Utilities Iowa Association of Municipal Utilities December 4 – Cedar Falls December 5 –...

Iowa Association of Municipal Utilities

• December 4 – Cedar Falls• December 5 – Muscatine• December 6 – Ankeny

• December 7 – Atlantic• December 10 – Orange City• December 11 - Algona


Agenda❶ State legislative report

a. Election results and implicationsb. Educating new legislators (thumb drive tour)c. IAMU legislative prioritiesd. Other legislation to watch

❷ State regulatory report❸ Federal update❹ NESHAP RICE in context of MISO market❺ Energy Services Report❻ Management policies❼ Mutual aid and safety/loss update


Agenda - Today Only @ CFU①(c) Legislative Priority – Transmission Investments❺ Energy Services Report (except DR/Breda study)❹ NESHAP RICE in context of MISO market⑤ Energy Services – DR/Breda study❶ State legislative report

a. Election results and implicationsb. Educating new legislators (thumb drive tour)c. IAMU legislative prioritiesd. Other legislation to watch

❷ State regulatory report❸ Federal update❻ Management policies❼ Mutual aid and safety/loss update


IAMU Priority1. Transmission

• Right of First Refusal (ROFR) – states get authority to chose who builds transmission– Competitive bidding vs. incumbent ROFR

• Why is this important to you? – Investments are hedge against rising costs– Muni investments lower costs - consumers win;

Iowa wins– Early investments verify value– FERC has clearly signaled value of joint investment


Actions Supporting Investment

• Legislation passed in other states• Meeting with key committee Chairs • IAMU working group to establish principles

and negotiating strategy• Expect to work with other utilities on issue -

Hope to have utility industry agreement• Meeting with IUB (10-2-12) – background

slides presented by Anne Kimber follow…


Transmission Investment History

• Joint owners in MEC baseload coal plants on Mississippi and Missouri Rivers got share of transmission with generation– Examples: Atlantic, Cedar Falls, Eldridge,

Montezuma, Tipton, Waverly, and NIMECA members– Those in MISO market (in Louisa, Neal 4, Walter

Scott 3, Walter Scott 4) • Formerly received MAPP Schedule F revenues• Now receive MISO Attachment O revenues under Cedar

Falls Utilities (CFU is a MISO TO)


• Midwest Municipal Transmission Group (MMTG) is a 501(c)6 non-profit organization. It was founded in 2001 by IAMU, Minnesota Municipal Utilities Association (MMUA) and Central Minnesota Municipal Power Agency (CMMPA): – “…service, assistance and promotion of joint efforts relative to the planning,

construction, ownership, investment, operation, maintenance, administration of electric transmission and/or power supply facilities or resources.”

• Today MMTG has 56 members in Iowa, Illinois and Minnesota• In Iowa, municipals as part of the Midwest Municipal Transmission

Group (MMTG) won investment rights in MidAmerican facilities as part of a FERC market power settlement in 2005. – Quad Cities West project– Grimes Granger line

• Iowa municipal investments via Iowa Public Power Agency

Transmission Investment History


Joint Financing Legislation

• IPPA grew out of Joint financing legislation in 2001 that changed Chapter 476A to allow joint financing of facilities, including transmission.

• Note: HF 2144 Transmission investment legislation in 2012 enables cities or power agencies to own transmission beyond Iowa and contiguous states.


IPPA…• Is a 28 E entity whose purposes include (from

Articles of Incorporation):– “…purchase or construct facilities and otherwise exercise all

powers conferred by Chapters 28E, 28F and Sections 476a.20 through 476A.36 (Code of Iowa, 2005, as amended.. and issue its public bonds or obligations as …necessary…to carry out its purposes.”

• 16 municipal investors participate via the Iowa Public Power Agency (IPPA)

• IPPA receives Attachment O revenue for its investments via CFU


Muni investments in CAPX

• Municipal utilities, including 3 in Iowa, are participating in CAPX via the Central Minnesota Municipal Power Agency (CMMPA)– 345 kV Brookings Line– CMMPA is a MISO Transmission Owner


Municipal Transmission investments bring value to Iowa

• For municipal electric utilities:– Investments are a financial hedge against rising

transmission costs– Municipal participation demonstrates a

commitment to participating and contributing to the collective responsibility of improving the regional transmission system

– Appropriate that cities carry their weight


Municipal Transmission investments bring value to Iowa

• For all load: municipal investment contribution reduces total costs of transmission investment: benefits all load paying for transmission.– Access to tax-free bonds provides munis with lower

cost debt financing than investor-owned utilities– Public power overhead expenses are lower than IOUs– Munis do not pay or include federal income tax in

their rates– Muni participation in transmission planning serves

the public interest


Utility Net Revenue Requirement

MidAmerican $74,352,600

Cedar Falls $1,960,530

Atlantic $1,123,036

IPPA $303,010

Eldridge $123,707

Pella $741,438

Montezuma $69,547

Tipton $25,148

Total MEC zone $78,699,017

Rate per kW-month $1.67

MISO updated OATT Schedule 9 September 26 2012


Need for Ongoing Partnerships

• We expect transmission investment to ramp up, with increasing costs to all load

• Enabling the public to invest in transmission can reduce transmission costs for all

• Partnerships: wider public awareness of the benefits of new transmission, may facilitate project development


FERC Order 1000 possibilities

• More efficient and cost-effective regional planning

• Local/regional planning consider state Public Policy requirements

• Efficient and cost-effective transmission solutions?

• FERC Removal of Right of First Refusal for MVPs and other projects which have cost-sharing

• MISO compliance filing October 11, 2012…


FERC Order 1000 in Iowa….

• Some ideas:– Robust stakeholder process to ensure that

transmission constructed in Iowa meets Iowa’s public policy objectives

– IUB and OMS provide transmission engineering study results to stakeholders – more information sharing

– Iowa include requirement that projects built in Iowa provide opportunity for municipal investment on the MidAmerican-IPPA or CAPX-CMMPA model

– Next steps….


❺ Energy Services

• E-PAYS® • Other Energy Services Programs• Demand Reduction Strategies - Breda Study


Energy Services

• The Iowa Energy Bank provides loans for energy efficiency or renewable projects >$100,000 to local governments and non-profits

• IAMU’s E-PAYS® program extends program to smaller projects

• E-PAYS = Efficiency – Pay As You Save


Dept. of Admin. Service’s Energy Bank Loan Terms & Process

PLAN

REVIEW

APPROVE

FINALIZE LOAN

As low as 1% APRClosing costs 2%Loan servicing 0.25% annually for effective APR of 1.67%

$100,000 minimum


• Sub-loan program• Expands energy efficiency projects • Available to IAMU members• $1.2 million fund


Five program areas1. Distribution system loss reduction and smart

grid applications2. LED Streetlight purchase3. Community Solar Photovoltaic systems4. Community Energy Efficiency loan pilot project5. Energy Efficiency in water and wastewater

treatment


Distribution System Loss Reduction and Smart Grid Applications

– Reducing system energy losses– Implementing measures that

reduce demandTarget:

$400,000


Possible Distribution System Measures– Eliminating unmetered electric usage– Implementing a meter testing program– Measures that improve power factor– Conservation voltage reduction


Possible Distribution System Measures– Replacing oversized conductors– Transformers

• Replacing older, inefficient transformers• “Right sizing” of transformers

– Demand reduction strategies• Load control measures• Smart grid• Customer feedback devices


LED Street Light Financing• Continuance of joint purchase

agreement (IAMU’s current pricing is good through January 12, 2013

• Utilities may borrow funds to purchase additional fixtures

• Program limited or capped at the value of the loan available (approximately 450 fixtures)

Target: $200,000


Solar: Two concepts– Community solar photovoltaic

projects– Loans to residential and/or

commercial customers

Target: $200,000


Community Solar Photovoltaic• Projects similar to Farmers

Electric Cooperative Community “Solar Garden” in Kalona

• Customers purchase panels on a jointly owned array and receive credit for the share of energy generated by that panel

Target: $200,000


Solar: Residential– PV or solar hot water– Federal Tax Credit (12/31/2016)

• 30% of cost; no upper limit • Primary or secondary residence; not

rentals– State of Iowa tax credit

• 50% of federal credit (15% of cost) up to $3,000

• Up to $1.5 million a year; only $120k so far in 2012 has been used


Solar: Commercial– PV or solar hot water– Federal Tax Credit (12/31/2016)

• 30% of cost; no upper limit – State of Iowa tax credit

• 50% of federal credit (15% of cost) up to $15,000

• Up to $1.5 million a year; only $120k so far in 2012 has been used


Residential Solar Scenario• 4 kW solar PV would generate app. 5,200 kWh/yr• 2012 ave. installed cost in Iowa = $4.86/watt• Total installed cost to customer = $19,440• Federal tax credit = $5,832• State of Iowa tax credit = $2,916• Net cost to customer = $10,692• Loan payment = $69/mo. for 15 years @2%


Solar Links– Federal tax credits: http://

www.energystar.gov/index.cfm?c=tax_credits.tx_index

– State tax credits: http://www.iowa.gov/tax/business/solarcredits.html

– Open PV website: www.openpv.nrel.gov

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index



http://www.iowa.gov/tax/business/solarcredits.html



http://www.openpv.nrel.gov/


Residential Loan Pilot Project

– 3-5 IAMU member pilot communities

– Utility makes 0% loans to customers to make energy efficiency improvements

– On-bill financing for loan repayment

Target: $200,000


Residential Loan Pilot Project-Workflow1. Energy audit is performed on customer’s home

– Qualified utility employee OR– Qualified third-party auditor

2. Energy audit recommends cost-effective measures that could be financed


Residential Loan – Eligible Measures 1• Building Envelope Improvements (insulation; air

sealing and weatherization)• HVAC System Improvements

– High-efficiency natural gas furnaces (if utility sells NG)– ENERGY STAR central air conditioning– ENERGY STAR air source heat pumps, including

ductless (mini-split) ASHP systems– ENERGY STAR geothermal systems– ECM motor replacement for air handlers


Residential Loan – Eligible Measures 2• ENERGY STAR domestic hot water systems

– Solar thermal– Heat pump water heater– Gas demand (gas utilities)– Gas condensing (gas utilities)– Gas storage (gas utilities)


0% Loans to the Customer-On Bill Payments

Loan Amount Term (months)$1,000 or less 12 months$1,001-$2,000 24 months$2,001-$3,000 36 months$3,001-$4,000 48 months$4,001-$5,000 60 months


Energy Efficiency in Water/Wastewater Treatment

– Some of the biggest energy costs for a city

– Assess the water and energy efficiency potential of systems

– Assist cities with significant water and energy efficiency potential to develop and complete projects to reduce water and energy consumption

Target: $200,000


Possible Water/Wastewater Measures– Comprehensive system audit– Variable frequency drives (VFD’s) for electric motors

(workshop on 11-13-12 well attended!)– Building envelope and lighting– Leak detection– Customer-side water conservation measures– Improved metering– Alternative treatment technologies


Loan Terms (from IAMU to utility)• 2% initiation fee passed through to DAS• $300 IAMU loan processing fee• 2% interest rate:

– 1% interest paid to DAS on loan proceeds– 0.25% annual servicing fee paid to DAS– 0.75% paid to IAMU to cover admin expenses

including loan reporting to DAS• Up to 15 year repayment schedule


Loan Agreement Process• Pre-Application• Review by IAMU and approval• Develop loan agreement• Signature by utility and IAMU


Other Energy Services

• Whole Town Audit concept continues– Audits of city buildings, facilities, infrastructure– Audits of key account facilities

• Rate studies for small systems• Support for energy grant

– NEW OPPORTUNITY: Sustainable Community Demonstration Funding


❹ NESHAP RICEIn Context of MISO Market

• What to do with Compression Ignition Reciprocal Internal Combustion Engines (CI-RICE) depends to significant extent on what happens with the MISO capacity market


Changing Capacity Market in MISO

• BASICS: For each kW of coincident demand, there must be a kW of generation, plus a reserve margin

• TODAY:– Utility or its power supplier plans resources to

meet customer peak load, plus a reserve– MISO operates a voluntary monthly auction for

supplemental capacity


Resource Planning Today

1. Utility forecasts required capacity plus reserves

2. Builds needed resources

3. Voluntary Monthly Auction Available


Resource Planning 6/1/131. Utilities send MISO their forecast peak demand & coincident

MISO peak (by 11-1-12)2. MISO calculates unforced capacity (UCAP) value for each

resource3. Market participants ensure they have sufficient UCAP to

meet coincident peak demand4. MISO opens auction & receives offers for generation, DR,

and behind-the-meter generation (in $/MW)5. All offers needed to meet demand + reserve clear auction

and receive same clearing price6. Utilities purchase capacity at auction clearing price ($/last

MW in)


Resource Planning 6/1/13

7. If a utility has not purchased sufficient credits to cover forecast load (not likely), it pays for the deficiency at 2.748 times the MISO established Cost Of New Entry (CONE) or 2.748 x $97,650 or $268,342.20/MW-yr.

8. Utility can opt out of auction by submitting plan to meet requirements from its own (or supplier’s) resources (by 3-11-13)


Forecasts based on

econometric methods

1. Peak Demand Forecast & Required Capacity Send to MISO


2. MISO Calculates Needed Capacity and Reserves for Each Zone


3. Resources Offered in Auction (March 27-29, 2013)

$0/MW-Yr.$

$30,000/MW-Yr.$

$65,000/MW-Yr.$

$35,000/MW-Yr.$

$34,000/MW-Yr.$

$10,000/MW-Yr.$$95,000/MW-Yr.$


3. Auction Clearing Price(results 4-5-13)

$0/MW-Yr.$

$30,000/MW-Yr.$

$35,000/MW-Yr.$

$34,000/MW-Yr.$

$10,000/MW-Yr.$

$95,000/MW-Yr.$

$65,000/MW

$65,000/MW

$65,000/MW$65,000/M

W$65,000/MW

$0

$65,000/MW-Yr.$$65,000/MW-Yr.

Clearing Price


Utility can opt out of auction by submitting Fixed Resource Adequacy Plan to meet requirements from its own (or supplier’s) resources

FRAP or Auction?

Opinions vary regarding the value of FRAP


Capacity Market Risk

• If utility has no generation (owned or rented from supplier), it must buy credits at the auction clearing price

• Next auction price is unknown• New generation will be expensive

– Basic commodities (steel, copper, etc.) and emission requirements are drivers


Capacity Market Risk/opportunity

• Capacity shortage expected by 2016– Age and environmental regulation, e.g.,

mercury rule in 2015, will result in plant retirements; fewer generators in auction mean higher prices

– Many power plants will be out of service for months of retrofits for new bag houses, scrubbers, and other pollution control technology

• Long-run? Costs should approach CONE


Market Risk/Opp. – Price Separation

• Resource values differ by zone

• Traded as zonal resource credit (ZRC)

• Zone 3 may have import restrictions, so load served by resources in another zone may pay more

1

2

3

456

7


Capacity Market Takeaways

• The new market fundamentally changes the way utilities do resource planning

• There are many new complexities• Initial risk is probably low, intermediate risk

(2015-2020) may be higher, risk may be lower in long-run, but prices will be higher

• Demand response is integral to planning• There is still much to be learned/understood


Capacity Market Takeaways• Check with power supplier:

– What load for your utility was included in the forecast (if known)?

– Will you be covered by FRAP or the auction?– If served by resource in another zone, will it receive zone 3

ZCRs after the 2-year expiration of grandmother provision?– How will partial MW ZCRs be handled?

• If not currently in MISO, follow developments with WAPA, Basin Electric, CIPCO, etc.

• See report for other risks/opp. to consider


Market Risk Mitigation Strategies

• It’s all about peak demand – use all cost effective measures to reduce it:

• Load controls – AC, water heaters, municipal loads

• Energy efficiency programs - lighting, motors, insulation

• Time of use and interruptible rates

• Behind the meter gen. – utility’s or customers’

• Dynamic voltage reduction

• Thermal & battery storage


Evaluate Strategies to Lower Peaks

• Peak demand drives capacity, transmission, and rents. Example:– Capacity @ $60/kW-year– Transmission @ $28/kW-year– Directly Assigned Facilities @ $24/kW-year– Total peak demand cost = $112/kW-year

• Compare with A.C. switches at ~$15/kW-year(over 15 years, based on IAMU project costs without grant support)


Market Risk Mitigation Strategies

• Rely on joint action for expertise to operate in the market and to build new generation

• If dependent on non-muni power supplier, put verification ahead of trust (ask questions and know details of your contract)

• Focus on what you can affect – distribution reliability and customer costs

• Educate policymakers and public


EPA’s NESHAP RICE Rule

• Diesel electric generators must be compliant with EPA’s NESHAP RICE rule by May 3, 2013 or run only for emergencies (ice storms, etc.)

• Proposed amendments provide up to 100 hours of operating time, including 50 hours for peak shaving (1st two years)

• A decision on proposed amendments to the rule is expected December 14, 2012, but may not be available in written form until March


What to do about RICE?

• Check with power supplier/JAA to determine if capacity is needed and if credits will be available to utility

• Consider filing by 1-3-13 for one-year extension, even if you ultimately decide not to proceed with retrofit

NOTE: The rule does not permit joint filing for extension. IAMU has sample request that has been reviewed by EPA. See www.iamu.org

http://www.iamu.org/


What to do about RICE?

• Follow information in Taskforce Report and supplements about the value of RICE units in the MISO capacity market

• Before replacing RICE units, consider higher value of alternatives, i.e., larger, more fuel efficient, strategically located generation


Why manage peak demand?

• Risk management—something utility can control– New tools

• Maintain reliable & cost-effective service– Avoid charges:

• Demand• Transmission• DAF

– Reduce energy purchases during high demand periods

– Improve demand factor

49%51%

Division of Demand and Energy Based Power Supply Charges

Demand Based Charges Energy Based Charges


Why manage peak demand?

• Transmission & generation owners– Delay or reduce need for new infrastructure

• Compare supply side resource to demand side resource

• Midwest ISO Capacity Market– Market participants purchase capacity in auction or

provide own capacity – Participants with excess capacity could make money– Demand response and efficiency could be capacity

resources


A Brief Review

• Direct Load Control• Distributed generation—mainly diesel generators• Energy efficiency• Dynamic Voltage Regulation• Smart grid: new tools

– Time of use pricing– Advanced control of grid & customer loads– Integration of distributed generation– Electric vehicles


Key Questions• What demand-based charges apply?

• How can charges be reduced by managing peak?

• What is the risk of these charges going up?

• Is it a good business investment?

• How will customers respond?


Why are we doing this?

“Chance favors the prepared mind.”Louis Pasteur

“We haven’t got the money, so we’ve got to think!”

Ernest Rutherford (British physicist, Noble prize, 1908)


Breda Example

• Breda Municipal Electric System– Small utility looking for ways to

manage costs– 291 Electric Customers– Power suppliers: WAPA &

MEAN– Active load control since 1982– CDBG grant to study additional peak reducing, cost

saving measures


Breda Example

• Demand-based charges– Demand: Monthly– Transmission: Monthly– DAF Charge: Based on historical peak

• Peaks set by heating and cooling– Summer: mid afternoon peak– Winter: early morning peak


Breda Example

• Strategies examined:1. Improvements of existing load control system2. Shifting municipal loads3. Rebates for air source and geothermal heat

pumps4. Community solar project5. Alternative rate structures: e.g., interruptible

or time of use


Direct Load Control

• Breda has 30 year old load control system– Switches on air conditioners and water heaters– Utility monitors daily load– Initiate control to keep demand under target– Dispatchable resource allowing utility to directly

monitor the effect– Good customer acceptance

• Analysis showed improvements, including replacement of switches to be most cost-effective strategy


Shifting Municipal Loads• Examined city facilities for peak

reduction potential• Looked at largest loads

– Considered energy efficiency potential– High efficiency lighting– High efficiency heating/cooling– Load control

• Looked at water/wastewater operations, especially sequencing of pumps at water plant

• Not all facilities had opportunities


Shifting Municipal Loads

• Water plant: 62 kW of pumps– Well pumps → Detention tank– Transfer pumps → Clear well– High service pumps → Water tower

• Strategies:– Fill all tanks prior to expected peak event– Backwash after peak event– Adjust fill set points during peak event


Energy Efficiency

• Use energy efficiency to reduce peak demand– Heating/cooling or equipment that runs

continuously best options• Heating & Cooling—install high efficiency

equipment– Air conditioners– Heat pumps

• Other: Commercial lighting, IT Servers, Industrial loads


Energy Efficiency Example

• Breda– Air conditioning summer peak, heating winter

peak– No natural gas—propane and electricity heating

sources• Incentives for air-source & geothermal heat

pumps– Reduce peaks– Increase electricity sales– Customers save money

Heating SourceCost per Million

BTU OutputPropane Furnace or Boiler $25.19Air-Source Heat Pump $13.96Geothermal Heat Pump $6.57


Solar Options• Community Solar

– Customers invest in solar– Receive monthly credit– Utility retains ownership

• Customer owned solar– Customers install/own solar

and receive tax credit• Utility may provide incentive;

must determine billing Farmers Electric Cooperative of Kalona Solar Garden

• Analysis of 3 years of hourly load & weather data showed ~70% of nameplate capacity available during 2 – 3 p.m. summer peak


Solar Availability

0%

10%

20%

30%

40%

50%

60%

70%

80%AC

Out

put a

s Pe

rcen

tage

of N

amep

late

Time of Day

Summer Solar Output (July 22)

Due south (180o) WSW (240o)


Solar Availability

Scattered Clouds

Clear Sky


Solar Availability

“AMP understands the value of solar as an on-peak resource. During the day, especially hot summer days, when spot market prices are highest, solar generation is at its best in terms of the amount of energy generated. Having access to this resource helps keep participants off the spot market and reduces the cost of power.”

Marc Gerken, President and CEO of American Municipal Power at ribbon cutting celebration for 3.54 MW Napoleon Solar Facility in Ohio


Rates

• Demand Rates• Interruptible Rates

– Rate incentive to customer with large load that can be interrupted

• Time of Use Rates– Cost of wholesale power varies with time/demand– Effective if utility receives price signals from power

supplier– Can be implemented simply– Financial benefit to utility and customer


Conclusions from Breda Study

• Managing peak demand helps maintain lower rates

• Demand based charges expected to rise• Quantify cost of peak demand• Quantify how much peak demand can be

reduced & how it will impact wholesale rate• Evaluate multiple strategies

– What works best for your situation


❶ State Legislative Report

1. Election Report and Thumb Drive Tour2. IAMU’s legislative priorities

a. Transmission investments - right of first refusalb. Water service within two miles of a cityc. Tax credits for community renewables

3. Other legislation

Julie SmithLegislative and Regulatory Counsel


Election Report

• Senate – 26 D -23 R– Late Senator Pat Ward’s seat – Dec. 11 Special

Election: Charles Schneider (atty /WDSM City Council) v. Desmund Adams (atty/small business owner)

– Merlin Bartz & Shawn Hamerlinck– Janet Peterson – former House Commerce Chair


Senate Democratic Leaders

• Majority Leader – Mike Gronstal (Council Bluffs)• New Senate President – Pam Jochum (Dubuque)• New President Pro Temp – Steve Sodders

(Marshalltown)• New Majority Whip – Joe Bolkcom (Iowa City)• Assistant Majority Leaders –

– Amanda Ragan (Mason City)– Bill Dotzler (Waterloo)– Matt McCoy (Des Moines)– Wally Horn (Cedar Rapids)


Senate Republican Leaders

• Republicans– New Minority Leader - Senator Bill Dix (Dike) – New Senate Whip - Rick Bertrand -Sioux City– Assistant Leaders :

• Roby Smith (Davenport) • Joni Ernst (Red Oak)• Tim Kapucian (Keystone) • David Johnson (Ocheyedan)• Randy Feenstra (Hull)


Election Report – IA House

• House of Representatives 53 R – 47 D• D’s picked up 7 seats • Incumbents defeated – Assistant Leader

Renee Schulte, Nick Wagner, Bob Hager, Ross Paustian, John Wittneben

• Just last week – Brian Quirk, (New Hampton) resigned to take the GM position at New Hampton Municipal Light Plant – special election – January 22


House Democratic Leaders

• Minority Leader Kevin McCarthy (Des Moines)

• Assistant Leaders– Ako Abdul-Samad (Des Moines)– Mary Mascher (Iowa City)– Mark Smith (Marshalltown) – Mary Gaskill (Ottumwa)


House Republican Leaders

• Speakers Kraig Paulsen (Hiawatha)• Majority Leader Linda Upmeyer (Clear Lake)• Speaker Pro Temp Steve Olson (DeWitt)• Majority Whip Chris Hagenow (Clive)• Assistant Leaders

– Walt Rogers (Cedar Falls)– Jeff Smith (Okoboji)– Matt Windschitl (Missouri Valley) – Joel Fry (Osceola)


Commerce Committee Changes

• New Chair – Peter Cownie (West Des Moines, formerly Chair of State Government)

• Two key members, familiar with utility issues are off• Former Chair Chuck Soderberg (works for NIPCO)

was appointed to chair Appropriations Committee – Ranking Member Brian Quirk resigned last week to

accept GM position at New Hampton• New Ranking Member – Chris Hall (Sioux City)


Other Committees

• Local Government Committee – House– Jason Schultz, new Chair– New Rep. Art Staed, Ranking Member

• House R’s have appointed Chairs• House D’s have appointed ranking members

and Committee members


What does election mean for next two years?

• Same split as last two years – Republican Governor/Democratic Senate/Republican House

• Most groups like split government• House Democrats more relevant – easier for factions to

derail votes with closer margins• What won’t happen - difficult social issues and labor

issues • What may happen – “kinder gentler” commercial

property tax, more education reform• Already staff being warned not to plan vacations prior to

July 1, 2013 – (FY 14 budget starts)


2012-2022 Districts


Legislators Regional Meeting #1 Cedar Falls

• LaPorte City – used to be in Senate District 12 – NOW in Senate District 36 – included in more central part of state in Tama and Marshall County – Senator Steve Sodders (D - Marshalltown)

President Pro Temp/Marshall County Sheriff– New Rep. Dean Fischer (R)– farmer resides in

Garwin– https://www.legis.iowa.gov/DOCS/Resources/R

edist/2011/2011-03-31/HouseStatewide8x11.pdf

https://www.legis.iowa.gov/DOCS/Resources/Redist/2011/2011-03-31/HouseStatewide8x11.pdf




Regional Meeting #1

• Dike – Senator Bill Dix (R)– New Senate Minority Leader

(farmer)– Representative Pat Grassley (R)(farmer)

• Vinton– Senator Tom Kapucian (R)– (farmer)– Rep. Dawn Pettengill (R)(ARRC) former mayor

• Cascade, Bellevue, Maquoketa– Senator Tod Bowman (D)(teacher) – Rep. Brian Moore (R)(farmer/livestock transportation)


Regional Meeting #1

• Independence – Senator Brian Schoenjahn (D) (former mayor/teacher)– New Rep. Bruce Bearinger (D) (Oelwein City Council/ teacher –

Jessup High (Ag and Biology)

• Waverly and Readlyn – Senator Brian Schoenjahn (D) (former mayor)– New Rep. Sandy Salmon (R)(former U.S. Marine/farmer)

• Osage– Senator MaryJo Wilhelm (D)(real estate appraisal business/former

county supervisor)– Representative Josh Byrnes (R)(teacher/NIACC community

college/farmer)


Regional Meeting #1

• Waterloo, Cedar Falls, Hudson Delegation– Senator Jeff Danielson (D)– Senator Bill Dotzler (D), Asst. Majority Leader– Representative Walt Rogers (R), Asst. Majority

Leader– Representative Anesa K. (D)– Representative Bob Kressig (D)– Representative Deb Berry (D)


Legislators – Regional Meeting #2 Muscatine

• Durant & Wilton (Wilton strange MAP)– Senator Bob Dvorsky (D) – former corrections– New Rep. Bobby Kauffman (R) - farmer

• Muscatine– New Senator Chris Base (D) - firefighter– Rep. Mark Lofgren (R) – financial advisor

• Long Grove & Eldridge– New Senator Chris Base (D) - firefighter– “New” Rep. Frank Wood (D) – teacher- school

administrator /former mayor of Eldridge/former Senator


Regional Meeting #2

• Mount Pleasant– New Senator Rich Taylor (D)– former prison

guard/AFSCME– Rep. Dave Heaton (R)– former

teacher/restaurant owner


Legislators – Regional Meeting #3 Ankeny

• Waukee– New Senator – late Senator Pat Ward – Dec. 11 – New Rep. Rob Taylor (R)(businessman)

• Lamoni– New Senator Amy Sinclair (R) (Allerton) (County

Supervisor/farmer)– Rep. Joel Fry (R)(social worker/minister)

• Brooklyn & Montezuma– Senator Tim Kapucian (R)(farmer)– New Rep. David Maxwell (R)(Gibson) (farm tiling

business)


Regional Meeting #3

• State Center– Senator Steve Sodders (D) Pres. Pro Temp.

Marshall County Sheriff– New Rep. Dean Fischer (R) farmer resides in Garwin

• Marshalltown– Senator Steve Sodders (D) – Pres. Pro Temp– Rep. Mark Smith (D) – Asst. Minority Leader

(Marshalltown) (minister/substance abuse counselor)


Regional Meeting #4 - Atlantic

• Villisca & Lenox– Senator Joni Ernst (R)– Asst. Minority Leader– Rep. Cecil Dolecheck (R)

• Anita & Greenfield– New Senator Jake Chapman (R)– Rep. Clel Baudler (R)

• Atlantic & Corning– Senator Hubert Houser (R)– Rep. Jack Drake (R)


Regional Meeting #4

• Harlan– Senator Nancy Boettger (R)– Rep. Jason Schultz (R)

• Wall Lake– New Senator Mark Segabart (R)– Rep. Gary Worthan (R)


Legislators Regional Meeting #5 – Orange City

• Hawarden, Sioux Center, Alton and Orange City– Senator Randy Feenstra (R), Asst. Minority Leader– Rep. Dwayne Alons (R)


Legislators Regional Meeting #6 - Algona

• Rockford – Senator MaryJo Wilhelm (D)– New Rep. (BQ)

• Algona, Titonka– New Senator Dennis Guth (R)– Rep. Henry Rayhons (R)

• Alta– New Senator Mark Segebart (R)– Rep. Gary Worthan (R)

• Coon Rapids– New Senator Mark Segebart (R)– Rep. Dan Mulhbauer (D)


Regional Meeting #6

• Pocahontas & Laurens– Senator Daryl Beall (D)– Rep. Tom Shaw (R)

• Spencer, Milford, Emmetsburg– Senator David Johnson (R)– New Rep. Megan Hess (R)

• Lake Mills & Bancroft– New Senate Dennis Guth (R)– New Rep. Ted Gassman (R)

• Sibley– Senator David Johnson (R)– Rep. Jeff Smith (R)


Election Report – Legislation 101

• Why is it important for you to participate?• Need everyone in district to show leadership

and talk to legislators about these issues– Need 51/26 votes to pass a bill

• Statewide grassroots• MuniPAC is not well funded – very small

compared to PACs of other utilities


Educating New Legislators

• Every 10 years – huge turnover w/ many new members – both houses/both parties– 12 New Senators – 24%– 26 27 New House members – 26 27%

• How can we educate them on our issues?– Meetings with boards/councils and facility tours– Active contacts during session– Thumb Drive Tour of Iowa’s Municipal Utilities


Educating Legislators

• Thumb Drive Tour – All legislators will receive key-shaped flash drive with introduction to IAMU and its members– Video intro of lobbying crew and Tour– Video intro to IAMU and member utilities– Video – Guide to Electricity…– LINK to interactive maps with contact

information about IAMU members (link is currently to static maps; live maps by early Jan.)


Utilities connections are key

• What should you do? • Ask legislators to meet with manager/staff/ board

and/or council• Short tour of facilities

– Present with thumb drive– Discuss key issues of interest that affect YOUR utility

• Make sure legislator knows the person to contact about utility issues

• Volunteer to host Friday or Saturday meetings with legislator during session


IAMU’s Legislative Priorities

1. Municipal investment rights in any Right of First Refusal (ROFR) legislation

2. Changes in planning and provision of water service within two miles of the city limits to improve economic development and city planning

3. Applicability of state renewable tax credits to community projects


IAMU Priority2. Water service areas

• Background of so-called “two-mile limit law”– Intended to facilitate joint planning by cities and

rural water utilities – 2000 court distinguished rural water districts

formed under chapter 357A from associations formed under chapter 504A and found that the plan-filing requirement does not apply to associations (court suggested a statutory change to clarify, but rural water is opposed)


Water Service AreasRecent Examples of Problems

• Nevada, Iowa– Exclusive territory claim by Central Iowa Water Assn.

(CIWA) forced Nevada to pay nearly $8,000 for right to provide service to an ethanol plant CIWA was unable to serve, plus over 3¢/1,000 gal. of untreated water needed for processing, plus right of CIWA to future purchase of treated water from city

– Nevada was 10 days late in making a $175,000 payment for city right to serve a planned DuPont plant, due to resignation of clerk. CIWA nullified agreement with demand for higher payment and additional purchase rights from city.


Water Service AreasRecent Examples of Problems

• Marshalltown, Iowa– Liberty Baptist Church constructs youth facility in city,

which planned to provide water service and fire protection

– July 2012 - CIWA blocks city from providing service under claiming exclusive right to serve property, even though its facilities cannot provide fire hydrant

– CIWA offers to allow city to install hydrant, but at rates CIWA specifies

– September 2012 – CIWA agrees to determine “fair” buyout price within 60 to 90 days


“Marshalltown Church between Rock & a Hard Place” – Times Republican 7-22-12


Water Service Areas

• IAMU pursuing multi-pronged strategy, including legislation with these provisions:– Both districts & associations must file plans with

council or board, as appropriate– Subsequent plan for replacement/upgrade– Notice to city regarding federal protection– Reciprocal 4 year obligation to provide service– Strengthened property-owner right to withdraw– Basis for fair compensation


IAMU Priority3. Community wind/solar Tax Credit

• Federal credit tied to home improvement• State credit tied to federal credit• IAMU will work with allies to allow state

credit to apply to an Iowa resident’s investment in a community wind or solar project


Other Legislative Issues

• Natural Gas Enforcement - IUB Civil Penalties Increase

• Stray Voltage –standards• Nuclear • Energy Efficiency Reporting Changes• Commercial Property Tax Reform• Telecom Tax


IUB - Natural Gas Enforcement Civil Penalties

• IUB to propose increasing natural gas Pipeline Penalties – • increase current maximum limits on pipeline penalties to

meet federal requirements. • Current federal level is $200,000/day/violation with a

maximum of $2,000,000 for a related series of violations, • IUB will be asking to raise the limit to $100,000/day per

violation with a maximum of $1,000,000 for a related series of violations

• U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) will accept lower level for the time being.


Existing IUB Civil Penalties - Gas

• Iowa Code Section 479.31 factors for determining penalty: – Size of utility– Gravity of violation– Good faith of utility

• $10,000/day – each day is a separate violation with a maximum of $500,000


Municipal Gas - Civil Penalties

• Bedford Municipal Gas Utility – failure to develop and implement a distribution management plan by August 2, 2011– At hearing Bedford testified that gas manager retired and personnel

was occupied with other activities– Eventually hired a consultant to help complete– $1,000 civil penalty assessed for failure to timely file . Based on small

size, fact that violation is serious but didn’t cause specific harm, and fact that now completed DIMP

– IUB said fact that Bedford didn’t want to expend resources to timely comply led to penalty

• Brooklyn Municipal Gas Utility – PSA-2012-0002– Ivan Webber made argument for leniency due to nonprofit nature of

utilities, size, and fact that citizens will pay fine


Stray Voltage

• RECs to push this issue again next session. • Fight between Farm Bureau and Trial

Lawyers


Nuclear Energy

• Unsure whether this issue will emerge again• MEC not saying they want it


Energy Efficiency Reporting

• There is some interest in changing the statutory requirements for reporting energy efficiency plans and results to the IUB

• IAMU is also interested in working with the IUB to use EIA data to satisfy most of what is now filed in ME-1/MG-1 and energy efficiency reports


Property Taxes

• Last session NO compromise – potential for 2012 election to change dynamics– Telecom Tax – rolled into property tax bill last

session• To get property taxes passed, Senate will

have to be at the table – greater likelihood that cities will get more consideration – good for municipal utilities


❷ State Regulatory Activityand Court Cases of Interest

• Pole attachment rules• MEC/IPL rate increase – automatic

adjustments• Electric service territory maps• Iowa Public Information Board• Consumer Records• Car wash sales tax exemption• Court cases of interest


Pole Attachment Rules

• Rules requested by IOUs subject to FCC regulation

• Final rule proposed by IUB excludes municipal utilities and RECs, which are exempt from FCC authority

• Exclusion based on existing IUB authority under Iowa Electric Safety Code


High Volume Transmission

• IUB reviewing pros and cons of competing High Volume Transmission Projects

• IAMU used docket as opportunity to argue for municipal investment rights– Our history of involvement from TransLINK through MEC

and CAPX investments, including authorizing legislation– How our investments reduce the overall costs of

transmission• Resolution will likely come after ROFR legislation• Municipal utilities should understand and take

advantage of investment opportunities


MidAmerican Energy RPU-2012-0001

• February 21, 2012 – MEC filed for $76 M (6.7%) limited rate increase based on additional costs re: – Environmental compliance– Coal and coal transportation

• Revenue freeze agreement through Dec. 2013 UNLESS return on equity falls below 10% - 2011 –8.94%


MEC Rate Case cont.

• On October 8, 2012, IUB approved settlement agreement establishing additional charges for calendar years 2012 and 2013. – Due to higher costs of environmental compliance

and coal and coal transportation. – Fixed Increase annual revenue in 2012 – 4%

$38.7M– Fixed Increase revenue in 2013 – 6.7% - $37.3M

• Increase ends on Dec. 31, 2013


Alliant/IPL natural gas rates RPU-2012-0002

• May 25, 2012 - Alliant/IPL sought natural gas rate increase (5.6%)

• November 26, 2012, IUB approved settlement w/OCA and Iowa Consumers Coalition– IPL’s permanent annual revenue from natural gas service

rates to increase by $10.5 million (4.8 percent) – includes customer bill credits for utility tax savings that

will reduce customer rate impacts over the next three years.

• Alliant/IPL provides natural gas to approx. 240 cities in Iowa


Alliant/IPL Natural Gas Generation – RPU-2012-0003

• On November 14, 2012 – filed for generating certificate and for advanced ratemaking principles for proposed 600-megawatt natural gas-fired electric generation facility in Marshall County.

• Seeking 11.25% rate of return• Proposed site near Sutherland plant – cost

of $650-750


Electric Service Territory Maps

• Updates as of Nov 1, 2011• Listing of IUB modification proceedings – see

example – Buchanan County – listing of boundary changes since 1999

• http://www.iowadot.gov/maps/msp/electrical/Buchanan_10.pdf

http://www.iowadot.gov/maps/msp/electrical/Buchanan_10.pdf




Iowa Public Information Board

• adopt rules • issue declaratory orders and

advisory opinions • conduct contested case

proceedings• request and receive information

from a governmental body as necessary to perform its duties, including the examination of confidential records that may be the subject of a complaint

• issue subpoenas

• train local government officials• disseminate information to

members of the public• prepare annual reports to the

Governor and the General Assembly describing complaints, Board proceedings, investigations, hearings conducted, decisions rendered

• make recommendations regarding future legislation related to open meetings/records.

We think they will work with us – they’re not a “gotcha” agency. Agency has broad authority:


Benefits to Local Government

• Will work with the AG and Ombudsman’s Office – one stop shop – all questions will be funneled through IPIB• ON an informal basis 1-800 # to call with questions and

website to include much information• Will work with municipal utilities to provide training

opportunities• A city can ask for an advisory opinion to address a

specific issue. – can be relied upon the same as an Attorney General’s opinion

or the opinion of Legal Counsel.


IPIB Members

• Executive Director who is an attorney • Three members from the media, three

members representing local governments and three public members

• All members are appointed by the Governor, subject to Senate confirmation. The initial members of the Board are to be appointed by September 1, 2012 and the Executive Director is not to be hired until July 1, 2013


Consumer Records

• Confusion remains over new exception to open records– IAMU requested legislation (SF 2058) to exempt

customer records from the right the public has to access public records under §22.2

– Utilities should be responsible in their use of customer information, e.g., by following Red Flag guidelines, but new Code section 388.9A does not make the records confidential


Car Wash Sales Tax

• One of the last bills to pass in the 2012 session exempted sales of water and electricity used in a commercial car was from sales tax– Applies to bills received after May 12, 2012 [CHECK May 25]– Stand-alone vehicle wash and wax facilities are presumed to be

100% exempt from sales tax and are not required to provide exemption certificate

– Secondary wash/wax facilities are exempt only for electricity and water used in providing wash and wax; not electricity used to operate office equipment or lighting or water used to clean the inside of a gas station or for irrigation

– If separately metered – not required to file exemption certificate


Car Wash Exemption Certificate

• Exemption certificate must state percent of electricity or water used for taxable wash and wax services, must detail how percent was calculated, and must distinguish summer and winter usage

• Certificate is valid for 3 years• Exemption statutes are strictly construed against the

taxpayer in favor of taxation – the car wash has the burden of proof re: the % claimed and is liable for any mistakes or misrepresentations made regarding the computation or for failure to notify the utility in writing of the % change, if required.


Car Wash Tax Credit

• If utility can’t adjust billing in time – utility must provide a credit for tax that should have been exempt


Legal Proceedings

• Railroad Right of Way Crossings– Hawkeye Land v. IUB– Hawkeye Land v. Franklin County Wind

• Replacement Tax• Ames Transmission


Railroad Right of Way

• Utilities won RR ROW legislation in 2001, establishing a one-time crossing fee of $750

• In a recent case before the IUB, Hawkeye Land (HL) challenged ITC’s payment of $750 for three crossings, which HL valued at $30,000 each

• HL alleged– §476.27 is unconstitutional because it allows a utility to

cross the ROW for a $750 payment rather than a determination of “just compensation”

– §476.27 doesn’t apply because HL isn’t a railroad and ITC isn’t a public utility


RR ROW – ITC Case

• The IUB decided in favor of ITC (upholding the crossing process) and HL appealed to District Court in Linn County.

• IAMU and other utilities jointly intervened (Denny Puckett, Sullivan and Ward, serving as attorney for utilities)

• This case is not yet decided


RR ROW - Franklin Co. Wind

• On May 11, 2012Hawkeye Land(HL) filed an injunction against Franklin County Wind (FCW) to prevent FCW installing 4 conduits to connect wind farm– HL claimed the crossings were an unconstitutional taking and

that FWC should have used eminent domain – Court granted injunction and ordered hearing on June 13

• May 21, 2012 – FCW filed motion to dissolve and vacate temporary injunction (Denny Puckett counsel for FCW)

• May 25, 2012 - Court vacated the temporary injunction – HL hasn’t shown irreparable damage if crossings go through

• June 6, 2012 – FCW filed motion to dismiss hearing – based on HL’s failure to pursue administrative (IUB)


RR ROW – Franklin Co. Wind

• July 25, 2012 - Court dismissed case due to failure to exhaust administrative remedies

• August 24, 2012 - HL appealed to IA Supreme Court – Sept. 12, 2012 – Court ordered “proof briefs” filed

within 50 days– Iowa Supreme Court could decide to hear the case,

which would likely mean they will consider the constitutionality of the railroad right of way statute. If they do not accept, the case will be remanded to Appeals Court.


RR ROW – Franklin Co. Wind

• IAMU to intervene in FCW case with other water and electric utilities – joint representation by Jeff Rosencrants – Former Alliant attorney– Now with Simmons Perrine (Cedar Rapids)


RR ROW – Municipal Crossings

• Modus Operandi is for HL to wait until construction is to commence and then file injunction to stop it – utility is either forced to pay exorbitant crossing fee OR sends construction crew home

• If your utility needs to make a railroad crossing, contact IAMU for update on status of the cases described here and seek legal advice. (Through his involvement in the cases described, Dennis Puckett, Sullivan and Ward, has become a valued expert. Contact information: 515-247-4712 or [email protected])


Replacement Tax

• Little Sioux Corn Processors – claims tax is Unconstitutional – violates equal protection clause – LSCP pays tax that other similarly situated consumer

don’t – bypass customers pay the tax/customers of local distribution companies don’t

– No rational basis to grandfather in bypass customers that were in existence prior to 1999

– Municipal utility gas service territories are unconstitutional because charge different rates for similarly situated companies


If found unconstitutional…

• Replacement tax would be eliminated and a new system would have to be implemented that assessed the tax on constitutional basis

• Likely a return to local and central assessments• Attorney General’s Office representing the Iowa

Department of Revenue• Waiting to hear outcome of August 23/24 hearing

– depending upon the outcome – utilities may want to intervene

• Unlikely to be ruled Unconstitutional


Ames Transmission Siting

• NDA Farms and Denise Albaugh v. IUB and Ames Municipal Electric System is a case appealing an IUB decision to allow Ames to proceed with construction of a transmission line from Ames to a substation north of Ankeny.– IUB predicated its decision on Iowa Code §306.46(1) allowing

a public utility to construct, operate, repair, or maintain its facilities within a public road right-of-way

– The legislation passed in 2004, almost 50 years after the NDA granted an easement for the road (1956).

– IUB applied statute retroactively ruling that Ames was not required to seek eminent domain authority


Ames Transmission Case

• On appeal, NDA makes the following claims:• The 1956 Easement, granted for “road purposes,” does

not include electric transmission lines and Ames must purchase or condemn a new easement

• Takings clause of 5th Amendment prohibits taking of private property for public use without just compensation

• If easement conveyed prior to §306.46(1) (2004) cannot be used for transmission without “just compensation”

• IUB retroactive application of §306.46 is unlawful• Ames must petition IUB for proper eminent domain

authority or go to County Compensation Commission


❸ Federal UpdateThanks to APPA Review

1. Election results/impacts2. Tax reform poses threat to tax-exempt

financing3. Regulatory Agencies

– Overview– NESHAP RICE Rule in context of MISO market


Status Quo Election

• Though Democrats held the Whitehouse and made gains in House and Senate, balance of power is mostly unchanged

• Conflicting interpretations of election results, especially over tax and spending policies and what to do about “fiscal cliff?”


U.S. Senate Overview

• Senate 55 Democrats – 45 Republicans– Ds defended twice as many seats as Rs, but

picked up two seats - still 5 votes shy of filibuster-proof majority

– Leadership mostly unchanged, including Reid (D-NV) and McConnell (R-KY)

– 12 newly elected senators and 41 currently serving first term

– Women comprise 20% of Senate


Key Committees & Issues

• Senate Energy & Natural Resources– Wyden (D-OR) is new chair – Bingaman retiring

• Wants more support for “underserved” renewables, e.g., geothermal, hydro, and biomass

• Favors clean energy standard with bigger state role

– Murkowski (R-AK) is ranking member• Favors policy geared toward more oil & gas

development, hydro, nuclear, and electric reliability



• Senate Finance– Baucus (D-MT) Chair and Hatch (R-UT) Ranking

Member– Legislation to overhaul tax code will go through

this committee– Comprehensive reform measures likely to limit

deductions and could put tax-exempt financing on top of list for elimination or modification



• Senate Agriculture– Stabenow (D-MI) Chair and Roberts (R-KS)

Ranking Member– APPA watching farm bill to stop language

expanding REC service territory protection– Committee has authority over CFTC, which

regulates swaps and derivatives used to hedge power & gas market risks

– APPA working on exemption to some of the Dodd-Frank implementation rules



• Environment & Public Works– Boxer (D-CA) Chair and Vitter (R-LA) Ranking

Member, replacing Inhofe (OK)– Committee oversees EPA and remains highly

polarized– Exception to ideological stalemate is

reauthorization of Water Resources & Development Act and reform of Army Cors of Engineers


House of Representatives Overview

• 233 Republicans – 201 Democrats– Despite Dem’s net pickup of 8 seats, Rs retain

significant majority– Party leadership remains the same: Boehner (R-

OH) and, unofficially, Pelosi (D-CA)– Moderates on both sides have been decimated;

outlook for bipartisanship is dim– Most members have served two terms or fewer– White males are minority in D caucus for first

time



• House Energy & Commerce– Upton (R-MI) Chair and Waxman (D-CA) ranking

member• Committee will continue to vote out bills to loosen

healthcare, environment and energy regulations, which will die in Senate

• House Financial Services– Jeb Hensarling (R-TX) replaces Bachus as Chair &

Waters (D-CA) replaces Frank as Ranking Mbr.• Hensarling said to be skeptical of big banks and

government role in mortgage finance



• House Natural Resources– Hastings (R-WA) Chair & Markey (D-MA) Ranking

member• Exercises oversight of WAPA

• House Homeland Security– McCaul (R-TX) replaces King (R-NY) as Chair and

Thompson (D-MS) Ranking member• McCaul’s top priority is preventing cyber attacks



• House Agriculture– Lucas(R-OK) Chair & Peterson (D-MN) Ranking

member• Oversight of CFTC and Dodd-Frank implementation• Lucas sympathetic to our problem with CFTC rules• Peterson helpful on muni access to rural utility funds

• Looking ahead– Rs have work cut out - held majority thanks to

statehouse control over redistricting (Ds won 500,000 more votes for house members)


Policies in 2nd Obama Term

• Wind PTC – Pres. Supports, but renewal uncertain in tax overhaul

• EPA – expected to continue regulations on greenhouse gases, hazardous pollutants, effluent guidelines and cooling water guidelines for power plants

• Carbon reduction/renewables – Obama supports; conservative think tank rethinking carbon tax, which pres. is willing to consider

• PMAs – Chu’s memo uncertain under new secretary


Agency Leadership Changes

• EPA - Jackson not expected to stay, but change in leadership not likely to result in big policy change; most EPA regulations are required under existing statutes or court settlements

• Energy – Chu likely to exit; PMA policies in “Chu Memo” have uncertain future

• Interior – Salazar out• Treasury – Geithner out after “cliff”

negotiations complete


❻ Management Policies for Consideration by IAMU Members

• A report by the State Auditor in reference to control procedures at the New Hampton Municipal Light Plant included five recommendations that may be of interest to other utilities.


Five control procedures recommended by State Auditor

1. Scrap metal – Implement policies and procedures to ensure the inventory and sale of scrap metal is properly tracked, such as maintaining a log of the weight and value of scrap metal held and sold. The recommendation also noted that payment from vendors be made by check payable to the utility and that receipts should be matched to deposits by someone not directly involved in the sale.

2. Collections – Implement policies and procedures to ensure all collections are properly deposited in a timely manner. Collections and deposits should be periodically compared by someone independent of the collection process.


Auditor recommended five control procedures:

3. Public purpose – Implement policies & procedures for expenditures that may not have clear public purpose, such as employee recognition events, holiday parties, or the purchase of flower arrangements for funerals and document the governing body’s public interest finding. The policy should specify a maximum amount allowable and documentation for all expenditures of this nature should be maintained.

4. Travel expense – Implement policies & procedures for review of travel expenses to ensure all expenses are reasonable and appropriate. Ensure all reimbursements from outside organizations are properly remitted to the utility, that travel is properly approved, and that expenses are supported with original itemized receipts, rather than credit card charge slips.


Auditor recommended five control procedures:

5. Notification – Implement procedures to ensure compliance with section 11.6(7) of the Iowa Code, which requires governmental subdivisions to notify the Auditor of State regarding suspected embezzlement, theft or other significant financial irregularities.

• IAMU has sample policies addressing all five Auditor recommendations, plus policies on gifts, use of employer property, distracted driving, and use of computers, internet, social media, and e-mail. Also available is a letter from IAMU to new board members outlining fiduciary and other responsibilities.


Iowa Municipal Utilities SupportLong Island Power Authority (LIPA)

• Muscatine: Neil Gaunt, Brandon Harris, & Travis Stuckel

• Cedar Falls: Craig Schwickerath, Adam Oltmann, Mike Wildeboer, & Jamie Meier

• Waverly: Levi Gulick & Mark Jaquith

• Aurelia: Mitch Langschwager

• Lake Park: Lane Sether

❼ Mutual Aid Update


Waverly’s Levi Gulick works among downed trees


Adam Oltman – Cedar Falls Utilities


SNOWSTORM

FOLLOWSHURRICANE


Muscatine Power & Water Linemen Neil Gaunt, Travis Stuckel and Brandon Harris


New tools for Mutual Aid

• On-line updating of personnel, equipment, and materials

• On-line access to mutual aid program information and data

• Future response to include manager or supervisor to assist with mutual coordination on site, when requested


Accident Type Total Incurred # Claims Avg $/ClaimsOverexertion $10,491,574 1031 $10,176Fall-Slips $7,219,529 686 $10,524Struck By $4,111,109 895 $4,593Fall-Elevated $3,764,374 394 $9,554


Safety/Loss Update

• Workers’ comp. claims account for 45% of total incurred costs over the past 10 years

• 491 claims = $3,611,436 (yr. ending 3-31-12)

• Leading cause of claims: Accident Type Total Incurred # Claims Avg $/ClaimsOverexertion $10,491,574 1031 $10,176Fall-Slips $7,219,529 686 $10,524Struck By $4,111,109 895 $4,593Fall-Elevated $3,764,374 394 $9,554


Occupation Total Incurred # ClaimsFirefighters $9,373,315 929Police Officers $7,647,896 778Street Road Constr $4,255,239 629Electric Light/Power $3,827,488 490Waterworks $3,005,576 577Municipal Empl $1,946,813 222Park NOC $1,742,208 445Sewage Disposal $1,226,717 143Clerical Office Empl $821,966 264Dredging / All Type $736,873 11Garbage Collection $540,801 143Vol Ambulance $527,460 92Gas Company $494,256 90Street Cleaning $493,699 163Cemetery Operations $430,499 38

Workers’ Compensation Claims by Occupation:

Utilities Iowa Association of Municipal Utilities December 4 – Cedar Falls December 5 –...

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