Government action report

Dale Niezwaag

The big news of the Government Action Report was the election held on Nov. 6, the day before the Annual Meeting. After reviewing elections results for several races throughout Basin Electric’s service territory, Senate Republicans will have 51 seats, Democrats will have 47, and two seats have not been called. In the House, Democrats will have 231 seats and Republicans will have 198, with six seats undecided.

Several ballot measures in Basin Electric’s areas of interest, included:

  • Measure 1 passed in North Dakota. It creates an Ethics Commission, and rules which will require reporting any funds over $200 spent to influence state decisions by any member of the public and disclosure of the source of those funds.
  • Measure W in South Dakota was similar to Measure 1 in North Dakota, but did not have a financial disclosure requirement. That measure was defeated.
  • The State of Washington proposed instituting a carbon tax with the funds being used for greenhouse gas reduction and renewable energy products. This measure was defeated.
    • As a side note, on the federal level, a carbon tax was introduced earlier this year that sought to eliminate gasoline and diesel fuel taxes and halt greenhouse gas regulations on electric generating plants. The money from this tax would be used for infrastructure such as roads and bridges. While this measure failed, this concept will likely come up again in the future.
  • Deregulation allowing companies and individuals to buy electricity wherever they want, generate whatever electricity they want, and sell it wherever they want was proposed in Nevada. This was defeated
  • A renewable portfolio standard that requires 50 percent renewable energy by 2030 was passed in Nevada but defeated in Arizona.

This year, the Affordable Clean Energy (ACE) Rule was introduced to replace the Clean Power Plan. ACE focuses on “inside the fence actions” and seven technologies that can help make power plants more efficient. ACE instructs the EPA to provide guidance, but leaves implementation of the plan to the states. The rule came out on Aug. 21, formal comments were submitted Oct. 31, and a final rule is expected around March of 2019. We hope to get a court decision on the rule before the 2020 election, but it will likely take 18 months to two years to litigate.

New Source Review is an air quality permitting program meant to prevent extensive upgrades on a power plant but have it still qualify as an existing plant to avoid meeting regulations for new plants. However, what has happened is violations have been called if a plant installs more efficient replacement parts, adds emission-control equipment, or does routine component replacements. Because of this situation utilities are reluctant to make these changes and risk tripping the New Source Review process.

Legislation has also been introduced in the House to modify New Source Review. The main change is that instead of increased annual regulated emissions potentially qualifying a plant for a review, only an increase in hourly regulated emissions could qualify for a review. At this point, the legislation has passed the committee, but has not been voted on by the full House.

45Q is a tax credit made available for using carbon dioxide (CO2), either for enhanced oil recovery or sequestration. The “old” 45Q rule was hard to use due to qualifications, caps, and the amount of the credit.  Modifications passed by congress to 45Q increases flexibility, removes the cap, increases the amount of the credit and provides for easier transfer to entities that can utilize the credits. The next step is for the IRS to write the rules on how it gets implemented. Basin Electric continues to provide input on the IRS on the implementation.
The Public Utilities Regulatory Policies Act (PURPA) was enacted 40 years ago during the energy crisis to promote conservation and renewable energy. However, the rule is badly outdated for the current renewable energy industry and market options.  New legislation has been introduced to reform PURPA, and Basin Electric supports the legislation.

Government Relations is keeping an eye on efforts by the Federal Energy Regulatory Commission (FERC) and the Department of Energy to address grid resiliency issues by pushing for rules that recognize and effectively compensate generation sources for the essential services they provide. Basin Electric provided comments supporting that position.

Government Relations works year-round attending events, meetings, and hearings to keep abreast of, and influence the issues that impact Basin Electric on multiple levels politically and through the membership.