Government relations team tracking 2021 legislative bills impacting Basin Electric

Basin Electric’s government relations team is tracking several state legislative bills within the membership’s service area.

Following is a rundown of recent activity regarding a few bills of particular interest to Basin Electric as of the midpoint of the legislative sessions.

South Dakota

South Dakota has had a relatively quiet session with a total of 477 bills introduced, none of which substantively impact rural electric cooperatives.

The South Dakota Rural Electric Association has been monitoring House Bill (HB) 1053, which would establish an annual $50 license and registration fee for electric vehicles, as well as HB 1066, which would allow a school district to transfer wind energy tax revenues from their general fund to their capital outlay fund. Both bills have been passed by the House. The legislature has also passed a bill to limit COVID-19 liability for businesses. This bill, which has been signed by Gov. Kristi Noem, is uniform legislation being introduced in a number of states and is supported by the South Dakota Chamber of Commerce.

Minnesota

Minnesota remains the only legislature in the country with divided control between its House and Senate. After the 2020 election, Democrats retained control of the House with a six-seat margin, and Republicans retained their Senate majority with a three-seat margin after two Democrats changed their party affiliation to Independent.

Nearly 3,000 bills have been introduced so far. Much of the legislation concerning energy policy is a repeat of the previous two sessions. Gov. Tim Walz has again proposed a clean energy standard to require all electricity in Minnesota to be carbon free, though this session he has moved the timeline up from 2050 to 2040. The Minnesota Rural Electric Association (MREA) testified in opposition to this legislation. Another proposal known as “Clean Energy First,” has been reintroduced. This bill would require utilities seeking to build new generation in Minnesota to give priority to carbon-free resources. The Senate version of this bill would allow fossil generation that captures at least 80% of carbon dioxide emissions to qualify as clean energy.

Given competing interests with the legislature having to write a budget this session, and an ongoing dispute from Republicans in the legislature with the governor continuing to extend his emergency powers authority for COVID-19, it is unclear if any substantive energy policy will move forward. MREA is also working to advance the Energy Conservation and Optimization (ECO) Act that it has developed to reform and improve the state’s conservation improvement program that requires utilities to implement energy efficiency measures. The ECO Act would expand opportunities for distribution cooperatives and other retail utilities to promote more beneficial electrification such as electric vehicles, electric storage water heaters, and heat pumps. The bill has strong bipartisan support in both the House and Senate.

Montana

Montana is approaching the halfway point of its session.  More than 900 bills have been introduced, three have been signed into law, and the Montana Electric Cooperative Association (MECA) has several specific priorities.

HB 103, a remote meetings bill, passed the Senate. An amendment was introduced to clarify that the bill will permit co-ops to ask their members to allow electronic voting to be used similar to vote by mail. MECA also testified in favor of HB 394, a bill that removed the sunset for tax exemptions on certain pollution control and carbon capture equipment. This bill passed out of committee.

MECA testified before the House Energy Committee in opposition to HB 346, which would clarify that all solar projects larger than 50 kilowatts (kW) are to be under the Class 13 property tax classification and thus taxed at 6 percent. As drafted, this legislation would likely kill the proposed two 75-megawatt (MW) solar farms in Fallon County, the output of which is to be purchased by Basin Electric. MECA worked with the sponsor to develop an amendment to ensure the solar farms in Fallon County, and others like it, would be treated as qualifying facilities and thus taxed at half that rate they would under current state law. As part of discussion of this bill, the committee chairman expressed strong support in requesting a bill to study electric generation taxes during the interim. This bill passed the House as amended.

MECA also opposed HB 448, which would raise the net-metering cap for non-residential customers of regulated utilities from 50-kW to 350-kW. Co-ops are not subject to the state’s net-metering mandate; however, there were concerns regarding future ramifications should the co-ops ever be placed under the mandate. This bill has now passed out of committee.

A late-breaking bill, HB 607 to expand the Renewable Portfolio Standard (RPS), included provisions to put all Montana’s electric co-ops under the mandate. The bill was rejected in an 8-4 party-line vote. The bill would have required an initial co-op member vote in 2021 on whether to voluntarily comply with all provisions of the RPS, followed by secret member votes every four years.  This would create a voting process so complex it could cause many members to not vote. A potential consequence of that would be a minority of members could place all members under provisions of the mandate.

Iowa

The full Iowa House Commerce Committee scored a big victory for advocates of the vegetation management proposal that is working its way through the Iowa House. The bill, now numbered House File 460, is the utility industry’s attempt to increase safety and reliability of the electric grid by addressing a problem that has surfaced in recent years. As was seen during last year’s derecho (weather storm), trees bringing down power lines is a problem, and the Iowa Association of Electric Cooperatives (IAEC) believes this bill addressing vegetation management is priority number one for the co-ops in Iowa this year. The next deadline to beat will be April 2 when the bill needs to have passed one chamber entirely and the committee of jurisdiction in the other chamber in order to be eligible.

A bill addressing fuel prohibition, House Study Bill 166, advanced out of the House Commerce Subcommittee by a 2-1 margin and will now be considered by the full committee. The bill, led by the Iowa Propane Gas Association, is an attempt to get ahead of more municipal and county governments considering to prohibit the use of carbon-based fuel sources such and propane and natural gas. The origins of local government banning the use of natural gas by not approving building permits utilizing gas started outside of the state. More recently in Des Moines, the city council debated the potential for the city to require that it get all of its power from carbon-free sources by 2030. The IAEC supports the legislation as an example of support for an all-of-the-above energy strategy for the state and nation.

Lastly, there were some revisions to the right of first refusal law passed last session that allow a municipal utility to assign its rights to an electric power agency that serves as its wholesale power supplier and any other affiliate electric power agency. It also created a “shot clock” of 90 and 180 days for intent to build and transmission petition notifications respectively, to be given to the Iowa Utilities Board.

North Dakota

The week of March 8 marked the halfway point of the North Dakota legislative session, with the deadline known as “crossover,” where all bills must be passed from the respective chamber of origin. Last year’s announced retirement of Coal Creek Station has encouraged a significant amount of interest from legislators and the introduction of bills intended to assist the coal industry. While well-intentioned, some of the legislation introduced would have the adverse effect of increasing costs for utility operations in the state -- an unintended consequence that is contradictory to the mutual goal of supporting the state’s generating facilities. Further, Basin Electric has worked with legislators to ensure these proposals align with an all-of-the above energy portfolio to provide reliable electricity at the least possible cost.

The Senate passed SB 2313/SCR 4012, a bill and resolution introduced by House and Senate leadership, to require the state to study grid reliability and generation capacity in the state. Basin Electric supported this legislation as amended with testimony submitted by the North Dakota Association of Rural Electric Cooperatives.

Basin Electric also worked with state Rep. Dave Nehring on his legislation, HB 1455, to improve the 10-year plans required under current law to require that a utility provide notice to the North Dakota Public Service Commission (PSC) of its intent to remove an electric energy conversion facility from service, and allow for the PSC to take public comment on the proposed retirement. HB 1455 as amended was passed unanimously by the House.

Last August Basin Electric and the other generating utilities began working on a package of bills to support the lignite industry, which is now being advanced by the Lignite Energy Council, including HB 1412, which would provide a five-year holiday from the North Dakota coal conversion tax. This legislation would give coal-based generating facilities a much-needed financial incentive in the face of challenging market economics. Other bills include SB 2287, which would study how the state could help lower insurance costs for the coal industry, and HB 1452, which would establish a Clean Sustainable Energy Authority to fund and develop low-carbon energy projects such as carbon capture and sequestration technology.

An unexpected factor that dominated the discussion over many of these bills was the cold snap that affected the central United States in mid-February, ultimately resulting in the rolling outages that impacted North Dakota and other states in Basin Electric’s service territory. Basin Electric staff worked to inform policymakers of the beneficial role that its membership in the Southwest Power Pool (SPP) played during this event. “In the case of protecting the bulk power system during this extreme generation event, SPP managed the power pool accordingly to avoid catastrophic grid failure and cascading controlled outages that can take days or even weeks to recover from,” said Jean Schafer, Basin Electric senior legislative representative.

“This energy emergency was a prime example of why Basin Electric believes so strongly in an all-of-the-above energy strategy and benefits from participating in SPP," said Basin Electric CEO and General Manager Paul Sukut.

For example, when one of Basin Electric’s coal units tripped over the weekend of Feb. 13 due to an electrical failure at a substation, the cooperative was able to seamlessly cover the generation shortfall from SPP. The Federal Energy Regulatory Commission and North American Electric Reliability Corporation have already announced a joint inquiry into this event, in addition to calls for review by the PSC.

Wyoming

The Wyoming legislature took most of January and February off due to the COVID-19 pandemic. Now that it is back in session, legislators are in the process of drafting and introducing several energy-related bills.

HB 166 states that the Wyoming Public Service Commission will not approve the early retirement of a coal plant unless utilities can prove several requirements, such as reliability, dispatching, and the sufficient amount of baseload electricity can be met without the plant. This bill has full support of both the House and Senate’s leadership. 

HB 155 relates to public utilities requiring consideration of reliability factors before approving the closure of an electric generation facility, imposing liability on public utilities for failing to provide reliable service as a result of a transition to other sources of energy, limiting recovery of costs for liability as specified, amending definitions, specifying applicability, making conforming amendments, requiring rulemaking, and providing for effective dates.

HB 207 allocates $1.2 million to the governor’s office to initiate lawsuits against other states that limit or deny Wyoming coal-based generated electricity.  

HB 248 states that all electricity sold in Wyoming must come from Wyoming-generated sources unless it can be documented that Wyoming electricity was unavailable or the out-of-state power was cheaper.

HB 257 states that no electric public utility shall seek to retire a coal-based generating plan from July 1, 2021 to June 30, 2035.

Other legislation of interest to Basin Electric is a bill to allow county assessors to access confidential information about property from the Wyoming Department of Revenue, and a bill concerning unfair employment practices for offsite lawful activities. Several other bills are being monitored for their effects on Basin Electric's membership.

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