Public power gets help

The U.S. House of Representatives is proposing to send help to the publicly owned power sector via legislation that allows the Federal Energy Regulatory Commission to keep power plants slated for retirement up and running.

"Reliability is a top priority for public power utilities around the country," said Scott Corwin, president & CEO of the American Public Power Association.

"The Reliable Power Act ensures public power can comply with federal rules and regulations without sacrificing the reliable electricity that powers our homes, businesses, and communities."

Publicly owned power companies and rural electric co-ops combined produce about 30% of the nation's electricity and routinely rely on bond financing for infrastructure projects.

FERC is an independent agency operating within the Department of Energy and is governed by five commissioners nominated by the President and confirmed by the Senate.

The bill passed by twenty votes with Democrats claiming the DOE already has the authority needed to keep plants open and the new legislation sidelines the Environmental Protection Agency.

"The Reliable Power Act would provide assurance that EPA rules do not undermine grid reliability or resource adequacy," said Michelle Bloodworth, president and CEO of America's Power.

The Trump administration has a record of supporting the fossil fuel industry, while the prior Biden administration leaned into renewables.

"This measure will encourage state regulators to push our grid to more expensive, polluting sources of energy," said Rep. Kevin Mullin, D- Calif.

The power industry has consistently voiced concerns about base load capacity and reliability as older, coal-fired power plants are being retired and replaced by natural gas plants, which are cheaper to operate.

About 16% of the country's energy comes from coal-fired power plants. In the late 1990's it accounted for over 50%.

"Under the Biden administration, regulators like the EPA prioritized rules that would have caused the premature retirement of the nation's coal fleet during the same time period when electricity load growth is exploding because of artificial intelligence, data centers, advanced manufacturing, and electrification of the economy," said America's Power.

The House also passed the SPEED Act which takes a swing at reducing permitting red tape tying up the National Environmental Policy Act process. SPEED passed 221-196 with bipartisan support.

"APPA strongly supports the SPEED Act to narrow the scope of environmental reviews and enable public power utilities to build and maintain infrastructure that ensures reliable, affordable electric service.

"It establishes judicial review timelines and requirements to prevent frivolous lawsuits that can lengthen the permitting process by years," said APPA.

Earlier this month, S&P Global Ratings tagged the public power and electrical co-op sector with a negative outlook.

The view "reflects substantial and costly infrastructure financing needs and diminished consumer rate affordability that can erode the benefits of autonomous ratemaking authority, frustrate some utilities' cost recovery, and weaken financial margins and ratings."

"Not-for-profit utilities' operating and capital costs are swelling as they address load growth, strengthen the climate resilience of network infrastructure, replace aging power plants, and reduce power plants' emissions and generation byproducts," said S&P Global Ratings credit analyst David Bodek.

In October, Sen. Tom Cotton R-Ark. introduced a companion bill in the Senate. It would need to win Senate passage and be signed into law to take effect.