Stay Tuned Until Next Year?
Federal Climate Change Legislative & Regulatory Update

In an attempt to keep up with the U.S. House of Representatives which passed a comprehensive climate change and energy bill in June 2009 on a slim vote, the U.S. Senate continues to discuss potential climate change and energy legislation, with various options being considered.

However, with the August Congressional recess and November elections looming, the chances of a Senate bill passing and being married with provisions in the House bill appear dimmer with each passing day. Senator John Kerry (D-MA), a leading Senate negotiator on proposed legislation, conceded as much in mid-July – “the schedule is not our friend” he told reporters.

One option being considered by the Senate would apply pollution caps only to the utility industry instead of economy wide. The American Public Power Association has consistently supported an economy wide solution. Many other national organizations such as the National Rural Electric Cooperative Association, the American Chemistry Council and the American Iron and Steel Institute have weighed in against a utility-only option, arguing that it’s an “energy tax”. Senator Lindsey Graham (R-SC) scoffed that “this is a pretty tough environment to get people to take difficult votes because no matter what you do on the climate side, it’s going to be called cap and tax”. A less controversial potential option floated would focus solely on offshore drilling reforms and renewable energy incentives.

Meanwhile, the U.S. Environmental Protection Agency continues to proceed to reign in greenhouse gas emissions on a number of regulatory fronts including a CAIR (Clean Air Interstate Rule) replacement rule, proposed coal ash regulations, diesel generator/reciprocating internal combustion engine regulations, and various other proposed regulatory changes.

All of this might be simply setting the stage for resolution of these complex issues in the 112th Session of Congress which will convene in January 2011. Stay tuned!

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APPA Washington Report
A Long and Winding Road
by Robert Varela, Editor, APPA’s Public Power Weekly

School civics lessons on how laws are made describe a rather orderly, deliberative process.

A member of Congress gets an idea and introduces a bill by putting it in the hopper. The bill is assigned to a committee and in turn to a subcommittee, where it is studied, hearings are held, and amendments are considered. The committee either tables or reports the bill to the floor. On the floor, bills are taken up in order of committee passage (though that can be changed). Passage is by a simple majority (unless it’s by unanimous consent or under a suspension of the rules).

The process that’s been used for climate change legislation bears scant resemblance to the civics lesson descriptions. In fact, it’s been more a combination of Let’s Make A Deal, Monopoly (with liberal use of Chance, Community Chest and Get Out of Jail Free cards) and Texas Hold ‘Em.

In the House, a good deal of wheeling and dealing produced a 1,427-page cap-and-trade bill, the American Clean Energy and Security Act of 2009. The bill started out as a 648-page draft released March 31, 2009, then ballooned to 932 pages when it was introduced on May 15. The full House passed the bill on June 26, after a week of dealmaking that saw the measure grow from 946 pages (as passed by the Energy and Commerce Committee) to more than 1,200 pages—and that was before a final, 309-page “manager’s amendment.”

However, the House in some key areas fell short of the criteria established by APPA for its support of climate change legislation. Among the most significant shortcomings of the House bill are the lack of a hard price collar on carbon emission allowances; emission reduction targets and timelines that do not provide an appropriate transition period for implementation of the cap-and-trade program and the commercial availability of alternative technologies, such as carbon capture and sequestration; and the absence of “bright line” pre-emption of regulation of greenhouse gases under the Clean Air Act.

The Senate’s initial stab at passing a climate change bill drew the equivalent of a “Chance” card sending you back to square one. Environment and Public Works Committee Chair Barbara Boxer, D-Calif., drafted a bill based on the House-passed measure, but it stalled in her committee. Sen. John Kerry, D-Mass., then took charge, joined by Sens. Joseph Lieberman, I-Conn., and Lindsey Graham, R-S.C.—until Graham pulled back. Kerry and Lieberman went ahead and unveiled a nearly 1,000-page draft, with the understanding that it was open to change. Majority Leader Harry Reid, D-Nev., said he would bring it up for a vote if they could round up the 60 votes needed to overcome a filibuster.

Meanwhile, the Environmental Protection Agency has shown that it isn’t bluffing about regulating carbon dioxide and other greenhouse gases under the Clean Air Act. The agency laid out a schedule for phasing in regulation of stationary sources and issued a final tailoring rule. The one card that EPA has not played is a definition of what will constitute “best available control technology.” That is expected in August.

Not exactly the orderly, deliberative process described in the textbooks. As former German Chancellor Otto von Bismarck said, “Laws are like sausages, it is better not to see them being made.”

Despite the process, the Kerry-Lieberman draft takes some steps (but not enough) in the right direction. "This proposal is well intended and is an improvement over previous climate change bills," said APPA President and CEO Mark Crisson. "But in our view it still does not go far enough to protect consumers, particularly in future years if compliance options remain limited."

The wheeling and dealing, the sudden stops, starts and reversals, the complexity and sheer length of the bills—all this has kept APPA government relations staff extremely busy. Given the dim prospects for Senate passage of a climate change bill this year, they’re likely to stay that way for some time to come.

Bismarck also said, “Politics is the art of the next best.” For APPA, the key will be to work to make sure the climate change bill isn’t the third, fourth or fifth best.

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Estimated Completion in Late 2011
Black River Falls’ $10.6 Million Dam Project Underway

Four years in the making, Black River Falls Municipal Utilities has started a $10.6 million rebuild of its nearly 100 year old hydro electric dam. When completed, the dam will consist of three hydro electric generation units with a combined capacity of 1.3 MW.

The dam’s history dates back to 1908 when a sawmill was built at the site of the current dam as logs were routed down the Black River. The dam was subsequently built in 1912, flood control being a primary objective, with two generating units rated at 600 kW and 320 kW for a combined installed capacity of 920 kW. The dam is the second of two hydro electric dams on the Black River, the second one being the Hatfield hydro electric dam approximately 13 miles upstream. According to Jerry Ewert, Gen. Mgr., Black River Falls Municipal Utilities, the dam currently provides 8 percent of the City’s electric needs.

Lunda Construction, the general contractor selected for the project, will coordinate the installation of an additional 410 kW generation unit, construction of a new intake and power house at the east abutement of the dam, reconstruction of the gated spillway with six 27-foot-wide bays to replace the existing eight 20-foot-wide bays, reconstruction of the retaining wall of the powerhouse tailrace, and various other concrete repairs to the structure.

To finance the project, Black River Falls applied for and was awarded a USDA Rural Utilities Services (RUS) loan for approximately half of the cost of the project, issuing conventional municipal utility revenue bonds for the remainder.

In terms of a project timeline, the entire project is scheduled to take 500 days to complete. Dam demolition should be completed by mid-August, the new powerhouse is scheduled to be completed by Fall 2010, the new dam gates will be installed in November 2010 and February 2011, and start up of the rebuilt dam is anticipated in late 2011. When the project is completed and the dam operational, Ewert says that it will provide 12 percent of the City’s electric needs.

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Located at Wastewater Treatment Plant
Evansville Installs 100 kW Wind Turbine

The City of Evansville, just south of Madison, has installed a 100 kW wind turbine at its Wastewater Treatment Plant and the unit became operational last month.

According to Evansville Mayor Sandy Decker, the City “has a history of promoting alternative energy. Baker Manufacturing Company, our oldest manufacturer, produced windmills from 1874 until about 1950. Our community celebrates windmills. As our country and state focus on clean energy, it is natural for Evansville to include wind power in our community’s energy independence plan.”

After a competitive bid process, the City selected a “Northwind 100” turbine, produced by Northern Power Systems (http://www.northernpower.com/) and hired H&H Solar Energy Services (http://www.hhgroupholdings.com/) in Madison to install the unit. This is the same unit that is installed at Wausau East High School in central Wisconsin and at Blackhawk Technical College in Fort Atkinson in southeast Wisconsin.

The total project cost was $594,000. The City worked with its power supplier, WPPI Energy, to secure a $257,400 power supply payment based on thirteen-years of predicted output from the system as well as a $25,000 WPPI Energy renewable energy grant. Focus on Energy provided an incentive of $150,000 through an implementation grant, based on the size, energy production and cost of the turbine, and the City paid for the remaining $161,600.

In terms of the turbine’s specifications, the tower sits on a 15 foot deep rebar reinforced concrete foundation. The tower is composed of three tubular segments weighing a total of 30,000 pounds and stands 120 feet above the ground. The three blades each measure 37 feet for a total swept area of 217 square feet. The nacelle and rotor weigh in at 16,100 pounds. Evansville selected the Northwind 100 based in part on the low cut-in speed (7.8 mph) and the high cut-out speed (56 mph), which will help optimize the unit’s production of electricity, and the design life which is 20 years. The turbine is expected to produce as much as 125,000 kilowatt hours annually, enough for the equivalent usage of 12 to 15 average homes.

“Energy policy is currently a hot topic; national debate rages over global warming and climate change”, concluded Mayor Decker. “In our community, citizen awareness of energy issues is high. We have many energy efficiency, conservation, and renewable projects completed or underway. The wind turbine visually represents Evansville’s commitment to energy independence. Personally, I am gratified that our community’s youth see that we are actively working to improve where we live.”

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Information for Customer Service Personnel
MEUW Customer Service Summer Roundtable Meetings

On Thursday, August 19, MEUW will again host the MEUW Customer Service Roundtables in five different locations around the state. These small gatherings will open up lines of communication between front office/customer service personnel from MEUW Member utilities to assist with customer service best practices; respond to regional issues or challenges; and prepare for economic, regulatory or environmental challenges.

The MEUW Accounting & Customer Service Seminar in Wisconsin Dells on September 29, will have a stronger accounting emphasis this year, so we are holding these roundtables, as well as the MEUW Collections Seminar in Stevens Point on February 24, 2011, to better address the challenges faced by customer service representatives working on the “front lines” at municipal electric utilities around the State.

All meetings will begin at 9:30 a.m. and adjourn around 11:30 a.m. If you are interested in going to lunch with the group afterward at a nearby restaurant, we can make arrangements ahead of time to ensure there is a large table available. Everyone will pay for their own lunch. The 5 locations scheduled are:
     • Cornell City Hall (222 Main Street; 715/239-3710);
     • Hustisford Community Library (609 West Juneau Street;
       920/349-3463);
     • Kaukauna Utilities (777 Island Street; 920/766-5721);
     • Waunakee Utilities (322 Moravian Valley Road; 608/849-8111);
        and
     • Westby Community Center (in the library; 206 North Main Street;
       608/634-4419).

There is no cost to attend, but please RSVP by August 12 so that we know how many to expect. Registration materials are available online at www.meuw.org/events.htm.

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September 29, 2010
MEUW Accounting & Customer Service Seminar

Join us on Wednesday, September 29 at Glacier Canyon Lodge at the Wilderness Resort in Wisconsin Dells. There will be presentations on banking services; sales tax issues; financing options; a potpourri of accounting topics; and an open records update. In addition, PSC Commissioner Mark Meyer has agreed to join us to discuss current issues. We will conclude with the popular Open Forum.

Registration materials will be sent to your utility in mid-August and will also be posted online at www.meuw.org/events.

See you at the 2010 MEUW Accounting & Customer Service Seminar!

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