Ditto outlines APPA priorities for 2021, details success in meeting pandemic, hurricane challenges

by Paul Ciampoli
APPA News Director
February 9, 2021

In remarks made at recent energy industry events, Joy Ditto, President and CEO of the American Public Power Association, outlined APPA’s priorities for 2021 and detailed how public power in 2020 was successful in meeting the dual challenges of the COVID-19 pandemic and a significant hurricane season.

“As we go into the legislative environment on COVID-19 response, we are certainly looking for increases in programs like the Low Income Home Energy Assistance Program, which we’ve long supported,” she said at the United States Energy Association’s annual State of the Energy Industry Forum on Jan. 28 in detailing the Association’s priorities for this year.

“We’re looking for some changes: to the program “to allow folks above the typical threshold of low income to access that program.”

Ditto noted that the Biden Administration has proposed a very robust program for COVID-19 response that is currently being debated. “We will certainly be very engaged in that.”

A group of national gas and electric utility associations, including APPA, on Feb. 4 sent a letter to Congress calling for a $10 billion emergency supplemental appropriation for LIHEAP.

On the climate change front, APPA supports climate change legislation, Ditto noted. “We will be working on the specifics of what that legislation should look like.”

In addition, APPA also believes it is important to continue to highlight the fact that public power utilities do not receive tax credits for clean energy development, while investor-owned utilities and independent power producers do receive such credits.

“Our communities are frankly being put at a disadvantage vis a vis federal policy in that regard,” she said. “We have long sought what we call comparable incentives for development of these clean energy projects and that’s something that we have strong bipartisan support on and I’m very hopeful we can get across the transom this Congress.”

Turning to financing tools for public power, Ditto noted that APPA will be working to put back in place advance refunding bonds. The Tax Cuts and Jobs Act of 2017 eliminated the ability to issue advance refunding bonds.

Ditto said that a COVID-19 omnibus energy bill package that passed in December included elements that will benefit public power.

For example, there is a new grant program that has been created at the Department of Energy that will help cooperatives and public power to deploy energy storage infrastructure. This will need to be funded through the appropriations process, “so we’ll be working on that.”

Along with energy storage, other infrastructure-related issues of importance to APPA include electric vehicles “and about what Congress may say about transmission policy.”

APPA has “long supported additional capabilities to site transmission within parameters. We had a provision in the Energy Policy Act that was struck down in the courts, but we certainly support additional efforts to site needed transmission.”

At the same time, APPA would be hesitant about any additional incentives for transmission if that were to be proposed in legislation.

The public power trade group is also looking at the Federal Energy Regulatory Commission “to see if they’ll back off some of their incentive rate proposals. There was some good action on that recently where they did not take that forward in a rulemaking related to revisiting transmission incentives. We think the existing policy around transmission incentives is the right one.” 

APPA continues to care deeply about the ability to use all types of resources. “When we are going into any kind of climate change legislation we want to make sure we have a diverse portfolio of resources we can deploy” and that costs, affordability and reliability “are still at the forefront of any climate change legislation that comes down the pike, as well as the emissions reduction piece that is so important.”

In addition, APPA would work with the electric cooperative community to oppose any “nefarious activity” related to the federal power marketing administrations and the Tennessee Valley Authority.

In February 2020, APPA and the National Rural Electric Cooperative Association (NRECA) said that they were disappointed to see that the fiscal year (FY) 2021 budget request released by then-President Trump proposed to divest the transmission assets held by the Tennessee Valley Authority and three of the Power Marketing Administrations: Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration.

This was the fourth year in a row that the budget request made the misguided proposal to divest their transmission assets, the associations said, adding that they would adamantly oppose any effort by the federal government to privatize TVA and PMA assets that have been paid for by electricity customers.

At the same time, APPA and NRECA said that they were also disappointed to see that the FY 2021 budget request again proposes to increase PMA rates by changing the current cost-based rate structure.

Ditto noted that we have seen these types of problematic efforts in previous administrations as well, regardless of party affiliation.

Ditto discusses pandemic response, reliability and cybersecurity issues at NERC summit

Meanwhile, in late January, Ditto participated in a Reliability Leadership Summit hosted by the North American Electric Reliability Corporation and the Reliability Issues Steering Committee.

In her remarks, Ditto noted that many public power communities include electric, gas and water utilities and, in some cases, broadband utilities.

When the pandemic emerged, APPA brought together members that have this mix of utilities to talk through the pandemic response and some of the challenges “to our respective utilities as we manage emergencies,” Ditto noted.

“Layered on top of the pandemic last year was a major hurricane season that probably” would have received a lot of attention had it not been for the pandemic, she said.

Early on in the pandemic, the power sector began planning for “what would we do when we needed to have a response to a hurricane or a major weather event.”

Through mutual aid events, public power utility crews need to cross state lines and work together in order to restore power, “so they had to plan for how they were going to travel” and what steps would be taken in order to ensure their safety in the midst of the pandemic.

“The good news is we did that successfully while keeping our folks safe,” Ditto said.  “We worked very closely with the gas industry when we were talking about our response in” the Electricity Subsector Coordinating Council (ESCC).

The ESCC serves as the principal liaison between the federal government and the electric power industry on national level response issues such as pandemics. Ditto serves on the ESCC Steering Committee. Kevin Wailes, CEO of Lincoln Electric System, is an ESCC co-chair.

Three other public power CEOs also sit on the ESCC directly (Jackie Crowley, Middleborough Gas & Electric Dept.; Gil Quiniones, New York Power Authority; and Mike Hummel, Salt River Project) and another three lead or participate in working groups: (Brian Skelton, Tullahoma – cross sector communications working group; Randy Howard, NCPA – ESCC Wildfire working group Co-Lead; and Scott Corwin, NWPPA – ESCC Wildfire Working Group member).

GridEx

Meanwhile, Ditto noted that during the 2019 GridEx, which occurred in November 2019, natural gas executives were invited to participate in the exercise.

“That dialogue was really helpful, and I think it opened some eyes on both the electric and gas side to some of the challenges that might face them in a true crisis situation,” she said. Ditto said that continuing to invite natural gas officials to participate in GridEx is something that should be continued “and also other exercises that encourage that cross-sector component to come into play.”

GridEx allows utilities, government partners and other critical infrastructure participants to engage with local and regional first responders, exercise cross-sector impacts, improve unity of messages and communication, identify lessons learned and engage senior leadership.

The exercise began in 2011 and NERC hosts the GridEx series. The next GridEx takes place Nov. 16-17, 2021. APPA encourages its members to participate in GridEx. Please reach out to Cybersecurity@publicpower.org for additional information.

Telecommunications

The electric sector has always understood that communications is integral to what the power industry does, she said.

“We’ve understood that there was an important connection between communications and the grid for decades and we’ve tried to manage that risk by actually performing the telecommunications function ourselves,” Ditto said.

But some members of APPA “just aren’t situated to do that.” Other public power utilities have decided to lay down fiber and provide broadband services externally to their communities “because they were having trouble getting that service and that helps them with their robust internal needs as well.”

Some public power utilities have to rely on external public networks that aren’t as reliable and “we don’t have control over them.”  

From a cybersecurity standpoint, that can be a risk “because we don’t have direct situational awareness” in terms of “what is coming into our system, what attacks are happening on our system,” Ditto said.    

Noting that telecommunications plays a key role in ensuring the reliability of the grid, Ditto said that the Federal Communications Commission (FCC) has fallen short in terms of recognizing the need for it to move beyond its singular focus on the telecommunications sector.

With respect to private wireless communications networks, there is a regulatory regime in place at the FCC “that has no interest in really caring or hearing about other sectors beyond the communications sector.” Ditto pointed out that the federal agency was created at a time when that was its sole focus.

“Communications apply across the board much more fully now in a digital society. Yet the FCC’s mandate does not really lend itself to looking more broadly at the impact its policies have on our industry.”

Access to radio spectrum is “the lifeblood of being able to communicate wirelessly,” she said. “Having interference to that wireless communications can be the difference between a reliable electric system and something that’s less than reliable.”

She underscored the importance of this issue, noting that “we can’t lay wire everywhere.” She said that “there is a gap here and I think it’s going to require some leadership by Congress, some leadership by the administration to try to really force the FCC to allow us to come to the table and to hear us when we express these concerns.”