A large swath of the utility industry is facing a familiar fight with the federal government over the Trump administration’s proposed sell-off and privatization of federally owned utility companies such as the massive Tennessee Valley Authority.
The idea has spanned both Democratic and Republican administrations for three decades and is being rebooted by the Trump administration, said Sue Kelly, president and CEO of the American Public Power Association, representing 2,000 public utilities that provide energy to 49 million people across 49 states.
“It’s a bipartisan bad proposal,” Kelly told the Washington Examiner ahead of this week’s legislative rally her group is holding in Washington. Her members will carry that message to Capitol Hill during the first half of the week.
The idea doesn’t seem to ever die, she said. In the past, the idea of messing with the federal public utilities has forced her group and others to battle federal agencies to convince administrations that tinkering with the nation’s public utilities is a bad idea.
“It keeps coming up through different administrations,” she said. Former President Barack Obama, “for a couple of years, through his administration, proposed to sell TVA, and it took a couple of years for them to finally figure out that was really not a useful exercise,” Kelly said.
Former Energy Secretary Steven Chu, under Obama, issued a memo that proposed to turn the utilities into test beds of innovation for new clean energy technologies. That would have moved them far afield from their legally defined mandate and purpose, she said.
Before that, former President Bill Clinton had proposed selling them off. “They all open up the desk drawers and look at the proposals that their predecessors left behind, and say, ‘Well hey, this sounds good,'” Kelly quipped.
“We keep seeing this over and over again, but it’s frustrating to me because every new administration has to learn the lesson that, one, it’s a political third rail. And two, it doesn’t get them where they want to go.”
For example, TVA is not a typical line item on a budget, she said. It’s separate from the normal budget process, because customers pay it for electricity, while it floats its own bonds to generate revenue to fund its operations.
“Frankly, the fact that this has been raised will no doubt cause issues for their bonds,” she said. “I’m sure they have to be concerned about what their bond holders think about all this.”
The credit-rating giant Moody’s said soon after Trump proposed the selloff in his fiscal 2019 budget that doing so would harm the federal power authorities’ superb credit ratings.
The proposed sell off of TVA, the Bonneville Power Administration, and other top federally managed public power authorities is also a part of the president’s push on infrastructure, which is the core focus of this year’s APPA rally.
“Front and center for us is infrastructure,” said Desmarie Waterhouse, vice president of federal affairs and counsel for the group. She said they want to see a number of pieces of legislation from the last Congress rolled into a comprehensive infrastructure bill. For example, APPA will be urging for legislation to improve the licensing of hydropower dams in the bill, she said.
“We would like to see that rolled into an energy title of an infrastructure package,” Waterhouse said. “We’re also supportive of language to help facilitate the construction of interstate natural gas pipelines.”
The group supports Trump’s proposal of having one agency coordinate pipeline reviews, instead of the multiagency approach that has bogged down the process, she said. Other areas include grid modernization and reliability improvements that were included in a comprehensive energy bill that stalled in the last Congress.
Basically, these are “policies that help to get infrastructure built, get some burdensome regulations out of the way, not trying to eliminate environmental reviews or anything like that, but speed up the process so we can get these things done,” Waterhouse said.
APPA supports the Trump infrastructure proposal of making “one particular agency with primary responsibility and make the other agencies be responsive to them,” Kelly said.
“Right now, any agency can take as long as it wants to do whatever it wants, and you kind of get lost in bureaucratic land,” she added.
“We have several members that have been building new hydropower facilities,” Waterhouse added. “From start to finish, it’s about a 10-year process. That’s ridiculous. It shouldn’t take that long.”
But overlapping all of that, the public power sector will be on guard for any measures in the infrastructure bill that would seek to “facilitate the privatization of public power assets,” she said.
“Obviously, our members are locally owned and controlled. We work very well with the private sector in lots of public-private partnerships, but we are on the lookout for anything that’s either trying to promote the sale of our members’ assets or tries to privatize federal assets like the dams,” Waterhouse said.
President Trump’s budget proposal was problematic, and the association doesn’t want that idea to make it into any final infrastructure deal, which it expects to come out in the spring, she said.
Meanwhile, Monday is the final day to comment on the Environmental Protection Agency’s proposed replacement of the Clean Power Plan, which APPA actively opposed in federal appeals court because it said EPA overreached under the Clean Air Act.
Waterhouse said her members found the Obama-era climate regulations to be “problematic” under the law and wants the Trump administration to consider a new regulation that follows the limits of the law.
The group wants a replacement climate plan to put the onus on the states to decide “what is actually achievable,” she said. “We don’t believe EPA had the authority to tell a utility [with a power plant] you have to change the way you produce electricity.”
The EPA’s authority must be contained within the confines of regulating a power plant, so as to not include items such as renewable energy mandates that cannot be justified under the law, she said.
The group will be sending its comments on the Trump proposal Monday, as more than 500 members visit lawmakers through Wednesday. Some members will visit with members of the Federal Energy Regulatory Commission, but no meetings with the Trump administration are scheduled.
