Previous Featured Lawmakers
|
|
|
| 2008
Representative Peterson and Representative Walz
include important Rail Amendment in 2008 Farm Bill
Missouri River Energy Services (MRES) recognizes Representatives Collin Peterson (D-MN) and Tim Walz (D-MN) for successfully adding an amendment to the 2008 Farm Bill that represents a victory for captive shippers.
On May 14, both the United States House of Representatives and Senate approved the conference report for the 2008 Farm Bill – H.R. 2419, the Food, Conservation, and Energy Act of 2008 – and sent it on to the President.
The bill originated in the Agriculture Committee which Representative Peterson chairs.
Representative Walz, a member of the House Agriculture Committee, included language in the bill that requires the U.S. Department of Agriculture (USDA) to study the impact of rail service on rural America as it relates to agricultural inputs and commodities, ethanol and other renewable fuels, and coal. The USDA is also required to report back to Congress with recommendations for new federal policies to address any problems that the study identifies.
The railroads vigorously opposed this amendment and succeeded in stripping it from the Senate version of the bill. Thanks to Representatives Walz and Peterson, it was restored in conference.
Both Representatives Peterson and Walz are also co-sponsors of H.R. 1650 – the Railroad Antitrust Enforcement Act of 2007 and H.R. 2125 – the Railroad Competition and Service Improvement Act of 2007.
The rail issues are of the utmost importance to MRES and its members. We sincerely appreciate Representative Peterson’s and Representative Walz’s efforts and continued support.
Minnesota Attorney General writes op ed in favor of Railroad Antitrust Bill
Missouri River Energy Services (MRES) recognizes Minnesota State Attorney General Lori Swanson (DFL-MN) for authoring an outstanding op ed piece in favor of the Railroad Antitrust Enforcement Act of 2007 (S. 772/H.R. 1650). The piece ran in the Bemidji, MN Pioneer and is titled “Commentary: Time to put railroads under anti-trust.”
In the letter, Attorney General Swanson outlines a brief history of the nation’s regulated and, eventually, deregulated rail system. Excellent examples of “bottleneck” situations, “paper barrier” agreements, and captive rail customers are sited throughout the letter. The case for this legislation is stated in a concise, clear, and compelling manner.
Attorney General Swanson states, “A bill introduced in Congress - the Railroad Antitrust Enforcement Act - would remove the antitrust exemptions for the railroads, and hopefully begin a process where our nation’s railways will become more responsive to the needs of our economy.”
The antitrust bill, along with another bill – the Railroad Competition and Service Improvement Act – is co-sponsored by a number of Minnesota’s Congressional delegation.
MRES and its members sincerely thank Attorney General Swanson for her support on this issue.
Senator Klobuchar recognized for support on rail issues
Senator Amy Klobuchar (D-MN) recently spoke at a Schwan Speaker Series event in Marshall, Minn., a Missouri River Energy Services member community. During her talk, she discussed, among other things, energy and captive rail issues.
The Schwan Speaker Series is hosted by the Schwan Food Company in Marshall and the event drew a sizeable crowd.
Senator Klobuchar said that energy and climate change legislation will be top priority issues this year.
Her talk also included discussion of transportation matters. A strong supporter of relief for captive rail shippers, Senator Klobuchar is a co-sponsor of S.953, the Railroad Competition and Service Improvement Act of 2007, and she serves on the Senate Commerce, Science and Transportation Committee, the Senate committee of origin for the bill.
MRES offers its sincere thanks to Senator Klobuchar for her support on the rail issues facing MRES and other captive shippers. Her remarks in Marshall were further evidence of her thorough understanding and reasoned approach on rail and energy issues.
2007
North Dakota Governor and Congressional Delegation commended for their help following Northwood tornado
Four North Dakota public officials, Governor John Hoeven, Senator Byron Dorgan, Senator Kent Conrad, and Representative Earl Pomeroy have been working together for the past several weeks to ensure that Northwood, N.D., gets the assistance it needs to rebuild following a devastating tornado Aug. 26 that left the town in ruins. The tornado killed one person, injured several others, and damaged or destroyed virtually every structure in the community. For their efforts, Governor Hoeven, Senators Dorgan and Conrad, and Representative Pomeroy are our Featured Lawmakers.
All four have visited the community several times since the tornado, according to Northwood City Administrator Marcy Douglas. “They have pushed hard for an individual assistance declaration,” Douglas said. This declaration is bringing money, through the Federal Emergency Management Administration (FEMA) and through the state government to citizens who need it to rebuild their homes. It also is helping with economic development efforts.
“These four officials presented a united front, without regard to political affiliations, to bring federal and state dollars that will help rebuild the community,” Douglas said. Governor Hoeven is a Republican, while Senators Dorgan and Conrad and Representative Pomeroy are all Democrats. However, all four signed onto documents calling for emergency relief.
While Northwood has a long way to go in the rebuilding process, the quick action and continuing follow-up by our four Featured Lawmakers are helping Northwood to get the job done.
Representative Walz includes
important Rail Amendment in Farm Bill
Missouri River Energy Services recognizes Representative Tim Walz (D-MN) for successfully adding an amendment to the 2007 Farm Bill that represents a victory for captive shippers. The rail industry vigorously opposed the amendment and we applaud Representative Walz for his hard work and leadership on this issue.
Walz, a member of the House Agriculture Committee, included language in the bill that requires the USDA to study the impact of rail service on rural America as it relates to agricultural inputs and commodities, ethanol and other renewable fuels, and coal. The USDA is also required to report back to Congress with recommendations for new federal policies to address any problems that the study identifies.
Representative Walz is also a co-sponsor of H.R. 1650 – the Railroad Antitrust Enforcement Act of 2007 and H.R. 2125 – the Railroad Competition and Service Improvement Act of 2007.
The rail issues are of the utmost importance to MRES and its members. We sincerely appreciate Representative Walz’s efforts and continued support.
Senator Dorgan's amendments on rail
included in Transportation Appropriations Bill
Missouri River Energy Services (MRES) recognizes Senator Byron Dorgan (D-ND) for a number of actions of importance to MRES members.
Senator Dorgan successfully added two pertinent amendments to the Transportation Appropriations Bill regarding the rail issue.
One of the amendments included capping the filing fee for rate cases at the Surface Transportation Board (STB) at $350. This is the same level of filing fees in federal district courts. The filing fee is presently set at $178,200. By law, rail customers cannot challenge rail rates in the federal district courts, only at the STB. The exorbitant fees are one more sign of the disregard the STB shows to shipper interests.
The other, and more significant, amendment calls for the inspector general of the Department of Transportation to conduct a 90-day investigation of railroad service disruptions and timely delivery problems with the railroads. The inspector general is to file his report, with legislative and regulatory recommendations, with the Senate and House Transportation Committees, the House Appropriations Committee, and the Senate Commerce Committee.
Senator Dorgan is a strong supporter and leader regarding the rail issues we have experienced and continue to experience.
Senator Dorgan again prevents agency rate attack on PMAs and watches over WAPA’s construction budget
As reported in a previous Featured Lawmaker segment, Senator Dorgan, as Chairman of the Senate Energy & Water Development Appropriations Committee, included a provision in the fiscal year 2007 funding resolution that prevented implementation of the agency rate program. The Senator also vowed to stop implementation of the agency rate program for fiscal year 2008.
The agency rate program would require the Western Area Power Administration (WAPA) and the other federal power marketing administrations (PMAs) to pay higher interest rates on future capital investments. While this would not have a financial impact on WAPA’s Upper Great Plains customers, which include MRES members, it would set a bad precedent by allowing for administrative changes in WAPA's repayment program. The Office of Management and Budget (OMB) claimed that it did not need, nor did it want, congressional review or approval for this change. If OMB could increase interest rates without congressional approval, PMA customers and Congress feared OMB would seek to implement more costly programs in the future.
Senator Dorgan again has included language in the Senate Energy and Water Development Appropriations bill for fiscal year 2008 to prevent implementation of the agency rate proposal and was critical of the Administration for its annual use of “budget gimmicks” to increase the rates of federal power customers.
Senator Dorgan also restored $30 million to the WAPA construction budget by ($50 million was cut by OMB) and included report language noting the continued reduction in WAPA’s construction budget and limits on use of customer-advanced funding. The Committee expresses concern that if this continues, reliability of the transmission system may be impaired.
MRES and its members applaud and sincerely thank Senator Dorgan for his unwavering diligence and continued support for public power and its issues.
Senator Prettner Solon leads the way toward balanced energy bill in Minnesota
Missouri River Energy Services recognizes Senator Yvonne Prettner Solon for her leadership on the Minnesota Next Generation Energy Act, SF 145. Under the climate change section of this legislation (Article 5), the state of Minnesota has set a goal of reducing statewide greenhouse gas emissions to a level 15 percent below 2005 levels by 2015, at least 30 percent by 2025, and at least 80 percent by 2050. The legislation requires that the Department of Commerce and several state agencies work in conjunction with industry, utility and environmental stakeholder groups to review and develop policies to meet the greenhouse gas reduction goals.
Initially, proposed climate change legislation sought to put a moratorium on the construction of any new fossil-fuel electric generation plants, particularly coal-fired, as well as ban the importation of electricity from such plants into Minnesota from other states. This would have jeopardized the planned Big Stone II power plant which is being planned to serve MRES member cities in Minnesota and neighboring states, resulting in an increase in the cost of meeting the electric needs of customers, potential shortages of available generation at peak times and reduced reliability of the transmission grid.
Senator Prettner Solon took the lead by introducing an alternative bill, SF 145, which sought to balance environmental concerns with the need to reliably meet the growing power demands of consumers. Although the House passed a different version of the bill, Senator Prettner Solon kept the conference committee focused on the need for a practical approach to the issue. As a result, the final bill allows a stakeholders group and the state legislature to first analyze the situation across all economic sectors, as well as weigh the feasibility of various greenhouse gas reduction options prior to making decisions that would halt development of electric generation needed to support the growing economy of the state of Minnesota and the region.
This would not have been accomplished without the Senator’s leadership and commitment.
Senator Thune Introduces Legislation to Increase Clean Renewable Energy Bond Funding
Missouri River Energy Services recognizes Senator John Thune (R-S.D.) for recently introducing The Wind Energy Development Act of 2007.
Under this legislation, the amount of Clean Renewable Energy Bonds (CREBs) would increase to $2.25 billion. This is up from $800 million previously allocated.
CREBs deliver an incentive for public power that is comparable to the Production Tax Credit that is available to private developers and investor-owned utilities. A CREB is a special type of bond, known as a “tax credit bond,” that offers municipals and cooperatives the equivalent of an interest-free loan for financing qualified energy projects for a limited term.
In addition to increasing the amount of bonds that are available for the expanded clean energy projects, a portion of the bond funding would be set aside for public power entities similar to the set-asides dedicated to rural electric cooperatives in the original legislation.
MRES has applied for the CREBs in the past and would be a strong supporter of the program with the modifications proposed by Senator Thune. We thank Senator Thune for introducing this important legislation.
Senator Harkin backs railroad antitrust legislation
Missouri River Energy Services (MRES) recognizes Senator Tom Harkin (D-IA) for cosponsoring “S. 772 - Railroad Antitrust Enforcement Act of 2007” along with Senators Norm Coleman (R-MN), Herb Kohl (D-WI), and others. While Senator Harkin has previously supported the efforts of MRES to receive fair and timely rate relief from the Surface Transportation Board (STB), this is the first time he has cosponsored legislation to provide captive shippers with meaningful opportunities to seek rate relief and redress anticompetitive behavior.
This legislation will repeal the obsolete antitrust exemptions protecting freight railroads from competition. These exemptions deny rail consumers the protections available to consumers in virtually every other industry.
MRES and the other owners of the Laramie River Station (LRS) are among the many rail customers across the U.S. who have been hit with dramatic increases in rail delivery charges and unreliable service in recent years.
Annual increased costs at LRS due to rail shipping amount to $8 million per year to MRES alone and have caused MRES to increase its wholesale electric rates to its members by 8 percent for 2007.
MRES strongly supports antitrust legislation, as well as legislation that would reform the STB, which is responsible for overseeing the actions of the railroads, along with hearing and ruling on cases concerning the railroad system. MRES, along with all the owners of the LRS, filed a case with the STB more than two years ago stemming from the LRS coal delivery and rail rate situation. That case is still pending.
MRES applauds Senator Harkin for his support of legislation extremely important to the MRES members and their electric consumers and for his continuing support for fair treatment of rail customers.
Senator Coleman Cosponsors Railroad Antitrust Bill
Missouri River Energy Services (MRES) recognizes Senator Norm Coleman (R-MN) for introducing “S. 772 - Railroad Antitrust Enforcement Act of 2007” along with Senator Herb Kohl (D-WI).
This legislation will repeal the obsolete antitrust exemptions protecting freight railroads from competition. These exemptions deny rail consumers the protections available to consumers in virtually every other industry.
MRES and the other owners of the Laramie River Station (LRS) are among the many rail customers across the U.S. who have seen dramatic increases in rail delivery charges and unreliable service in recent years.
LRS is a coal-fired power plant located in eastern Wyoming. It is jointly owned by six consumer-owned electric utilities. The LRS project is a captive shipper, meaning that there is only one railroad – BNSF Railway Company – available to serve its coal transportation needs. When the project’s long-term coal delivery contract with BNSF expired in September 2004, LRS participants suddenly were faced with a doubling of the BNSF rate for coal delivery. Annual increased costs due to rail shipping amount to $8 million per year to MRES alone and have caused MRES to increase its wholesale electric rates to its members by 8 percent for 2007. In addition, deliveries became sporadic, which diminished the coal supply on hand at the plant and, at one point, placed the plant on the brink of curtailing operations.
MRES strongly supports antitrust legislation, as well as legislation that would reform the U.S. Surface Transportation Board (STB). The STB is responsible for overseeing the actions of the railroads, along with hearing and ruling on cases concerning the railroad system. MRES, along with all the owners of the LRS, presently have a case pending before the STB stemming from the LRS coal delivery and rail rate situation.
“Our nation’s utilities, who rely on the railroad to transport coal for electricity generation, are all too often subject to exorbitant fees and unreliable service, causing drastically higher energy costs for consumers,” said Coleman. “Similarly, our farmers and timber producers who depend on rail for the shipment of their products often shoulder the financial burden with no recourse, due to the antitrust exemptions on the books. By eliminating railroad antitrust laws, we can give those who suffer from anti-competitive practices a tool to fight to back.”
MRES is an organization of 60 communities in the states of Iowa, Minnesota, North Dakota, and South Dakota. Each of these member communities owns and operates a municipal electric utility. MRES applauds Senator Coleman for introducing legislation extremely important to the MRES members and their electric consumers.
Senator Dorgan's efforts prevent unwarranted attack on PMAs
MRES recognizes Senator Byron Dorgan (D-ND) for once again defending the federal power program from unwarranted attack. Last year, the Office of Management and Budget (OMB) included a program called Agency Rate in the President's Fiscal Year 2007 Budget. This program would require the Western Area Power Administration (Western) and the other federal power marketing administrations (PMA) to pay higher interest rates on future capital investments. While this program would not have a financial impact on Western’s Upper Great Plains customers, which include MRES members, it would have set a bad precedent by allowing for administrative changes in Western's repayment program. OMB claimed that it did not need, nor did it want, congressional review or approval for this change. If OMB could increase interest rates without congressional approval, PMA customers and Congress feared OMB would seek to implement more costly programs in the future.
In his new role as Chairman of the Senate Energy & Water Development Appropriations Committee, Senator Dorgan included a provision in the Fiscal Year 2007 funding resolution that prevented implementation of the Agency Rate program. The Senator also vowed to stop implementation of the Agency Rate program for Fiscal Year 2008. He stated that he supports the federal power program and cited the benefits of low-cost federal power to his constituents.
Senator Dorgan has long been a champion for the federal power program, and MRES and its members appreciate his continued support.
2006
Governor Rounds makes Watertown “Capital for a Day”
South Dakota Governor M. Michael “Mike” Rounds led a team of state officials to the City of Watertown September 20 to talk with citizens and local leaders and to get their input on how to improve state government.
The occasion was the governor’s most recent “Capital for a Day” event, a program that brings the governor and his cabinet to communities throughout the state to discuss state and local issues.
“Capital for a Day brings government to the people,” said Gov. Rounds. “Those who are unable to travel to Pierre on a regular basis have an opportunity to discuss their issues with representatives from the different departments in state government. It also gives state leaders a chance to learn more about activities in the regions. I’m looking forward to visiting the Watertown community and learning about topics important in the region.”
Members of the Missouri River Energy Services (MRES) staff attended the event and MRES sponsored a luncheon.
Watertown, an MRES member, is the 22nd Capital for a Day in South Dakota. Other MRES member communities that have been named Capital for a Day are Brookings, Faith, and Vermillion.
State attorneys general from Iowa, Minnesota, North Dakota,
and South Dakota sign on to Railroad Antitrust Letter
Missouri River Energy Services (MRES) is pleased to recognize Attorneys General Tom Miller (IA), Mike Hatch (MN), Wayne Stenehjem (ND), and Larry Long (SD) for joining with several other state attorneys general in co-signing a letter encouraging Congress to remove current railroad antitrust exemptions and to subject the nation’s major railroads to laws that promote competition.
The Aug. 17, 2006 letter was sent to the chair and ranking members of the Judiciary Committee of both the United States Senate and House of Representatives.
In summary, the attorneys general letter said the railroads’ exemption to the antitrust laws should be taken away because freight rail service has deteriorated since the rail industry was regulated 26 years ago.
MRES is a co-owner of the Laramie River Station (LRS), a coal-fired power plant near Wheatland, Wyoming. The owners of the LRS have experienced a doubling of rail delivery rates and sporadic reliability on the delivery of coal since a long-term contract with Burlington Northern and Santa Fe Railway expired in late 2004.
This issue not only affects those in the coal industry, but also any industry that has limited rail access such as concrete, chemical, lumber, and agriculture products, as well as many others.
This issue is a top priority for MRES and its members, and the leadership shown by the four attorneys general is of significant importance. MRES greatly appreciates their effort in lending their voices to encourage congressional action on this matter.
South Dakota Governor Michael Rounds addresses MRES Annual Meeting
Missouri River Energy Services (MRES) and its members were honored to have South Dakota Governor Michael Rounds address its annual meeting on April 26th.
Governor Rounds, a strong supporter of the Big Stone II Project, opened the annual meeting events as the keynote speaker.
When introducing the Governor, Don Johnston, MRES Board of Directors 1st Vice Chairman from Flandreau, SD, stated, “Governor Rounds has been the single most visible and supportive state official of the Big Stone II project in which MRES is the single largest participant.”
“Energy development is economic development – the two cannot exist alone,” Governor Rounds said. “The goal for 2010 is that South Dakota becomes a net energy export state.”
The Governor reviewed the numerous bills that the State of South Dakota has enacted in recent years regarding energy development and incentives. He thanked MRES and its members for “your foresight and knowledge of technology” regarding the Big Stone II project and said, “Big Stone II looks to the future and sees opportunity, not just challenges.”
He also expressed his appreciation to the people of our industry for what they did to help get the power back on for people in South Dakota who lost electric service during a severe ice storm in November 2005.
In closing, Governor Rounds said, “We want energy production; we’re hungry for more energy production in our state and we’re looking forward to a very, very bright future.”
Representatives from two Member Communities appointed to the APPA Policy Makers Council
Missouri River Energy Services (MRES) is proud to announce that two of its member communities are represented on the American Public Power Association’s (APPA) Policy Makers Council.
Dale Christensen, utility board member from Watertown, S.D., was recently appointed to the Policy Makers Council. Christensen has been on the Watertown Utility Board since 1999 and has served as President of that Board.
Dennis Walstra, mayor of Sioux Center, IA, was appointed to his first term on the Council in 2003 and has recently been reappointed to a second term. Walstra served two years as a council member and has been mayor since 2004.
The Policy Makers Council’s mission is to assist APPA in promoting legislation of importance to its members, opposing harmful legislation, and providing advice on others issues of importance to the organization. The Council is comprised of 40 members who serve on utility boards or are elected officials in public power communities. The terms are three years in length, and Council members may be reappointed to a second term for a maximum consecutive service of six years. Members also are expected to participate in the Council’s two annual meetings.
Appointments such as these require additional commitment from individuals who are already dedicated to providing their time and services for their communities. MRES, APPA, and Public Power congratulate and sincerely thank Dale and Dennis for their continued loyalty and commitment to the public power industry.
|
|
2005
Rep. Herseth’s actions help stop plan to make
hydropower users pay for undeveloped irrigation
Missouri River Energy Services (MRES) recognizes Rep. Stephanie Herseth (D-SD), a member of the House Committee on Resources, for joining with other key Pick-Sloan representatives in engaging Chairman Richard Pombo directly and successfully on the Bush Administration’s plan to require hydropower customers to pay for undeveloped irrigation.
The Administration’s FY 2005 budget proposed redistributing the repayment costs of dams and power plants within Pick-Sloan to the power customers in the multi-state area in which they serve. The proposal stated “approximately $500 million of unpaid construction and operation costs could be recovered from power customers who benefit from the finished facilities.”
Rep. Herseth pointed out that according to a 1997 Department of the Interior report, redistributing these costs could lead to an almost 20 percent power rate increase in the Pick-Sloan region.
The House Resources Committee has decided not to consider the Administration's plan.
Although not a member of the Committee, Rep. Steve King (R-IA) also engaged in discussions with Chairman Pombo on this important topic. This is an important victory and reflective of the combined efforts of National Rural Electric Cooperative Association, American Public Power Association, Midwest Electric Consumers Association, and MRES.
Earlier this year, Rep. Herseth co-authored a letter to Chairman Pombo urging the Committee to reject this proposal. Reps. King (R-IA), Earl Pomeroy (D-ND), Collin Peterson (D-MN), and Mark Kennedy (R-MN) also signed onto the letter.
Senator Johnson leads effort to amend energy bill
to ease burden on public power and RECs
Missouri River Energy Services (MRES) recognizes Senator Tim Johnson (D-SD), a member of the energy bill conference committee, for leading a last minute amendment during energy bill negotiations deleting language that would have placed an unnecessary burden on public power systems and rural electric cooperatives.
Section 1807 (“Reliability and Consumer Protection Assessment”) had been included in the conference committee’s base text. The provision would have required a study by the Federal Energy Regulatory Commission (FERC) every five years in perpetuity to determine whether or not the non-jurisdictional status of public power systems and rural electric cooperatives hinders competitive markets, reliability, and other factors. If FERC determined that these were hindrances, it would then make recommendations to Congress about how to resolve the problems.
FERC already has authority to perform such a study if deemed necessary, but this provision would have mandated such a study be performed every five years placing enormous additional regulatory burdens on all public power and rural electric cooperative utilities.
Senator Johnson’s amendment to strip out the gratuitous FERC study was adopted. This last minute successful effort by Senator Johnson is sincerely appreciated by MRES and its members.
Rep. Pomeroy co-sponsors bill that would help
consumer-owned utilities build renewable generation
Missouri River Energy Services (MRES) is pleased to recognize Rep. Earl Pomeroy (D-ND) for co-sponsoring H.R. 2794, the Clean Energy Bond Act of 2005. The legislation is co-sponsored by Rep. Ron Lewis (R-KY).
The bill would allow public power systems and electric cooperatives to use interest-free bonds to build renewable generation facilities. The Clean Energy Bond would allow consumer-owned utilities to finally receive equitable tax incentives to those currently received by investor-owned utilities under Section 45 of the U.S. Tax Code.
H.R. 2794 is the companion bill to S. 962 introduced by Senators Charles Grassley (R-IA) and Max Baucus (D-MT), that is included in the tax package of the Senate version of the energy bill. Senator Grassley has previously been recognized by MRES for his sponsorship of S. 962. Although the House had already passed its version of a comprehensive energy bill prior to the introduction of H.R. 2794, this shows growing congressional support to provide comparable incentives to public power systems.
Thirty-six representatives, including MRES Reps. Stephanie Herseth (D-SD) and Collin Peterson (D-MN), also have signed on as co-sponsors.
Reps. Pomeroy and Lewis were joined by Reps. Jim Ramstad (R-MN), Bob Beauprez (R-CO), and Jerry Weller (R-IL) in introducing H.R. 2794. All five are members of the House Ways and Means Committee.
Senator Grassley recognized by APPA Legislative Rally
Public power recognized Sen. Grassley in February at the American Public Power Association (APPA) Legislative Rally by awarding him with the APPA Public Service Award. The award recognizes a publicly elected or appointed official at the national or state level whose activities have furthered the objectives of public power. In particular, Sen. Grassley was recognized for his hard work to develop a financing mechanism for public power to participate in the development of renewables.
Along with the above-mentioned recognition, Missouri River Energy Services also acknowledges Sen. Charles Grassley (R-IA), chairman of the Senate Finance Committee, for introducing S. 962, the Clean Energy Bond Act of 2005. The bill would allow public power systems and electric cooperatives to use interest-free bonds to build renewable generation facilities.
Under the bill, consumer-owned utilities would be able to receive comparable tax incentives to those currently received by investor-owned utilities under Section 45 of the U.S. Tax Code. Sen. Max Baucus (D-MT), ranking member of the Senate Finance Committee, joined Sen. Grassley in introducing the legislation. Chairman Grassley’s bond provision for public power systems has been included in the tax package that will be part of the comprehensive energy bill that emerges from the Senate.
APPA pressed hard for S. 962 in lieu of a tradable tax credit, which had been considered in previous Congresses. The tradable tax credit failed due to opposition in the House. It is hoped that the bond provision will fair better.
Sens. Grassley and Baucus were joined by co-sponsors Sens. Jeff Bingaman (D-NM), Jim Bunning (R-KY), Norm Coleman (R-MN), Kent Conrad (D-ND), Chuck Hagel (R-NE), Tim Johnson (D-SD), and Ben Nelson (D-NE). Sens. Bingaman, Bunning, Conrad, and Johnson all are members of the Senate Finance Committee as well.
Rep. Oberstar Introduces Critical Captive Rail Legislation
Missouri River Energy Services (MRES) is proud to recognize Rep. James L. Oberstar (D-MN), the ranking minority member of the House Transportation and Infrastructure Committee, for co-authoring and co-sponsoring the bipartisan Railroad Competition Improvement and Reauthorization Act of 2005. The legislation is co-authored by Rep. Richard Baker (R-LA), another key member of the Transportation committee. The bill is known as the “captive rail” legislation, and was introduced on May 4.
MRES and its members strongly support the bill, which would promote rail competition by taking action to reduce or remove artificial impediments to competition that adversely affect rail customers. It also would direct the Surface Transportation Board (STB), which regulates the railroads, to establish a new regulatory process and designate “areas of inadequate rail competition.” The bill highlights rail service problems by eliminating fees for filing rate cases, improving the rate reasonableness standard, and creating a new Office of Rail Customer Advocacy. Finally, the bill requires the STB to consider the effects of mergers.
This issue is not new to Rep. Oberstar, who has been a long-time advocate for railroad customers – which often pits him against the STB. In his remarks upon introduction of the bill, Mr. Oberstar observed that the STB “has been too concerned about the financial health of the railroads and not concerned enough with the financial health of the railroads’ customers.” He has introduced similar legislation in each of the last three Congresses, but this time is optimistic because he has joined forces with Rep. Baker.
The bill is critical to MRES and its share of the Laramie River Station coal plant in Wheatland, WY. LRS is served by a single railroad, BNSF Railway Company, which delivers coal from the Wyoming Powder River Basin about 175 miles from the plant. When MRES contracts expired last fall BNSF unilaterally doubled the shipping rates for MRES.
The bill has several co-sponsors and is supported by both public and private power.
Mr. Oberstar represents MRES member, Wadena, Minnesota. He is currently serving his 16th term in the U.S. House of Representatives, making him the longest-serving House Member in Minnesota history.
South Dakota PUC speaks out in opposition
to arbitrary federal PMA electric rate increases
Members of the South Dakota Public Utilities Commission (PUC) are taking a lead role among state regulators in expressing opposition to the Bush Administration's new proposal to sell electric power from the federal power marketing administrations (PMAs) based on market rates rather than on the cost of production.
The Administration’s 2006 federal budget proposal would increase PMA rates by 20 percent each year until they reach so-called market prices. The proposal would have a major impact on the electricity rates of thousands of people in the region, including the customers of MRES member utilities. MRES members, on average, purchase about half of their wholesale electrical energy from the Western Area Power Administration (WAPA), the PMA that markets power in 15 states in the western portion of the country. In this region, WAPA markets power produced at hydroelectric facilities along the Missouri River.
Neither the U.S. House nor Senate Budget Committee supported the market rate proposal in their 2006 budget markups, although it could resurface in other committees, particularly in the House.
The South Dakota PUC and electric association representatives estimate that a change to market rates would cost South Dakota ratepayers more than $140 million in the first five years of implementation, and more than $55 million each following year.
The South Dakota PUC commissioners spoke out about the proposal March 2. Chairman Gary Hanson said, “Some have made the argument that PMA electricity rates are artificially low and are subsidized by the nation's taxpayers. That claim is totally inaccurate. PMA rates are set to recover the full costs of electricity service, including repayment of the Treasury debt at market rates.”
“This huge rate increase not only will hurt residential customers, but also could have a chilling effect on rural economic development,” Vice Chairman Bob Sahr said. “We're working with other commissioners and members of Congress to stop this proposal.” They also are urging the Bush Administration to reconsider its position.
“Such an increase in electricity costs would impose an economic hardship on the people of this state, thousands of whom are least able to afford such a dramatic rise in their utility bills,” said the third member of the South Dakota Commission, Dusty Johnson. Johnson also serves as chairman of the National PMA Working Group, that includes 50 public utility commissioners from 17 states, including North Dakota and Wyoming, as well as industry representatives from electrical organizations throughout the country that are unified in opposing this proposal.
Sen. Johnson is a leading opponent of planthat would raise PMA rates to market levels
Missouri River Energy Services (MRES) recognizes Sen. Tim Johnson (D-SD), who serves on the Senate Budget Committee, for co-authoring a bipartisan Senate letter regarding concerns about the Administration’s proposal to require the Power Marketing Administrations (PMAs) to sell power at market-based rates. It is co-authored with Sen. Gordon Smith (R-OR).
The letter urges Senate Budget Committee Chairman Judd Gregg (R-NH) and Ranking Committee Member Kent Conrad (D-ND) to reject the Administration’s proposal in the FY 2006 Budget Resolution.
MRES members purchase an average of about half of their wholesale power from the Western Area Power Administration (WAPA). MRES estimates it would take four years for WAPA’s rates to reach a hypothetical market rate of four cents per kWh. During those four years, the increased cost to MRES members is estimated to be almost $87 million.
Twenty-four senators and others have expressed their opposition to the unfair rate increases. Such action on the hydro rates would have a major impact on the cost of electricity to every customer of every MRES member community. Our thanks to Sen. Johnson for his leadership on this issue and to the other senators representing MRES member communities for their opposition to this proposal.
A strong contingent of House and Senate Budget Committee members from both parties have voiced opposition to the proposal. The Johnson-Smith letter has played a significant role in helping to foster that opposition.
Gov. Rounds’ support leads to quick action on energy investment incentives
Two bills intended to create investment incentives for energy plants to locate in South Dakota sailed through the South Dakota House State Affairs Committee with unanimous do-pass recommendations Wednesday, Feb. 9. The actions came after the Committee heard from Gov. M. Michael Rounds, at whose request the bills were introduced.
As the Legislature opened its 2005 session, the participants of the Big Stone 2 feasibility study, including MRES, were focused on finding ways to meet the growing energy needs in the region in a cost-effective manner for ratepayers. Big Stone 2 project participants are studying the feasibility of building a 600-megawatt coal-fired power plant at the site of the current Big Stone Plant near Milbank, S.D. Participants in the study, in addition to MRES, are Central Minnesota Municipal Power Agency, Great River Energy, Heartland Consumers Power District, Hutchinson Utilities Commission, MDU Resources Group, Otter Tail Power Co., and Southern Minnesota Municipal Power Agency.
Gov. Rounds introduced three separate bills aimed at addressing the reliability of South Dakota’s power supply, providing incentives for base-load generation in South Dakota, and attracting new businesses to the state.
Two of the bills, House Bill (HB) 1261 and HB 1262, would provide incentives for base-load electric generation facilities by making South Dakota taxes competitive with those in surrounding states. Under current tax laws, the proposed Big Stone 2 project would pay approximately $6.9 million per year in property taxes, and $45 million in sales, use, and contractor’s excise taxes during construction. HB 1261 puts into place a graduated refund mechanism for new business facilities with project costs of more than $10 million, including base-load generation plants of 500 MW or more. To minimize the state’s risk, the bill also includes financial penalties for failure to complete the project. HB 1262 exempts property taxes over a certain assessed value, and phases in those property taxes during construction.
The Committee quickly sent HB1261 and HB1262 on to the full House, which voted to pass HB 1262 on February 10. Once both bills pass the House, they will then go to the Senate State Affairs Committee.
If passed, the two bills will mean the proposed Big Stone 2 project would pay approximately $4.7 million per year in property taxes and $11 million in sales and excise taxes during construction. This is comparable to the taxation levels in surrounding states.
The third bill, HB 1260, would establish a South Dakota Transmission Authority. The Transmission Authority would have a five-member board that would contact transmission owners and users in order to study transmission issues. The board would evaluate state and federal laws and rulemaking, as well as regional transmission needs and constraints. The Transmission Authority would report its findings and recommendations to the governor, the state legislature, and the congressional delegation. Action on HB 1260 was deferred until Feb. 11.
These three bills are a step forward in meeting South Dakota’s – and the region’s – current and future energy needs. By making large generation facilities economically viable, Gov. Rounds has created an incentive to meet the generation needs of the region with state-of-the-art, environmentally responsible, highly efficient power.
South Dakota lawmakers tour Big Stone Power Plant
Several members of the South Dakota Legislature toured the Big Stone Power Plant near Milbank, S.D., December 13. The tour was hosted by the plant’s majority owner -- Otter Tail Power Company. MRES was represented on the tour by Legislative Associate Deb Birgen.
Otter Tail, MRES, and other regional utilities are studying the addition of a second coal-fired unit of approximately 600-megawatts at the Big Stone site. The partners hope to make a decision about the possible addition in the spring of 2005. Construction of a plant of this size and its potential impact on the state requires that legislators and regulators are informed about the project.
|
|
|
|
