73.80) = $265.10


IUB Jurisdiction, cont. • SSB 3018, Bob Dvorsky, Ch, Herman Quirmbach, Mark

Mark Chelgren• HSB 594, Quentin Stanerson, Ch, Ted Gassman, Frank

Wood• THANKS to House Local Government Chair, Jason Schultz

and Senate Local Government Chair Mary Jo Wilhelm• Please talk to your legislators about this issue

– Position Statement– What does your utility do? What problems do you encounter

with deposits? Why is home rule important?• If legislation doesn’t pass ‐ Adopt IUB deposit policy

(highest month billing in previous 12)


Local Government Committees• HOUSE• Jason Schultz (R, District 18), Chair• Greg Heartsill (R, District 28), Vice Chair• Art Staed (D, District 66), Ranking Member• Cecil Dolecheck (R, District 24)• Dean Fisher (R, District 72)• John Forbes (D, District 40)• Mary Gaskill (D, District 81)• Tedd Gassman (R, District 7)• Mary Ann Hanusa (R, District 16)• Jake Highfill (R, District 39)• Bob M. Kressig (D, District 59)• Daniel Lundby (D, District 68)• Dawn E. Pettengill (R, District 75)• Henry V. Rayhons (R, District 8)• Joe Riding (D, District 30)• Kirsten Running‐Marquardt (D, District 69)• Larry Sheets (R, District 80)• Quentin Stanerson (R, District 95)• Phyllis Thede (D, District 93)• Matt W. Windschitl (R, District 17)• Frank Wood (D, District 92)

• SENATE• Mary Jo Wilhelm (D, District 26), Chair• Chris Brase (D, District 46), Vice Chair• Amy Sinclair (R, District 14), Ranking Member• Mark Chelgren (R, District 41)• Robert E. Dvorsky (D, District 37)• Dennis Guth (R, District 4)• Rita Hart (D, District 49)• Herman C. Quirmbach (D, District 23)• Brian Schoenjahn (D, District 32)• Rich Taylor (D, District 42)• Brad Zaun (R, District 20)


Telecom Policy • Governor – STEM Advisory Council’s Broadband Committee ‐ “Connect Every Iowan” ‐ goal to Increase access, adoption, and use of broadband– Long‐term strategic plan by 1‐1‐2015

• IAMU L & R Committee passed a motion to support the Position Statement in your packet– Municipal telecom are included


Governor’s Main Policy Agenda Broadband Expansion

• HSB 515 – “Connect Every Iowan Act”– Wholesale broadband access over ICN to communication service providers

– Unserved or underserved areas of state • No service with download speeds of greater than 50 megabits per second and upload speeds of 15 megabits per second to residential customers

– Property tax exemption for installation of new infrastructure July 1, 2014 – Dec. 31, 2018

– Education incentives/Internships– Cell siting – uniform policies


House Broadband Subcommittee


SSB 3119 “Statewide Broadband Expansion Act”

• Creates statewide broadband coordinating council and information exchange

• “unserved or underserved communications service area” defined as inadequate or insufficient download and upload speeds as determined by rule

• Allows wholesale access to ICN • Additional Incentives

– Creates broadband revolving loan fund ‐ low interest loans ‐$250,000 limit

– Tax credit ‐ 3% of amount expended by a communication service provider for new installation of broadband infrastructure w cap of $750,000 per installation

– Property tax incentive ‐ twenty‐year exemption broadband infrastructure installed from 2014 to 2018

• First Subcommittee Monday afternoon


Broadband Expansion ‐Committees

House Commerce• Peter Cownie (R, District 42), Chair• Mark Brandenburg (R, District 15), Vice Chair• Chris Hall (D, District 13), Ranking Member• Chip Baltimore (R, District 47)• Dave Dawson (D, District 14)• Dean Fisher (R, District 72)• John Forbes (D, District 40)• Pat Grassley (R, District 50)• Dave Jacoby (D, District 74)• Bob M. Kressig (D, District 59)• John Landon (R, District 37)• Jim Lykam (D, District 89)• Brian Meyer (D, District 33)• Jo Oldson (D, District 41)• Scott Ourth (D, District 26)• Dawn E. Pettengill (R, District 75)• Joe Riding (D, District 30)• Thomas R. Sands (R, District 88)• Jeff Smith (R, District 1)• Chuck Soderberg (R, District 5)• Rob Taylor (R, District 44)• Guy Vander Linden (R, District 79)• Ralph C. Watts (R, District 19)

Senate Economic Growth• Steven J. Sodders (D, District 36), Chair• Tod Bowman (D, District 29), Vice Chair• Rick Bertrand (R, District 7), Ranking Member• Jerry Behn (R, District 24)• Mark Chelgren (R, District 41)• Jeff Danielson (D, District 30)• William A. Dotzler Jr. (D, District 31)• Rita Hart (D, District 49)• Jack Hatch (D, District 17)• Hubert Houser (R, District 11)• Liz Mathis (D, District 34)• Charles Schneider (R, District 22)• Rich Taylor (D, District 42)• Jack Whitver (R, District 19)• Mary Jo Wilhelm (D, District 26)


IUB Telecom

• Appropriate Scope of Telecommunications Regulations 1‐11‐2013 (IUB: NOI‐2013‐0001)

• IUB legislation – substantive changes – IAMU amendment– technical changes – update Code


VOIP

• Providers want to take IUB out of regulation• IUB considered during NOI – decided NO change

– Loss of consumer protection, inability to solve intercarrier disputes – FCC would govern

– Rural call completion– Regulatory treatment should be technologically neutral

• IAMU is opposed• Voice is Voice, No Matter the Call – Iowa Communications Alliance, Sprint, U.S. Cellular, Iowa Institute for Cooperatives, INS, Mediacom


Wind Energy

• Senate Resolution 103 – encourages federal delegation to support extension of federal production tax credit for wind energy –sponsored by 41 Senators ‐ debated today on Senate Floor

• Wind Energy Incentive – SF 372 – voted out of Senate Ag last session– Rumored attempts to move it this session– Require use of standardized interconnection contracts and allows IUB to set rates for wind energy production facility of up to 20 MW


Nuclear

• HF 2046 ‐ No certificate can be issued until DNR certifies that the fed. Govt. has identified and approved a demonstrable technology or means for disposal of high‐level nuclear waste AND construction of facility has specifically been approved by a majority vote of both House and Senate.

• HF 2047 ‐ 60% of voters within 250 mile radius of proposed facility must vote to approve construction. 8 year limitation on next election.


Tax Credits

• Extending solar tax credits and allowing taxpayer to claim more than one credit providing separate installations – SF 431

• CNG/Electric Vehicle Tax Credits – SF 434 – $5 M in tax credits for compressed natural gas and electric vehicle charging stations

• Both of these bills are stopped in House


One Call Subcommittee


One Call – HSB 518 • Requires electronic response from operator when marking

complete – notification center notifies excavator• Requires excavator to use white paint, flags, stakes or

combination to show proposed area of excavation• Notice of planned excavation must be given not more than 10

calendar days prior to start of excavation. All requests for locates received after 5:00 p.m. processed as if received at 8:00 a.m. the next business day. Original notice valid for 20 days.

• Unless otherwise agreed in writing, an excavation shall NOT be performed within 25 feet of a natural gas transmission line or other critical underground facility until operator is present at the planned excavation area

• Heavy Highway contractors and Associated General Contractors against

• IAMU – FOR


Clean Line – DC Transmission Line


Clean Line

• Informational meetings across the state• Filed request with IUB to bifurcate franchise process – Issues of whether the line serves a public purpose thus allowing grant of franchise are heard in combination with a request for eminent domain authority

– Costs would be exorbitant if had to figure that out before knowing whether IUB will approve franchise

– 1,247 private easements, 2,295 separate individuals• IUB denied request


Legislation to Oppose CleanLine

• Preservation of Rural Iowa Alliance protesting Clean Line – Filed 100s of letters and objections with the IUB

• HF 2054 by Grassley, Kaufmann, Rogers, Fisher, Watts, Heartsill, Schultz, Pettengill, and Byrnes

• Prohibits allowing a bifurcated hearing unless approved by a majority of House and Senate

• HF 2056 by Grassley, Kaufmann, Rogers, Fisher, Watts, Heartsill, Pettengill, and Byrnes

• Must show minimum of 25% of electricity used in state• If 250 signatures on petition, opposing party gets equal time at information meetings

• Not similar issues in Senate


Open Meetings• SF 2053 – by Senator Pam Jochum expands the times

when an advisory committee must comply with open meetings requirements– Eliminates the exception for social and ministerial functions– IAMU is AGAINST

• HSB 216 –Office of Citizen’s Aide access to closed session audio recordings without getting a court order – Citizen’s Aide (used to be Ombudsman) claims they had this

authority in the past and the AG changed the rules? – Much discussion last year– Subcommittee yesterday – amendment accepted – to be

voted out of Govt. Oversight– IAMU and other local government groups AGAINST


High Heating Costs

• High costs of propane this winter leading to overall discussion on high heating costs

• Governor’s Actions – doing everything possible to resolve

• Senate D’s – SSB 3137 ‐ $2M to LIHEAP –voted out of Senate Approp. yesterday

• House D’s – HF 2075 ‐ $1M to LIHEAP


State Regulatory Issues

• NOI – 2014 – 0001 Distributed Generation• NOI – 2014 – 0002 Peak Alert • EPA Meeting – Carbon Emissions


NOI‐2014‐0001Distributed Generation

• IUB issued Jan. 7, 2014• Invited comment from public

– Benefits and challenges of DG for utilities and ratepayers– State, local policies – Identify technical, financial, regulatory and safety aspects of DG

• Potential rate implications, impact on reliability of transmission and distribution systems, need for future transmission, economic impact of widespread DG, consumer protections

– Initial Comments due Feb. 25 – expect Reply comments and possible hearing/workshop in a few months

• IAMU will work with L & R Committee to develop comments


NOI‐2014‐0002• Peak Alert Rules – filed 1/23 rules effective in 1983 – last reviewed

2003 – Each electric utility is required to file annual written notice to customers

explaining how growth in demand affects a utility’s investment costs and why reduction of customer usage during peak demand may help delay or reduce the amount of future rate increases.

– Additional notification requirement imposed on IOUs – MEC has waived since 2004

• Municipal Utilities specifically asked to respond by March 14, 2014– Should peak alert rules be rescinded or changed? – Do peak alert notification requirements conflict with other

communications of the utility?– Describe any recent studies re: customer responsiveness to utility

notifications via the media of an approaching peak demand– Do utilities load control programs more effectively reduce peak usage than

the peak alert notifications?


EPA Carbon Emission Regulation

• New Source Performance Standards – for new plants – Jan 8, 2014. APPA Comments:

“The American Public Power Association (APPA) is extremely disappointed with the re‐proposed New Source Performance Standard for new coal and natural gas‐fired power plants published in the Federal Register by the U.S. Environmental Protection Agency (EPA) today. In our view, this re‐proposed rule effectively precludes coal going forward as a resource for electricity generation. This will limit our future resource options and could likely lead to higher electricity rates in the coming years.”


EPA – Rules for existing plants

• Draft Rules expected to be filed June 2014• Dec. 12 ‐ IAMU/muni stakeholders met with IUB/OCA/EPA/DNR/other utilities to discuss possible impacts on existing utilities

• Focus on Energy Efficiency efforts likely• New York Times Article today –

– “EPA Staff Struggle to Create Pollution Rule” – want lawsuit proof regulation

– most significant action ever taken by U.S. to curb climate change


IUB comments cont…• IUB filed Comments w EPA ‐ “allow states to include a

wide variety of state programs and actions as the best system of emission reduction”

• State programs include: – Proven and cost‐effective energy efficiency programs– Investments in renewable energy– Programs to encourage investment in renewables, emission

control equipment, and increased plant efficiency– Other state policies to encourage investment in renewables– Any action taken by a utility that has the effect of reducing

CO2 emissions• Set base year in range of 2000‐2005


Legal issues

• Hawkeye Land• Little Sioux• Eagle Point Solar• FEMA


Hawkeye Land

• IAMU ‐ “joint utility intervenors” – Hawkeye Land – Does IUB have jurisdiction and whether “pay and go” statute violates the “just compensation” guarantees of the U.S. and State Constitutions.

– This case has been going on for a long time– 10‐14‐2010 – ALJ denied relief – HL appealed– 9‐30‐2011 – IUB affirmed – 10‐24‐2011 – HL petitioned Dist. Ct to judicial review IUB– 12‐31‐2012 – Dist. Ct. affirmed IUB– 9‐4‐2013 – HL appealed to Iowa Supreme Court

• No word yet on when case will be decided


Little Sioux – Gas Replacement Tax

• Little Sioux appealed a decision by the Department of Revenue – upholding the Constitutionality of Iowa’s gas replacement tax

• Sept. 20, 2013 ‐ hearing was held in Polk County District Court– Judicial review of whether the Dept. of Revenue made the right decision in upholding the tax

– Arguments on behalf of Dept. of Revenue by Don Stanley and Jim Miller, AG’s office.

– No intervention by utilities … YET• Rumored legislation


Eagle Point Solar• Dubuque entered Purchase Power Agreement to buy

solar power from Eagle Point ‐ array on roof of city building

• Alliant claimed violation of exclusive service territory law• Eagle Point asked IUB for ruling – IUB agreed with Alliant

– that sale violated exclusive service territory law• E.P. appealed and district court reversed IUB – so court

found that Eagle Point wasn’t a utility and so the exclusive service territory law didn’t apply

• Decision stayed, pending appeal• Supreme Court to heard oral arguments January 22–

decision could be as early as 6 weeks


• Claims made for winter storms of 4‐9‐13 – 4‐11‐13• Sanborn ($69,000); Lyon REC ($4.5M); Iowa Lakes REC

($145,000); Osceola Electric REC ($14.5M)• Emergency repairs made and FEMA payment received• Payment for conductor replacement denied• Initial appeal submitted to Homeland Security October 28, 2013. • Homeland Security appealed to FEMA – Dec. 24, 2013. FEMA has

90 days but likely to get extension• HCR5/SCR102 unanimously passed Iowa GA the first week of

session. – Asks FEMA to reconsider “detrimental policy decision denying

storm recovery funding”

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