Presentation is loading. Please wait.

Presentation is loading. Please wait.

Utilities Iowa Association of Municipal Utilities December 4 – Cedar Falls December 5 – Muscatine December 6 – Ankeny December 7 – Atlantic December 10.

Similar presentations


Presentation on theme: "Utilities Iowa Association of Municipal Utilities December 4 – Cedar Falls December 5 – Muscatine December 6 – Ankeny December 7 – Atlantic December 10."— Presentation transcript:

1 Utilities 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

2 Utilities Iowa Association of Municipal Utilities Agenda State legislative report a.Election results and implications b.Educating new legislators (thumb drive tour) c.IAMU legislative priorities d.Other legislation to watch State regulatory report Federal update NESHAP RICE in context of MISO market Energy Services Report Management policies Mutual aid and safety/loss update

3 Utilities Iowa Association of Municipal Utilities Agenda- Today CFU (c) Legislative Priority – Transmission Investments Energy Services Report (except DR/Breda study) NESHAP RICE in context of MISO market Energy Services – DR/Breda study State legislative report a.Election results and implications b.Educating new legislators (thumb drive tour) c.IAMU legislative priorities d.Other legislation to watch State regulatory report Federal update Management policies Mutual aid and safety/loss update

4 Utilities Iowa Association of Municipal Utilities IAMU Priority 1. 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

5 Utilities Iowa Association of Municipal Utilities 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 ( ) – background slides presented by Anne Kimber follow…

6 Utilities Iowa Association of Municipal Utilities 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)

7 Utilities Iowa Association of Municipal Utilities 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 – Quad Cities West project – Grimes Granger line Iowa municipal investments via Iowa Public Power Agency Transmission Investment History

8 Utilities Iowa Association of Municipal Utilities 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.

9 Utilities Iowa Association of Municipal Utilities 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

10 Utilities Iowa Association of Municipal Utilities 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

11 Utilities Iowa Association of Municipal Utilities 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

12 Utilities Iowa Association of Municipal Utilities 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

13 Utilities Iowa Association of Municipal Utilities UtilityNet 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

14 Utilities Iowa Association of Municipal Utilities 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

15 Utilities Iowa Association of Municipal Utilities 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…

16 Utilities Iowa Association of Municipal Utilities FERC Order 1000 in Iowa…. Some ideas: – Robust stakeholder process to ensure that transmission constructed in Iowa meets Iowas 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….

17 Utilities Iowa Association of Municipal Utilities Energy Services E-PAYS® Other Energy Services Programs Demand Reduction Strategies - Breda Study

18 Utilities Iowa Association of Municipal Utilities Energy Services The Iowa Energy Bank provides loans for energy efficiency or renewable projects >$100,000 to local governments and non- profits IAMUs E-PAYS® program extends program to smaller projects E-PAYS = Efficiency – Pay As You Save

19 Utilities Iowa Association of Municipal Utilities Dept. of Admin. Services Energy Bank Loan Terms & Process PLAN REVIEW APPROVE FINALIZE LOAN As low as 1% APR Closing costs 2% Loan servicing 0.25% annually for effective APR of 1.67% $100,000 minimum

20 Utilities Iowa Association of Municipal Utilities Sub-loan program Expands energy efficiency projects Available to IAMU members $1.2 million fund

21 Utilities Iowa Association of Municipal Utilities Five program areas 1.Distribution system loss reduction and smart grid applications 2.LED Streetlight purchase 3.Community Solar Photovoltaic systems 4.Community Energy Efficiency loan pilot project 5.Energy Efficiency in water and wastewater treatment

22 Utilities Iowa Association of Municipal Utilities Distribution System Loss Reduction and Smart Grid Applications – Reducing system energy losses – Implementing measures that reduce demand Target: $400,000

23 Utilities Iowa Association of Municipal Utilities Possible Distribution System Measures – Eliminating unmetered electric usage – Implementing a meter testing program – Measures that improve power factor – Conservation voltage reduction

24 Utilities Iowa Association of Municipal Utilities 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

25 Utilities Iowa Association of Municipal Utilities LED Street Light Financing Continuance of joint purchase agreement (IAMUs 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

26 Utilities Iowa Association of Municipal Utilities Solar: Two concepts – Community solar photovoltaic projects – Loans to residential and/or commercial customers Target: $200,000

27 Utilities Iowa Association of Municipal Utilities 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

28 Utilities Iowa Association of Municipal Utilities

29

30 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

31 Utilities Iowa Association of Municipal Utilities 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

32 Utilities Iowa Association of Municipal Utilities 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

33 Utilities Iowa Association of Municipal Utilities Solar Links – Federal tax credits: cfm?c=tax_credits.tx_index cfm?c=tax_credits.tx_index – State tax credits: s/solarcredits.html s/solarcredits.html – Open PV website:

34 Utilities Iowa Association of Municipal Utilities 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

35 Utilities Iowa Association of Municipal Utilities Residential Loan Pilot Project- Workflow 1.Energy audit is performed on customers home – Qualified utility employee OR – Qualified third-party auditor 2.Energy audit recommends cost-effective measures that could be financed

36 Utilities Iowa Association of Municipal Utilities 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

37 Utilities Iowa Association of Municipal Utilities 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)

38 Utilities Iowa Association of Municipal Utilities 0% Loans to the Customer-On Bill Payments Loan AmountTerm (months) $1,000 or less12 months $1,001-$2,00024 months $2,001-$3,00036 months $3,001-$4,00048 months $4,001-$5,00060 months

39 Utilities Iowa Association of Municipal Utilities 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

40 Utilities Iowa Association of Municipal Utilities Possible Water/Wastewater Measures – Comprehensive system audit – Variable frequency drives (VFDs) for electric motors (workshop on well attended!) – Building envelope and lighting – Leak detection – Customer-side water conservation measures – Improved metering – Alternative treatment technologies

41 Utilities Iowa Association of Municipal Utilities 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

42 Utilities Iowa Association of Municipal Utilities Loan Agreement Process Pre-Application Review by IAMU and approval Develop loan agreementloan agreement Signature by utility and IAMU

43 Utilities Iowa Association of Municipal Utilities 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

44 Utilities Iowa Association of Municipal Utilities NESHAP RICE In 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

45 Utilities Iowa Association of Municipal Utilities 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

46 Utilities Iowa Association of Municipal Utilities Resource Planning Today 1. Utility forecasts required capacity plus reserves 2. Builds needed resources 3. Voluntary Monthly Auction Available

47 Utilities Iowa Association of Municipal Utilities Resource Planning 6/1/13 1.Utilities send MISO their forecast peak demand & coincident MISO peak (by ) 2.MISO calculates unforced capacity (UCAP) value for each resource 3.Market participants ensure they have sufficient UCAP to meet coincident peak demand 4.MISO opens auction & receives offers for generation, DR, and behind-the-meter generation (in $/MW) 5.All offers needed to meet demand + reserve clear auction and receive same clearing price 6.Utilities purchase capacity at auction clearing price ($/last MW in)

48 Utilities Iowa Association of Municipal Utilities 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 times the MISO established Cost Of New Entry (CONE) or 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 suppliers) resources (by )

49 Utilities Iowa Association of Municipal Utilities Forecasts based on econometric methods 1. Peak Demand Forecast & Required Capacity Send to MISO

50 Utilities Iowa Association of Municipal Utilities 2. MISO Calculates Needed Capacity and Reserves for Each Zone

51 Utilities Iowa Association of Municipal Utilities 3. Resources Offered in Auction (March 27-29, 2013) $0/MW-Yr.$ $30,000/MW-Yr.$ $65,000/MW-Yr.$ $35,000/MW-Yr.$ $34,000/MW-Yr.$ $10,000/MW-Yr.$ $95,000/MW-Yr.$

52 Utilities Iowa Association of Municipal Utilities 3. Auction Clearing Price (results ) $0/MW-Yr.$ $30,000/MW-Yr.$ $35,000/MW-Yr.$ $34,000/MW-Yr.$ $10,000/MW-Yr.$ $95,000/MW-Yr.$ $65,000/MW $0 $65,000/MW-Yr.$ $65,000/MW-Yr. Clearing Price

53 Utilities Iowa Association of Municipal Utilities Utility can opt out of auction by submitting Fixed Resource Adequacy Plan to meet requirements from its own (or suppliers) resources FRAP or Auction? Opinions vary regarding the value of FRAP

54 Utilities Iowa Association of Municipal Utilities 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

55 Utilities Iowa Association of Municipal Utilities 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

56 Utilities Iowa Association of Municipal Utilities 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

57 Utilities Iowa Association of Municipal Utilities 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 ( ) 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

58 Utilities Iowa Association of Municipal Utilities 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

59 Utilities Iowa Association of Municipal Utilities Market Risk Mitigation Strategies Its 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. – utilitys or customers Dynamic voltage reduction Thermal & battery storage

60 Utilities Iowa Association of Municipal Utilities Evaluate Strategies to Lower Peaks Peak demand drives capacity, transmission, and rents. Example: – $60/kW-year – $28/kW-year – Directly Assigned $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)

61 Utilities Iowa Association of Municipal Utilities 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

62 Utilities Iowa Association of Municipal Utilities EPAs NESHAP RICE Rule Diesel electric generators must be compliant with EPAs 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 (1 st 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

63 Utilities Iowa Association of Municipal Utilities 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 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

64 Utilities Iowa Association of Municipal Utilities 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

65 Utilities Iowa Association of Municipal Utilities Why manage peak demand? Risk managementsomething 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

66 Utilities Iowa Association of Municipal Utilities 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

67 Utilities Iowa Association of Municipal Utilities A Brief Review Direct Load Control Distributed generationmainly 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

68 Utilities Iowa Association of Municipal Utilities 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?

69 Utilities Iowa Association of Municipal Utilities Why are we doing this? Chance favors the prepared mind. Louis Pasteur We havent got the money, so weve got to think! Ernest Rutherford (British physicist, Noble prize, 1908)

70 Utilities Iowa Association of Municipal Utilities 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

71 Utilities Iowa Association of Municipal Utilities 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

72 Utilities Iowa Association of Municipal Utilities Breda Example Strategies examined: 1.Improvements of existing load control system 2.Shifting municipal loads 3.Rebates for air source and geothermal heat pumps 4.Community solar project 5.Alternative rate structures: e.g., interruptible or time of use

73 Utilities Iowa Association of Municipal Utilities 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

74 Utilities Iowa Association of Municipal Utilities 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

75 Utilities Iowa Association of Municipal Utilities 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

76 Utilities Iowa Association of Municipal Utilities Energy Efficiency Use energy efficiency to reduce peak demand – Heating/cooling or equipment that runs continuously best options Heating & Coolinginstall high efficiency equipment – Air conditioners – Heat pumps Other: Commercial lighting, IT Servers, Industrial loads

77 Utilities Iowa Association of Municipal Utilities Energy Efficiency Example Breda – Air conditioning summer peak, heating winter peak – No natural gaspropane and electricity heating sources Incentives for air-source & geothermal heat pumps – Reduce peaks – Increase electricity sales – Customers save money

78 Utilities Iowa Association of Municipal Utilities 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

79 Utilities Iowa Association of Municipal Utilities Solar Availability Due south (180 o ) WSW (240 o )

80 Utilities Iowa Association of Municipal Utilities Solar Availability Scattered Clouds Clear Sky

81 Utilities Iowa Association of Municipal Utilities 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

82 Utilities Iowa Association of Municipal Utilities 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

83 Utilities Iowa Association of Municipal Utilities 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

84 Utilities Iowa Association of Municipal Utilities State Legislative Report 1.Election Report and Thumb Drive Tour 2.IAMUs legislative priorities a.Transmission investments - right of first refusal b.Water service within two miles of a city c.Tax credits for community renewables 3.Other legislation Julie Smith Legislative and Regulatory Counsel

85 Utilities Iowa Association of Municipal Utilities Election Report Senate – 26 D -23 R – Late Senator Pat Wards 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

86 Utilities Iowa Association of Municipal Utilities 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)

87 Utilities Iowa Association of Municipal Utilities 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)

88 Utilities Iowa Association of Municipal Utilities Election Report – IA House House of Representatives 53 R – 47 D Ds 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

89 Utilities Iowa Association of Municipal Utilities 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)

90 Utilities Iowa Association of Municipal Utilities 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)

91 Utilities Iowa Association of Municipal Utilities 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)

92 Utilities Iowa Association of Municipal Utilities Other Committees Local Government Committee – House – Jason Schultz, new Chair – New Rep. Art Staed, Ranking Member House Rs have appointed Chairs House Ds have appointed ranking members and Committee members

93 Utilities Iowa Association of Municipal Utilities 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 wont 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)

94 Utilities Iowa Association of Municipal Utilities Districts

95 Utilities Iowa Association of Municipal Utilities 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/Redis t/2011/ /HouseStatewide8x11.pdf https://www.legis.iowa.gov/DOCS/Resources/Redis t/2011/ /HouseStatewide8x11.pdf

96 Utilities Iowa Association of Municipal Utilities 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)

97 Utilities Iowa Association of Municipal Utilities 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)

98 Utilities Iowa Association of Municipal Utilities 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)

99 Utilities Iowa Association of Municipal Utilities 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

100 Utilities Iowa Association of Municipal Utilities Regional Meeting #2 Mount Pleasant – New Senator Rich Taylor (D)– former prison guard/AFSCME – Rep. Dave Heaton (R)– former teacher/restaurant owner

101 Utilities Iowa Association of Municipal Utilities 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)

102 Utilities Iowa Association of Municipal Utilities 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)

103 Utilities Iowa Association of Municipal Utilities 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)

104 Utilities Iowa Association of Municipal Utilities Regional Meeting #4 Harlan – Senator Nancy Boettger (R) – Rep. Jason Schultz (R) Wall Lake – New Senator Mark Segabart (R) – Rep. Gary Worthan (R)

105 Utilities Iowa Association of Municipal Utilities Legislators Regional Meeting #5 – Orange City Hawarden, Sioux Center, Alton and Orange City – Senator Randy Feenstra (R), Asst. Minority Leader – Rep. Dwayne Alons (R)

106 Utilities Iowa Association of Municipal Utilities 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)

107 Utilities Iowa Association of Municipal Utilities 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)

108 Utilities Iowa Association of Municipal Utilities 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

109 Utilities Iowa Association of Municipal Utilities Educating New Legislators Every 10 years – huge turnover w/ many new members – both houses/both parties – 12 New Senators – 24% – 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 Iowas Municipal Utilities

110 Utilities Iowa Association of 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.)

111 Utilities Iowa Association of Municipal Utilities 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

112 Utilities Iowa Association of Municipal Utilities IAMUs 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

113 Utilities Iowa Association of Municipal Utilities IAMU Priority 2. 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)

114 Utilities Iowa Association of Municipal Utilities Water Service Areas Recent 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.

115 Utilities Iowa Association of Municipal Utilities Water Service Areas Recent Examples of Problems Marshalltown, Iowa – Liberty Baptist Church constructs youth facility in city, which planned to provide water service and fire protection – July 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

116 Utilities Iowa Association of Municipal Utilities Marshalltown Church between Rock & a Hard Place – Times Republican

117 Utilities Iowa Association of Municipal Utilities 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

118 Utilities Iowa Association of Municipal Utilities IAMU Priority 3. 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 residents investment in a community wind or solar project

119 Utilities Iowa Association of Municipal Utilities Other Legislative Issues Natural Gas Enforcement - IUB Civil Penalties Increase Stray Voltage –standards Nuclear Energy Efficiency Reporting Changes Commercial Property Tax Reform Telecom Tax

120 Utilities Iowa Association of Municipal Utilities 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.

121 Utilities Iowa Association of Municipal Utilities Existing IUB Civil Penalties - Gas Iowa Code Section 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

122 Utilities Iowa Association of Municipal Utilities 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 didnt cause specific harm, and fact that now completed DIMP – IUB said fact that Bedford didnt want to expend resources to timely comply led to penalty Brooklyn Municipal Gas Utility – PSA – Ivan Webber made argument for leniency due to nonprofit nature of utilities, size, and fact that citizens will pay fine

123 Utilities Iowa Association of Municipal Utilities Stray Voltage RECs to push this issue again next session. Fight between Farm Bureau and Trial Lawyers

124 Utilities Iowa Association of Municipal Utilities Nuclear Energy Unsure whether this issue will emerge again MEC not saying they want it

125 Utilities Iowa Association of Municipal Utilities 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

126 Utilities Iowa Association of Municipal Utilities 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

127 Utilities Iowa Association of Municipal Utilities State Regulatory Activity and 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

128 Utilities Iowa Association of Municipal Utilities 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

129 Utilities Iowa Association of Municipal Utilities 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

130 Utilities Iowa Association of Municipal Utilities MidAmerican Energy RPU 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 UNLESS return on equity falls below 10% –8.94%

131 Utilities Iowa Association of Municipal Utilities MEC Rate Case cont. On October 8, 2012, IUB approved settlement agreement establishing additional charges for calendar years 2012 and – 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

132 Utilities Iowa Association of Municipal Utilities Alliant/IPL natural gas rates RPU May 25, Alliant/IPL sought natural gas rate increase (5.6%) November 26, 2012, IUB approved settlement w/OCA and Iowa Consumers Coalition – IPLs 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

133 Utilities Iowa Association of Municipal Utilities Alliant/IPL Natural Gas Generation – RPU 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 $

134 Utilities Iowa Association of Municipal Utilities Electric Service Territory Maps Updates as of Nov 1, 2011 Listing of IUB modification proceedings – see example – Buchanan County – listing of boundary changes since al/Buchanan_10.pdf al/Buchanan_10.pdf

135 Utilities Iowa Association of Municipal Utilities 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 – theyre not a gotcha agency. Agency has broad authority:

136 Utilities Iowa Association of Municipal Utilities Benefits to Local Government Will work with the AG and Ombudsmans Office – one stop shop – all questions will be funneled through IPIB ON an informal basis # 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 Generals opinion or the opinion of Legal Counsel.

137 Utilities Iowa Association of Municipal Utilities 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

138 Utilities Iowa Association of Municipal Utilities 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

139 Utilities Iowa Association of Municipal Utilities 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

140 Utilities Iowa Association of Municipal Utilities 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.

141 Utilities Iowa Association of Municipal Utilities Car Wash Tax Credit If utility cant adjust billing in time – utility must provide a credit for tax that should have been exempt

142 Utilities Iowa Association of Municipal Utilities Legal Proceedings Railroad Right of Way Crossings – Hawkeye Land v. IUB – Hawkeye Land v. Franklin County Wind Replacement Tax Ames Transmission

143 Utilities Iowa Association of Municipal Utilities 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 ITCs payment of $750 for three crossings, which HL valued at $30,000 each HL alleged – § is unconstitutional because it allows a utility to cross the ROW for a $750 payment rather than a determination of just compensation – § doesnt apply because HL isnt a railroad and ITC isnt a public utility

144 Utilities Iowa Association of Municipal Utilities 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

145 Utilities Iowa Association of Municipal Utilities 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, Court vacated the temporary injunction – HL hasnt shown irreparable damage if crossings go through June 6, 2012 – FCW filed motion to dismiss hearing – based on HLs failure to pursue administrative (IUB)

146 Utilities Iowa Association of Municipal Utilities RR ROW – Franklin Co. Wind July 25, Court dismissed case due to failure to exhaust administrative remedies August 24, 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.

147 Utilities Iowa Association of Municipal Utilities 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)

148 Utilities Iowa Association of Municipal Utilities 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: or

149 Utilities Iowa Association of Municipal Utilities Replacement Tax Little Sioux Corn Processors – claims tax is Unconstitutional – violates equal protection clause – LSCP pays tax that other similarly situated consumer dont – bypass customers pay the tax/customers of local distribution companies dont – 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

150 Utilities Iowa Association of Municipal Utilities 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 Generals 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

151 Utilities Iowa Association of Municipal Utilities 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

152 Utilities Iowa Association of Municipal Utilities 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 5 th 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 § is unlawful Ames must petition IUB for proper eminent domain authority or go to County Compensation Commission

153 Utilities Iowa Association of Municipal Utilities Federal Update Thanks to APPA Review 1.Election results/impacts 2.Tax reform poses threat to tax-exempt financing 3.Regulatory Agencies – Overview – NESHAP RICE Rule in context of MISO market

154 Utilities Iowa Association of Municipal Utilities 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?

155 Utilities Iowa Association of Municipal Utilities 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

156 Utilities Iowa Association of Municipal Utilities 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

157 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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

158 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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

159 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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

160 Utilities Iowa Association of Municipal Utilities House of Representatives Overview 233 Republicans – 201 Democrats – Despite Dems 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

161 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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

162 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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 McCauls top priority is preventing cyber attacks

163 Utilities Iowa Association of Municipal Utilities Key Committees & Issues 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)

164 Utilities Iowa Association of Municipal Utilities Policies in 2 nd 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 – Chus memo uncertain under new secretary

165 Utilities Iowa Association of Municipal Utilities 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

166 Utilities Iowa Association of Municipal Utilities 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.

167 Utilities Iowa Association of Municipal 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.

168 Utilities Iowa Association of Municipal Utilities 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 bodys 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.

169 Utilities Iowa Association of Municipal Utilities 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.

170 Utilities Iowa Association of Municipal Utilities Iowa Municipal Utilities Support Long 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 Mutual Aid Update

171 Utilities Iowa Association of Municipal Utilities

172

173 Waverlys Levi Gulick works among downed trees

174 Utilities Iowa Association of Municipal Utilities Adam Oltman – Cedar Falls Utilities

175 Utilities Iowa Association of Municipal Utilities

176 SNOW STORM FOLLOWS HURRICANE

177 Utilities Iowa Association of Municipal Utilities

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

179 Utilities Iowa Association of Municipal Utilities 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

180 Utilities Iowa Association of Municipal Utilities Accident Type Total Incurred # ClaimsAvg $/Claims Overexertion $10,491, $10,176 Fall-Slips $7,219, $10,524 Struck By $4,111, $4,593 Fall-Elevated $3,764, $9,554

181 Utilities Iowa Association of Municipal Utilities 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 ) Leading cause of claims: Accident Type Total Incurred # ClaimsAvg $/Claims Overexertion $10,491, $10,176 Fall-Slips $7,219, $10,524 Struck By $4,111, $4,593 Fall-Elevated $3,764, $9,554

182 Utilities Iowa Association of Municipal Utilities OccupationTotal Incurred# Claims Firefighters$9,373, Police Officers$7,647, Street Road Constr$4,255, Electric Light/Power$3,827, Waterworks$3,005, Municipal Empl$1,946, Park NOC$1,742, Sewage Disposal$1,226, Clerical Office Empl$821, Dredging / All Type$736,87311 Garbage Collection$540, Vol Ambulance$527,46092 Gas Company$494,25690 Street Cleaning$493, Cemetery Operations$430,49938 Workers Compensation Claims by Occupation:


Download ppt "Utilities Iowa Association of Municipal Utilities December 4 – Cedar Falls December 5 – Muscatine December 6 – Ankeny December 7 – Atlantic December 10."

Similar presentations


Ads by Google