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APPA Details How SEC’s Proposed Climate Disclosure Rule Will Harm Public Power

June 30, 2022

by Paul Ciampoli
APPA News Director
June 30, 2022

A proposed climate-related disclosure rule issued by the Securities and Exchange Commission (SEC) will have an adverse effect on the American Public Power Association’s (APPA) members, even though those members, as no-for-profit providers of electric power, are not publicly traded or directly subject to the proposed rule, APPA said in recent comments submitted to the SEC.

More than three million businesses receive their power from a publicly owned electric utility, APPA noted in its June 17 comments. In some instances, these businesses are publicly traded companies that would be required to comply with the proposed rule if finalized, including the proposed requirement that all publicly traded companies disclose their “Scope 2” emissions (i.e., the amount of greenhouse gas emissions attributed to the company’s purchase of electricity).

“As a result, if finalized, the Proposed Rule will have a significant adverse effect on public power utilities through increased costs to provide information to public power utility customers for their SEC filings. These increased costs will not be borne by shareholders or investors, but by the citizens of the communities that own the public power utilities,” APPA said.

The proposed rule will impose significant additional costs on public power utilities “that go well beyond what is currently required to assist customers with their voluntary reporting of greenhouse gas emissions,” the group said.

APPA also said that the requirement in the proposed rule that certain publicly traded companies report their “Scope 3” emissions will have a cascading, extremely costly effect on public power.

Scope 3 emissions are those indirect emissions (other than emissions associated with purchased power) that occur in the upstream and downstream activities of a registrant’s value chain.

Upstream emissions include emissions attributable to goods and services that the registrant acquires, the transportation of goods (for example, to the registrant), and employee business travel and commuting. Downstream emissions include the use of the registrant’s products, transportation of products (for example, to the registrant’s customers), end of life treatment of sold products, and investments made by the registrant.

Registrants are required to report their Scope 3 emissions if those emissions are material or if the registrant has set an emissions goal or target that includes Scope 3 emissions. The SEC believes that many registrants will need to report Scope 3 emissions because those emissions are material.

“The requirement for certain registrants to report their Scope 3 emissions means that public power utilities will also need to report data to their customers that are not publicly traded companies because those customers are going to need to provide data to their customers or suppliers that are publicly traded and need to report Scope 3 emissions,” APPA said.

The group said that along with the questionable benefit of gathering and reporting uncertain or inaccurate information, “there are also concerns about the increased costs of substantially expanding the scope and scale of emissions that must reported.”

First, the sheer number of companies that will be required to report will vastly exceed what is being done voluntarily now, APPA argued.

“Second, there will be a huge number of companies that are not subject to the Proposed Rule that will be required to provide information to their customers and suppliers, and this will exponentially increase the number of entities that need information.”

Third, the stakes for customers’ reporting are much higher under the proposed rule than they are for the voluntary programs, APPA said.

It noted that under the proposed rule, accelerated filers and large accelerated filers must provide “reasonable assurance” (after a short transition period) that the emissions calculation that they provide is accurate. Failure of a reporting company to meet this standard has serious liability ramifications, APPA said.

“There is a big difference between providing information to public power customers to assist them with estimating their Scope 2 emissions for a voluntary program and providing information to those customers to aid them in complying with an SEC-mandated program for which there are grave consequences for making a mistake.”

These additional burdens that are associated with the proposed rule will have an adverse effect on public power, APPA told the SEC.

For some public power providers, the effect may be relatively minimal, simply involving the additional cost of ensuring that current practices comport with the new demands for information from customers.

“For others, however, the costs will be substantial, requiring the hiring of additional staff to manage customer requests and outside consultants to ensure responses to these requests meet regulatory requirements.”

APPA noted that one larger public power utility estimates that it would need an additional two to three full-time employees on staff to work through all the calculations of hourly replacement power under contractual agreements with one major supplier and other purchase power agreement counterparties. These staff would also be required to obtain information on the hourly energy mix of the wholesale market to calculate Off-System Purchase and Imbalance Energy emissions.

Moreover, public power utilities do not have shareholders or investors onto whom to pass additional costs of complying with the proposed rule, APPA pointed out.

Rather, because public power is not-for-profit and community-owned, these costs will be passed directly to their residential and business customers.

Some of the areas served by public power utilities are economically disadvantaged communities and households. In addition to being served by public power utilities, many economically disadvantaged areas – particularly rural areas – are served by electric cooperatives.

The fact that poor customers in economically disadvantaged areas are going to have increased costs associated with the proposed rule – “costs that they will have to bear and that cannot be passed on to investors — raises serious environmental justice concerns,” APPA said.

SEC 2010 Guidance

In 2010, the SEC released guidance regarding the types of disclosures that publicly traded companies must report in their SEC filings.

“To the extent that the SEC believes that there are gaps in what is being reported to investors, APPA suggests that the Commission instead update the 2010 Guidance or provide additional interpretive guidance regarding those gaps,” the group said.

“This approach would be much more targeted and streamlined than the Proposed Rule and would have the advantage of adhering to the SEC’s longstanding principle that only information that is material to investors need be disclosed by registrants in their SEC filings.”

Scope 3 Emissions

Under the Proposed Rule, a registrant must disclose their Scope 3 emissions if those emissions are “material,” or if the registrant has set a greenhouse gas emissions target or emissions reduction goal that includes Scope 3 emissions.

“APPA suggests that the SEC consider making any requirement to disclose Scope 3 emissions voluntary. This could result in a reduction in the burden and costs put on public power utilities. Conversely, while this would result in a reduction of the volume of information provided to investors, if that information is duplicative or unreliable,” it would not result in a reduction of information on which investors and shareholders could confidently rely.

CPS Energy’s Five-Year Energy Efficiency And Conservation Plan Is Approved

June 29, 2022

by Paul Ciampoli
APPA News Director
June 29, 2022

The San Antonio City Council on June 16 approved a CPS Energy five-year energy efficiency and conservation plan.

The approved plan for CPS Energy’s evolution of its Save for Tomorrow Energy Plan (STEP), will be funded as a $350 million initiative over the next five years. The average bill impact will continue to be $3.50 per month to an energy bill. 

The program goals include 410 megawatts of demand reduction, 1% energy savings per year, 16,000 weatherized homes and 1.85 million tons of avoided carbon.

The plan includes:

Since June 2021, CPS Energy has held a dozen collaborative sessions to design a new program with feedback from the Board of Trustees, Rate Advisory Committee (RAC), Citizens Advisory Committee, the Municipal Utilities Commission, and public comment during the Board and RAC meetings.

The current STEP program expires on July 31, 2022. With this month’s approval, CPS Energy will work to finalize additional details, including public awareness and community outreach plans.

For more information about STEP, visit the STEP webpage here.

Calif. Public Utilities’ Efficiency Efforts Reduced Demand By 81 MW In 2021

June 29, 2022

by Peter Maloney
APPA News
June 29, 2022

California’s publicly owned utilities spent $159 million on energy efficiency programs in fiscal year 2021 helping to reduce demand by about 81 megawatts (MW), according to a new report from the California Municipal Utilities Association (CMUA).

Those energy efficiency investments also helped contribute to 2,851 gigawatt hours (GWh) in lifecycle energy savings and a 254 GWh reduction of annual electricity consumption, the report, Energy Efficiency in California’s Public Power Sector – 16th Edition (2022), also noted.

California’s fiscal year runs from July 1 to June 30.

Since 2006, California publicly owned utilities collectively spent nearly $2.5 billion on energy efficiency and demand reduction programs, saving nearly 8,300 GWh in net energy during, the report said.

The COVID-19 pandemic continues to have an impact on energy efficiency, the report noted. California’s electricity demand was down in 2021, keeping energy efficiency program yields below pre-pandemic levels. In addition, some programs, such as those requiring direct interaction for installations, had to be suspended.

Some of California publicly owned utilities began to return to programs that require direct interaction while others have indicated they intend to return to those programs in 2022.

Also, the pandemic prompted some CMUA members to change their clean energy focus. The Sacramento Municipal Utility District (SMUD), for instance, is expanding its building electrification efforts and is transitioning from an energy reduction metric to a carbon reduction metric, the report noted.

“This important report details the significant investments we are making to help our customers become more energy efficient,” Barry Moline, executive director of CMUA, said in a statement. “Energy efficiency programs are vitally important to help keep rates affordable while meeting California’s climate goals as the state continues to move toward 100 percent clean energy.”

California’s publicly owned utilities offer their customers a wide range of energy efficiency programs, including direct- and self-install programs for lighting and appliances, home weatherization and retrofits, electric vehicle incentives and rebates, energy storage, business and residential energy audits, public education, and low-income assistance, according to the report. The programs are funded from cap-and-trade allowances, the Public Goods Charge, and other sources.

The 40 publicly owned utilities that contributed data for the report provide electricity to about 25 percent of California. The commercial and industrial sectors account for about 72 percent of the annual energy savings and residential programs resulted in 26.6 percent of the total savings, according to the report.

New Report Highlights Key Role Of Natural Gas In Electric Power Sector

June 28, 2022

by Paul Ciampoli
APPA News Director
June 28, 2022

Natural gas will continue to be an important driver of electric reliability and cost in the U.S. and the nexus between the electric and natural gas industries will continue to be critical for the foreseeable future, a new report prepared for the American Public Power Association (APPA) states.

The report, released on June 24, was prepared for APPA by GDS Associates Inc., an energy industry consulting firm.

The report covers a wide range of topics including an overview of the natural gas industry, the electric and natural gas nexus and pipeline infrastructure needs.

With respect to the nexus between the electric sector and natural gas, the report notes that in the last 15 years, the intersection between the electric and natural gas industries has expanded and intensified.

“Natural gas has grown significantly as an electric generation fuel source in that time, both as a replacement for retiring coal and as flexible generation, balancing growing intermittent resources like wind and solar,” the report said.

It noted that the prominence of natural gas-fueled generation has been propelled by the shale gas revolution, which significantly increased domestic natural gas production, “resulting in sustained low prices for several years and a redefinition of how the natural gas pipeline network was utilized and expanded.”

Higher and higher intermittent generation penetration and the uncertainty and variability of electric output from these sources “make quick-starting natural gas generation a critical reliability component on the grid,” the report said.

Natural gas-fired electric generation will remain critical to maintaining reliable electric service for the foreseeable future, according to the report.

It points out that the U.S. Energy Information Administration (EIA) projects that natural gas resources will remain relatively constant as approximately one-third of the generation capacity mix through 2050, with some regions likely at a higher percentage.

Natural gas remains an important fuel for generating plants owned by public power utilities to serve the customers in their communities. According to analyses by APPA, natural gas-fueled power plants accounted for 44.1% of generating capacity owned by public power utilities as of 2020, and 34.4% of the energy generated by public power-owned facilities, the report noted.

It said that the importance of natural gas-fueled generation to reliable electric service “creates significant interdependencies between the electric and natural gas industries. These interdependencies have been areas of particular focus for years, often highlighted by severe winter weather events when peak electricity and natural gas usage coincide.”

Impact Of Natural Gas Prices On The Cost Of Power

Meanwhile, the report notes that there is a well-established connection between wholesale natural gas and power prices.

The recent increase in natural gas prices has been attributed to reduced exploration due to the COVID pandemic and environmental policy, fallout of the February 2021 arctic weather event, increased difficulty financing exploration, and increased liquefied natural gas (LNG) export activity, among other factors.

“Indeed, over the past seven years, the amount of LNG exports from the U.S. has consistently risen and is expected to continue to rise. This trend has only been accelerated and intensified due to the war in Ukraine, and domestic users of natural gas are increasingly competing with global users.”

As natural gas electric generation has grown and played a large part in replacing coal generation, the U.S. electric system is more heavily impacted by the price of natural gas. “Coal continues to compete with natural gas resources – and is relatively advantaged because of the recent increase in natural gas prices – but large amounts of coal generation have retired so its role as a substitute for natural gas fuel has diminished,” the report pointed out.

Renewables can also compete and substitute for natural gas generation, but their variable output means that natural gas generation also serves a complementary role with renewables. “Both coal and renewables have been challenged with supply chain disruptions which also reduce their capability to compete with natural gas.” 

The importance of natural gas to reliable and affordable electric service “highlights the need to ensure an adequate and reliable natural gas supply chain, including sufficient natural gas transportation infrastructure,” the report said.

Among the report’s key conclusions was that “[w]ithout adequate natural gas supply and the pipeline infrastructure to transport it, natural gas, power, and home heating customers are likely to experience elevated energy prices.”

Regulation and Pipeline Infrastructure

As for regulation and natural gas pipeline infrastructure, the report notes that as the lead regulator with authority to approve new interstate natural gas pipeline facilities, the Federal Energy Regulatory Commission (FERC) plays a significant role in ensuring adequate infrastructure exists to meet demand for natural gas, including that for electricity generation.

In the past few years, FERC has been undertaking an overhaul of its processes for reviewing new pipeline applications, with potentially significant implications for natural gas supply and price reliability, the report said.

In 2018, FERC began exploring whether it should revise its gas pipeline certification policy statement that was originally issued in 1999. More recently, FERC in March 2022 voted to seek additional comments on two policy statements it issued in February that provide guidance regarding the certification of interstate natural gas pipelines and consideration of greenhouse gas emissions in natural gas project reviews. 

“As the need for natural gas to address critical needs persists, including ensuring electric reliability, regulatory processes for review and approval of gas pipeline infrastructure must be efficient and provide regulatory certainty and predictability to applicants and other stakeholders,” the report states.

“Efficiency is achieved by having decision processes that are as streamlined and expeditious as possible, given statutory requirements, to provide reasonable outcomes while avoiding unnecessary delays or effort. Certainty is achieved with concrete and clear approval requirements. There should be a clear path to approval if required conditions are met. Efficiency and certainty are critical pillars of regulatory approval processes that should harmonize with the extent of statutory requirements of review.”

FERC’s goal to have legally durable pipeline approvals “is entirely consistent with the need for regulatory certainty and efficiency. A regulatory approval process can and should meet statutory requirements (avoiding judicial reversals) while also providing efficiency and certainty for applicants.”

At the same time, the report said that if regulatory approval processes are inefficient or create uncertainty, then needed infrastructure investment can be adversely affected.

Groups Urge Congress To Prevent The Potential Elimination Of Bond Payments

June 27, 2022

by Paul Ciampoli
APPA News Director
June 27, 2022

The American Public Power Association (APPA) and 13 other members of the Public Finance Network recently urged leaders of the House and Senate Budget Committees to prevent the potential elimination of direct payment bond payments starting in 2023.

The June 21 letter stems from concern that unless Congress acts to waive the Pay As You Go Act (PAYGO) in relation to the American Rescue Plan Act (ARPA) enacted last year, payments to issuers of direct pay bonds will be eliminated in 2023 through 2026.

At the end of 2021, Congress moved to prevent PAYGO from applying to ARPA in 2022. However, Congress failed to provide a permanent fix to the problem. Based on Office of Management and Budget data, unless Congress acts, direct payment bond payments will be cut by $14 billion — roughly eight percent of which would fall on public power issuers.

“As we collectively worked to emerge from the Great Recession over a decade ago, state and local governments utilized options made available to stimulate the economy and undertook several hundred billion dollars in critical, long-term infrastructure obligations through the issuance of direct subsidy bonds,” the letter noted.

At the time, the understanding was that federal payments related to these bonds would not be subject to the appropriation process and would not be subject to sequestration. “To our dismay, the federal government appears on the brink of completely reneging on this deal by eliminating $14 billion in payments to state and local entities,” APPA and the other groups said.

Specifically, unless new legislation is enacted that will waive PAYGO) as it relates to the budgetary effects of ARPA, thousands of state and local entities will not receive any Build America Bond (BAB), Qualified School Construction Bonds (QSCB), Qualified Zone Academy Bonds (QZAB), New Clean Renewable Energy Bonds (New CREB), or Qualified Energy Conservation Bonds (QECB) payments otherwise guaranteed to them under the law. 

The letter notes that entities that issued these bonds — generally in 2009, 2010, and 2011 — did so in partnership with the federal government.

Payments to issuers of the special purpose bonds “are already laboring under a steady stream of cuts triggered by the Budget Control Act of 2011 due to the failure of the Joint Select Committee on Deficit Reduction,” APPA and the other groups said.

These “Joint Committee Reductions” began in 2013 and are now expected to continue through 2031. Joint Select Committee reductions will have cut payments by nearly $3 billion by the end of Fiscal Year 2022 and will cut payments by another $1.6 billion by the end of Fiscal Year 2031.

“Allowing Joint Committee Reductions to continue is a travesty,” the groups argued. Allowing PAYGO to eliminate these payments entirely “would be catastrophic: to communities that stepped up during the Great Recession to try to create jobs when job creation was desperately needed; to students in schools that are already underserved; and to renters and homeowners that are already struggling to pay utilities, taxes, and other bills.”

As a result, the groups said that they hope that Congress “will overcome its differences and fix this problem for all Americans.”

Those also signing the letter include, among others, the Large Public Power Council, American Public Gas Association, U.S. Conference of Mayors, National League of Cities, National Association of Counties, and Government Finance Officers Association.

FMPA Implementing Strategies To Mitigate Rising Fuel Costs For Florida Public Power

June 27, 2022

by Paul Ciampoli
APPA News Director
June 27, 2022

The Florida Municipal Power Agency (FMPA) is taking a number of steps to mitigate rising fuel costs, including selling excess power generation to other cities, prepaying for natural gas at discounted prices, operating highly available and efficient units, and refinancing debt, said Navid Nowakhtar, Resource and Strategic Planning Manager at FMPA, in a recent presentation.

He made his remarks during a June 7 presentation to the Fort Pierce Utilities Authority (FPUA) Board. FPUA is a member of FMPA, a wholesale power agency owned by 31 municipal electric utilities in Florida.

In his presentation, Nowakhtar detailed the drivers behind some of the energy price increases seen in the U.S., including higher natural gas prices.  

He noted that in Florida, 80% of “our electric generation is from natural gas – that’s our primary fuel source.”

Across the U.S., “historically, we would have had coal resources pick up some of the slack as gas prices rose, but as a result of retirements and additional infrastructure challenges related to coal generation and transport with coal, we don’t have that substitute effect any longer to the extent we had it in prior periods,” Nowakhtar said.

He said the demand for natural gas has increased, while production remains flat, and noted that natural gas inventories remain low.  

“As we look at these price challenges, one of the opportunities” potentially in play “is to look at fixed-price natural gas,” Nowakhtar said. “Certainly, not over the course of this coming summer — gas prices already are well above the norm.”

At a later point in his presentation, he noted FMPA is doing several things to help mitigate the impact of high fuel costs on customers.

Nowakhtar noted that FMPA’s efforts have saved more than $32 million since fiscal 2021.

Those savings are as follows, FMPA noted:

He also noted that “if you look at where Fort Pierce’s rates are today through the end of last year, they’re actually lower than they were in 2008.” Residential rates are down about 23%, while U.S. rates have gone up about 22%.

He said FMPA has “done a lot of work to try to keep our costs as low as we can to you.”

Nowakhtar also pointed out that FMPA is continuing to pursue low-cost solar. “We’re in the process right now of the procurement efforts for phase three of our solar project. We already have two sites totaling 149 megawatts” that are online.

In 2022, FMPA’s percentage of solar energy stood at 2%, but that is projected to grow to 7% of its generation mix by 2027.

He said there are seven to 10 FMPA communities “or more” that could be interested in the third phase of the solar project, which will involve as much as two to three sites of additional solar.

In a recent letter to leaders of the U.S. Senate Energy and Natural Resources Committee, FMPA’s General Manager and CEO Jacob Williams said Florida is uniquely impacted by the 150% cost increase for natural gas, given the state’s dependence on natural gas for electricity generation.

He noted in the May 2 letter that residential bills in Florida were already 15-30% higher. “This is especially challenging for us since our power consumption is 25% higher than the national average and income is 10% lower than the national average. In addition, Florida residents consume half of the electricity generated in Florida, the largest share of any state in the U.S. And the skyrocketing energy prices in the U.S. very well may get worse,” Williams wrote in his letter to Sen. Joe Manchin, D-W.Va., Chairman of the committee, and Sen. John Barrasso, R-Wyo., and ranking member on the committee.

APPA Seeks Nominations for Three Openings on RP3 Review Panel

June 22, 2022

APPA News
June 22, 2022

The American Public Power Association (APPA) is accepting nominations now through Tuesday, July 5, 2022 for an open position on the Reliable Public Power Provider (RP3) Program Review Panel. 

APPA’s RP3 program is based on industry-recognized leading practices in four important disciplines:

A RP3 designation is a sign of a utility’s dedication to operating an efficient, safe, and reliable distribution system. Being recognized by the RP3 program demonstrates to community leaders, governing board members, suppliers, and service providers a utility’s commitment to its employees, customers, and community. Currently 275 of the nation’s more than 2,000 public power utilities hold a RP3 designation. 

Each member of the Panel can serve for up to three consecutive two-year terms (for a total of six years), and is expected to attend three meetings per year, one in the spring and two in the fall. The appointed member’s first term will begin immediately and expire after two years in 2024 (at the Business meeting of that year). Please find the position requirements below:

More information on the RP3 program is available on the RP3 website. To nominate someone, please click here to download the nomination form: 

The completed nomination form and any supplementary materials should be emailed to RP3@PublicPower.org. If you have questions, contact RP3 Staff at RP3@PublicPower.org or 202-467-2931.

California Community Choice Aggregator Unveils Virtual Power Plant Program

June 22, 2022

by Paul Ciampoli
APPA News Director
June 22, 2022

California community choice aggregator (CCA) Marin Clean Energy (MCE) on June 21 unveiled a Virtual Power Plant (VPP) program that is slated to launch in 2025.

MCE said the program will provide bill savings and increase local grid reliability, safety, and efficiency for low-income residents as part of Richmond, Calif.’s Advanced Energy Community project, which includes $3 million in funding from the California Energy Commission and will rehabilitate abandoned homes with energy efficiency retrofits and establish a VPP.

The Advanced Energy Community brings together a variety of partners including the project developer, ZNE Alliance, and ALCO Building Solutions, Ecoshift Consulting, Energy Solutions, mPrest, Richmond Community Foundation, THG Energy Solutions, TRC, and ZGlobal.

Similar to traditional power plants, VPPs provide electricity to the grid, but instead of coming from a single source, VPPs are made up of a network of digitally-connected technologies distributed across a community. VPPs help stabilize the power grid by quickly dispatching power to and from resources on the grid to shift energy consumption out of peak hours and take greater advantage of midday solar generation.

MCE’s VPP will include energy storage, smart thermostats, rooftop solar, heat pump space and water heating, and EV charging.

The VPP will initially be connected to up to 100 Zero Net Carbon Homes (ZNC Homes) and larger commercial and industrial sites. The ZNC Homes program will finance the acquisition, complete rehabilitation, and re-sale of homes as affordable properties. These ZNC homes will be built to be energy efficient and resilient, and each home will have a full complement of smart appliances and cost-saving equipment, including rooftop solar, battery energy storage, and heat pumps.

Local businesses will also have an opportunity to install batteries that provide resilience to grid outages, bill savings, and revenue generation potential, MCE said.

MCE will use the VPP in the statewide power markets – managed by the California Independent System Operator (CAISO) – to demonstrate the aggregation of customer resources by a CCA, and the integration, scheduling, and settlement of these resources in the CAISO markets.

Participating residents “will be paid for their role in providing localized grid services through a dynamic value-sharing agreement,” MCE said.

MCE is a load-serving entity supporting a 1,200 megawatts peak load. MCE provides electricity service and programs to more than 540,000 customer accounts and more than one million residents and businesses in 37 member communities across four Bay Area counties: Contra Costa, Marin, Napa, and Solano.

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.

Florida Public Power Utility Gainesville Regional Utilities Interested In Energy Storage Options

June 22, 2022

by Paul Ciampoli
APPA News Director
June 22, 2022

Florida public power utility Gainesville Regional Utilities (GRU) recently issued a request for information (RFI) for energy storage.

The discharge duration for the energy storage facility should be at least 8 hours, the RFI said.

“While GRU is historically a summer peaking utility, it is trending towards becoming a dual season peaking utility. Load is forecast to increase both with population growth as well as greater electricity consumption due to electrification,” the RFI noted.

The energy storage system “will be used to reduce those peaks to fulfill its mission of providing reliable and affordably priced electricity.”

While long-duration batteries are of particular interest, GRU said it is open to other forms of energy storage. Geologic and geographic constraints preclude pumped storage and underground compressed air energy storage as viable choices. All other forms of energy storage will be reviewed.

The 2022 Infrastructure Investment and Jobs Act (IIJA) made funds available for use in developing and operating certain battery storage projects. GRU is pursuing a facility that will meet the application criteria for these grants and intends to apply for funding from the Department of Energy to partially finance this project. Novel projects that will improve the GRU’s candidacy for grant funding are preferred.

The Energy Authority (TEA) is acting as facilitator of the RFI. Responses are due July 15, 2022.

The RFI is available here.

Owned by the City of Gainesville, Fla., GRU provides electric, natural gas, water, wastewater, and communication utility services.

The American Public Power Association’s Public Power Energy Tracker is a resource for association members that summarizes public power energy storage projects that are currently online. The tracker is available here.

Public Power Officials Discuss Supply Chain Challenges At MMUA Event

June 21, 2022

by Paul Ciampoli
APPA News Director
June 21, 2022

Officials from Minnesota public power utilities, the American Public Power Association (APPA) and a power industry manufacturer recently discussed the power sector’s response to ongoing supply chain challenges facing the sector during a virtual roundtable held by the Minnesota Municipal Utilities Association (MMUA).

“What we’re facing right now truly is a perfect storm,” said Alex Hofmann, Vice President, Technical and Operations Services, at APPA.

He noted that when it comes to supply chain priorities, transformers are the highest-ranking priority for APPA’s members, “but there are many other concerns.”

APPA has been meeting with federal agencies to discuss supply chain issues, as well as with manufacturers.

“We’ve developed a simple voltage matching and sharing tool” through APPA’s eReliability Tracker. APPA is offering free access to the tracker for all public power utilities, he noted, because “to us, this is an emergency.”

Hofmann said that public power utilities, cooperatives and investor-owned utilities (IOUs) are all working together at the federal level.

“We plan to share, so if you reach out to your fellow public power utilities using this tool, you find that you’re not getting the response you need and we don’t have anything, we’re going to give that to the cooperatives and the IOUs and us their networks as well,” he said.

“Be creative. Pursue every measure you can. Your fellow utilities are in the same situation,” he said.

“I’m not here trying to bring you a doom and gloom story. I think that as infrastructure providers, we’re naturally very conservative, so we’re alarmed now that our stocks are getting low, but we still have stock and there are still people with units, it’s just those lead times are making our warehouses order larger amounts.”

Chad Backes, District Manager for Irby Utilities, a manufacturer for the electric utility sector, addressed the question of lead times in the context of supply chain issues.

“It depends upon the product line. It depends upon how much technology is involved and, of course,” how much copper and aluminum is involved, among other things.

“No manufacturer really has an ample supply of finished goods. They’re really struggling to get all their components,” Backes said.

He pointed out that “when one manufacturer goes down or isn’t taking any orders, that puts extra pressure on the other manufacturers that are still taking orders and they have to go out on the open market and buy the raw materials. Well, a lot of those purchases aren’t under contract and they’re having to pay spot prices.”

Backes also noted in core steel there is only one domestic manufacturer, AK Steel. “Everything else has to be imported and we’ve all seen pictures of the big container ships sitting in ports and nobody there to unload them or nobody there to load them.” All of the extra material “that’s being requested is driving that price up – just simply supply and demand.”

Backes also said that most of the core steel that needs to be used for transformers is also being used for batteries in electric vehicles and manufacturers are “making more money selling into the EV market than they are the transformers.”

Other participants in the roundtable included Mike Willetts, Director of Training & Safety at MMUA.