COVID-19 Relief Packages Enacted, Discussions on Third Bill Fluid
Update provided by Meguire Whitney
Congress remains in session in order to address the ongoing COVID-19 pandemic. Two major bills have been enacted and Congress is in continued negotiations on a third aimed at economic stimulus. Not-for-profit utilities are seeking additional funds for the Low Income Home Energy Assistance Program (LIHEAP), priority access to vaccines and treatments for critical workers, and aid for the struggling municipal bond market.
On March 6, the president signed H.R. 6074, an $8.3 billion supplemental appropriations bill to address the coronavirus outbreak. The bill provides funds for federal agencies, such as the Food and Drug Administration, Centers for Disease Control, National Institutes of Health, and the State Department, to respond to the COVID-19 outbreak. The bill directs $950 million in CDC money toward grants to states, tribes, and political subdivisions to carry out surveillance, epidemiology, laboratory capacity, infection control, mitigation, communications, and other preparedness and response activities.
Families First Coronavirus Response Act
The supplemental bill was followed by a larger package signed into law on March 18: the Families First Coronavirus Response Act (H.R. 6201). In addition to free COVID-19 testing, funding for government programs, and food assistance, this bill includes new Family and Medical Leave Act and sick leave requirements for employers, including not-for-profit electric utilities. Organizations with fewer than 500 employees will be required to provide up to 12 weeks of job-protected leave (after the first 10 days of unpaid leave) to workers if they are unable to work or telework because they must care for a child who is home due to school or daycare closures. Additionally, employers must provide two weeks (80 hours) of paid sick leave for employees unable to work or telework due to quarantines or other situations related to the COVID-19 outbreak.
Additionally, the president has taken a number of actions to address the crisis. Travel to many parts of the world, including Europe, has been suspended. On March 18, the border with Canada was closed except for essential services. The president also invoked his authority under the Defense Production Act to order private companies to begin manufacturing supplies, such as ventilators and face masks, to respond to the crisis (however, the president did not issue any orders under it, saying that he would do so only as a last resort). Additionally, Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development announced that they would suspend foreclosures and evictions for 60 days. Likewise, the Department of Education announced that it would allow federal student loan borrowers to suspend payment for 60 days without penalty. The U.S. Treasury announced a delay in the filing deadline for taxes to July 15. Finally, the Federal Reserve has drastically cut interest rates and restarted the quantitative easing program used to jumpstart the economy during the Great Recession.
Specific to the electric sector, the North American Electric Reliability Corporation released industry guidance acknowledging that the effects of the coronavirus will be an acceptable basis for non-compliance with personnel certifications and periodic reliability standard requirements that would have been taken between March and July, and postponing onsite activities of Regional Entities.
Economic stimulus bill under development
A third stimulus bill is also currently in development. Senate Republicans released a framework on March 19 that would provide small business grants and loans; direct payments to individuals and families; targeted lending to key industries; and provisions aimed at removing barriers to health care. Discussions over the weekend broke down over Democrats’ concerns that the aid in the bill would flow primarily to corporations with few protections for workers. Procedural votes to advance the bill failed on Sunday and again today, March 23, although negotiations continue. Meanwhile, House Speaker Nancy Pelosi (D-Calif.) released an alternative proposal that includes supplemental appropriations for numerous agencies to respond to coronavirus, including $1.4 billion for LIHEAP. The House bill would also increase and extend unemployment benefits, forgive $10,000 in student debt for each borrower, place conditions on corporations that receive assistance during the crisis, and allow for universal elections by mail, among other things.
APPA and NRECA, among other trade groups, have weighed in with Congress noting how some top policy priorities could be helpful in managing the crisis. Many municipal utility CEOs have called on Congress to restore the tax exemption for advance refunding of municipal bonds and to permanently exempt the budget sequester from Build America Bonds. The utility trades developed a list of requests for a stimulus or response bill, including prioritized access to testing, treatments, vaccines, and personal protective equipment; utility worker exemptions from quarantine rules to access downed critical infrastructure and to offer mutual aid; liability protection if utility workers are asked to assist in disaster response or re-prioritize operations; relief from certain regulatory requirements; and a waiver of the Jones Act for liquefied natural gas shipments. On Monday, pressure increased to also enact provisions aimed at stabilizing the municipal bond market.
NWPPA is developing a set of requests for future legislation that addresses needs specific to Northwest utilities
FERC Proposes Revisions to Transmission Incentives Policy
Update provided by Meguire Whitney
On March 19, the Federal Energy Regulatory Commission announced a Notice of Proposed Rulemaking to make changes to its electric transmission incentives policy. The NOPR proposes changes that will increase the amount of basis points available to transmission projects, including increasing the RTO/ISO participation adder from 50 to 100 basis points, and awarding it irrespective of whether participation is voluntary. Among the proposed changes, the FERC action would increase incentives for a variety of actions for projects that demonstrate increased economic benefits on benefit-to-cost ratios, demonstrate increased significant reliability benefits, and for new technologies that “enhance reliability, efficiency, and capacity as well as improve the operation of new or existing transmission facilities.”
In a statement, FERC Chairman Neil Chatterjee said, “The NOPR proposes to depart from the Commission’s existing risks and challenges approach, and instead grant incentives to transmission projects based upon benefits to consumers: ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. This new approach . . . would provide the Commission with a clear framework to grant incentives for the most beneficial transmission projects.”
APPA and NRECA submitted comments in response to a Notice of Inquiry on transmission incentives last year, advocating against overly generous incentives that focus on project benefits and instead maintain the current framework based on a project’s risks and challenges. FERC has been criticized for “rubber-stamping” any incentives requested by a transmission developer. Comments on the NOPR will be due 90 days from publication in the Federal Register.
DOE Issues Final CEII Rule
Update provided by Meguire Whitney
On March 16, the Department of Energy published in the Federal Register a final rule that clarifies the processes by which the agency will designate information as critical electric infrastructure information (CEII), thereby shielding it from Freedom of Information Act requests. Section 215 of the Federal Power Act gives FERC and the DOE the authority to designate information as CEII; this includes information utilities routinely or intermittently provide to those agencies. Under the rule, a utility may request that certain information it provides be considered CEII, and the DOE will treat it as such until and unless the DOE makes a contrary determination. The DOE agreed with comments provided by APPA and NRECA not to disclose information whose CEII designation has lapsed before allowing the affected party time to request that the information should remain CEII. The rule takes effect on May 15, 2020.