HomeMy WebLinkAboutF-4 Federal Legislative Update by Morgan Meguire LLC Information Item F-4 *011
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AZUSA
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INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW,DIRECTOR OF UTILITIES
DATE: NOVEMBER 23,2015
SUBJECT: FEDERAL LEGISLATIVE UPDATE BY MORGAN MEGUIRE LLC
Attached is Morgan Meguire's LLC's federal legislative update which is provided periodically to
Southern California Public Power Authority(SCPPA)members.
The November report addresses the following topics:
1. Congressional Overview
- Rep. Paul Ryan was elected Speaker of the House.
- Rep. John Boehner left position as Speaker of the House and Congress
- Overall budget caps and debt limit lifted with a $82M budget deal that
increases spending caps for the next two years and raises that debt limits
until March 2017
2. Cyber and Grid Security
- Senate passed S. 754 (Feinstein), the "Cybersecurity Information Sharing
Act (CISA). This is legislation that has been top priority for SCPPA. Next
step is to reconcile it with HR 1560"Protecting Cyber Network Act".
- Nuclear Regulatory Commission (NRC) issues rule requiring nuclear plants
to report cyber-attacks within 8 hours of discovering attempted intrusion.
3. Energy Policy
- Housed passed long-term transportation and authorization bill with
amendments that include five energy-related provisions that are of interest
to SCPPA members.
- The next focus of Department of Energy's upcoming quadrennial energy
review will be focused on energy infrastructure, including rail, pipelines,
and transmission.
4. Environmental Policy
- The Environmental Protection Agency (EPA) published a suite of rules on
their Clean Power Plant (CPP) rule which most likely gets challenged by as
many as 26 states. A disapproval resolution on CPP has already passed the
House Subcommittee.
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Morgan Meguire Federal Legislative Update
November 23,2015
Page 2
- A disapproval resolution on Obama Administration's Waters of the United
States (WOTUS) which would expand the jurisdiction of the federal
government under the Clean Water Act also passed.
5. Nuclear Policy
- The Senate Environment and Public Works Committee held an oversight
meeting featuring the current members of the National Regulatory
Commission (NRC) and invited 5th seat nominee Jessie Robertson to testify
soon.
- The Senate Energy and Natural Resources Committee (ENR) also held a
hearing to consider 6 pending nominations.
6. Tax Policy
- Rep. Kevin Brady selected by the House Steering Committee as Chair of the
House Ways and Means Committee, replacing Rep. Paul Ryan who was
elected as Speaker of the House
- Rep. Ryan announced the creation of a task force to reform the Steering
Committee
7. Other
- APPA's President and CEO Sue Kelly has been named one of Washington's
Most Powerful Women
Prepared by: Liza Cawte, Senior Administrative Technician
Attachment: Morgan Meguire LLC Report
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Morgan Meguire, LLC
Memorandum
TO: Bill Carnahan,Executive Director
FROM: Lori Pickford,Executive Vice President
DATE: Nov. 10,2015
RE: November Legislative Report
I. Congressional Focus
Following a tumultuous few weeks of internecine fighting within the Republican House caucus,
Rep. Paul D. Ryan (R-WI) announced Oct. 20 that he would accept the job of Speaker of the
House if the various Republican factions would unite in endorsing him.
Efforts to draft Ryan for the job came after an unexpected revolt against the GOP
establishment's frontrunner,current Majority Leader Kevin McCarthy(R-CA). Just as the
October 8th meeting of the House Republican Conference to replace Boehner began McCarthy
abruptly withdrew his bid realizing he did not have the support of the far right-wing members of
the House Freedom Caucus without which would have lead to a bloody fight on the House floor.
On Oct. 28,the House of Representatives voted to elect Ryan to be the next Speaker of the
House; Ryan received 229 votes while 184 members voted for House Minority Leader Nancy
Pelosi (D-CA). Ryan, who has been in the House for 16 years,took over for John Boehner(R-
OH),who left the position (and Congress)on Oct. 30.
Overall Budget Caps and Debt Limit Lifted
One of Boehner's final acts as Speaker was to pass a bipartisan two-year budget deal,setting
higher overall spending levels, leaving the details of specific funding of each federal agency up
to individual appropriators. On Oct. 26,the House passed,by a vote of 266-167, an$82 billion
budget deal that increases spending caps for the next two years and raises the debt limit until
March 2017. The Senate followed suit in a 65-35 vote. President Obama signed the bill on
Nov. 2.
The budget deal raises spending caps on both domestic and defense for two years,maintaining
across-the-board cuts (sequestration)on mandatory spending programs,which includes interest
payments made to issuers of Build America Bonds. The agreement means Congress and the
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White House may not have to negotiate another high-stakes fiscal battles until after the 2016
Presidential election-a key goal for both parties.
The budget agreement also paves the way for consideration of 12 individual annual spending
bills for 2016 when the Continuing Resolution expires on Dec. 11. The agreement sets higher
overall spending levels for those bills, giving members more flexibility to reach agreement on
detailed program funding. It does not, however, address the addition of various politically
charged policy"riders," such as rolling back the implementation of the Waters of the
U.S. (WOTUS)rules, among others (see related story below).
Conservative Republicans strongly opposed the deal. Incoming Speaker Ryan criticized the
process used to craft the budget/debt ceiling deal, but not its substance. In order to appease
frustrated members of the conservative House Freedom Caucus, Ryan said he will revise internal
House procedures, including restructuring the powerful Steering ommittee that selects committee
assignments, by the end of the year.
II. Cyber and Grid Security
Cyber Security Information Sharing Passes Senate
On Oct. 28, after six years of deliberations, Intelligence Chair Richard Burr(R-NC)and Vice
Chair Dianne Feinstein(D-CA) successfully navigated Senate passage of S. 754, the
"Cybersecurity Information Sharing Act" (CISA). The measure passed by a vote of 74-21. This,
after votes occurred on a slate of amendments, including a Burr-Feinstein Substitute that
incorporated a number of changes in an effort to win support for the measure. Senator Barbara
Boxer(D-CA) voted in support of the final bill.
Passing cybersecurity information sharing-legislation has been a top priority goal of SCPPA, and
with Senate passage the effort is one step closer to becoming law. S. 754 authorizes private
entities (including public power)to voluntarily share cyber threat information with the federal
government, and includes liability protection for entities that share information, as well as an
express exemption from the Freedom of Information Act (FOIA) for shared information.
In a move that likely helped convince some Senate Democrats to vote for the measure,the White
House issued a Statement of Administrative Policy(SAP) supporting the bill shortly before final
consideration.
S. 754 will now have to be reconciled with the House-passed bill, H.R. 1560, the"Protecting
Cyber Network Act" (PCNA), through a House-Senate conference or other means. Getting this
done before the year-end is not likely, but Morgan Meguire, on behalf of SCPPA, will be
working closely with the electric sector cyber coalition as the process moves along.
During Senate floor consideration, the electric sector cyber coalition, including APPA, EEI,
NRECA, and others in the industry, strongly supported the underlying bill, and opposed key
amendments - in particular the Franken and Leahy amendments - to restrict the definition of
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information that can be shared and to remove the express FOIA protection, respectively. The
Franken amendment was defeated by a vote of 60-35 and the Leahy amendment failed by 59-37.
Of the remaining amendments opposed by the electric sector, all were defeated but one, offered
by Sen. Jeff Flake(R-AZ)that would place a 10-year sunset on the bill's authorization. The
House bill includes a seven year sunset as well.
The other amendments opposed by the electric sector--individually offered by Sens. Dean
Heller(R-NV), Chris Coons(D-DE) and Ron Wyden (D-OR) --would have raised the bar so
high on standards and timing for scrubbing of personal information,that they would have
discouraged private sector information sharing. Sens. Burr and Feinstein maintained their
bipartisan front and spoke against each amendment. They said they would upset the carefully
crafted balance that had been reached in the bill between protecting personal information and
encouraging private entities to share cyber threat information.
On Oct 21, SCPPA sent a letter to Senator Boxer outlining their support for the bipartisan bill,
and encouraging her to oppose key amendments on the floor. (A copy of the letter had been
circulated to SCPPA member previously.)
House-Senate Cyber Conference
To be addressed in conference is an onerous provision advanced by Sen. Susan Collins(R-ME),
which was agreed to by Burr and Feinstein. That provision(Sec. 407)would require private
entities to report to the Department of Homeland Security (DHS)on cyber intrusions that could
result in"catastrophic"regional or national effects on public health, safety, economic security or
national security. DHS would report to Congress on those intrusions and develop a specific
strategy to mitigate them.
Both the Protecting America's Cyber Networks Coalition, led by the U.S. Chamber of
Commerce, and the electric sector cyber coalition believe the Collin's provision significantly
undermines the voluntary nature of the bill. Both groups will work to strike it during the
negotiations between the House-Senate Conference Committee.
NRC Issues Cyber Reporting Requirements
The Nuclear Regulatory Commission(NRC)published a final rule Nov. 2 requiring nuclear
plants to report cyber attacks within eight hours of discovering the attempted intrusion.
The current, voluntary system is being replaced with a tiered approach that requires NRC
notification within one hour if a safety, security, or emergency preparedness system has been
adversely impacted. If important systems could have been impacted(but were not),the rule will
require reporting within four hours, and intrusions into intelligence gathering systems will need
to be reported within eight hours.
Only cybersecurity events associated with actual or potential adverse impacts are to be reported.
Compliance with the rule is set for 180 days from publication: likely April 30,2016.
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III. Energy Policy
House Adds Upton Energy Amendment to Long-Term Transportation Bill
On Nov. 4, the House passed its version of the long-term transportation authorization bill,H.R.
22, with an amendment advanced by Energy and Commerce (E&C)Chair Fred Upton(R-MI)
that includes five energy-related provisions, of interest to SCPPA members.
The measures in the Upton Amendment also appear in H.R. 8,the comprehensive energy bill
reported by the E&C Committee on Sept. 30 (passed largely along party lines). That bill is
awaiting a separate vote on the House floor(details below). A long-term transportation bill,
however, is considered a"must pass"bill and is on the short list of items expected to move
forward before the end of the year. Current transportation authorization expires on Nov. 20, so a
comprehensive long-term bill must be passed or another stop-gap measure will be needed, while
negotiations continue.
The Upton energy amendment adds the following provisions from H.R. 8 to H.R. 22:
1. Emergency Preparedness measures focused on oil and gas supply disruptions;
2. Safe harbor from environmental liability during grid reliability conflicts (known as the
Olson provision);
3. Department of Energy (DOE)authority to order action to protect the Bulk Electric
System in the event of a grid emergency, including information disclosure protection for
public power and no mandatory cost recovery authority;
4. A DOE plan to establish a Strategic Transformer Reserve; and
5. A report on energy security valuation in international markets.
The Upton amendment does NOT include provisions of H.R. 8 that would improve hydropower
licensing(which was supported by WPUDA and the utility sector generally)or that would
promote coal-fired and nuclear generation in RTO capacity markets, skewing market functions
and increasing costs to consumers (which was opposed by APPA).
It is uncertain whether the Upton amendment will remain attached to the transportation bill as the
chambers move to resolve differences between H.R. 22 and the Senate-passed highway bill. The
Conference Committee established to do so could use the Upton language to open the scope of
H.R. 22 to include additional energy-related provisions, including additional items from H.R. 8
or from the Senate energy bill (S. 2012). On the other hand, if addressing the energy provisions
jeopardizes passage of the transportation bill,the conferees may exclude the Upton language
from the vehicle it sends back to the respective chambers for final passage.
In the meantime, E&C Committee staff says a vote on H.R. 8 itself could come the week of Nov.
16 or 30—but the timeline for considering that bill has slipped before.
In order to appease conservative groups, (i.e. Heritage Action),provisions in H.R. 8 that would
authorize additional spending are expected to be stripped before consideration. These include, for
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example, DOE programs to provide workforce training for energy and manufacturing jobs, along
with incentives for the development of small hydropower projects.
DOE Continues Effort on QER; Electricity Focus
On Oct. 22,Karen Wayland,the Deputy Director of DOE's office of Energy Policy and Systems
Analysis(EPSA)spoke at an energy stakeholders event in Washington,DC about the upcoming
Quadrennial Energy Review(QER) installment. Wayland said the second installment of the
QER will focus on electricity generation and distribution.
According to Wayland,DOE plans to hold more technical meetings and fewer stakeholder
meetings to gather input. Last year,EPSA held 14 stakeholder meetings around the country to
take input, and many public power officials,presented their views. Wayland said the second
QER will launch in December.
The first QER's results were rolled out on April 21, 2015 following a Presidential Memorandum
directing DOE to review the nation's energy infrastructure and identify the threats,risks,and •
opportunities for the energy industry. The first QER installment focused on energy
infrastructure, including rail, pipelines,and transmission. Some of the recommendations of the
first QER were addressed in House and Senate energy bills(mentioned above),now pending in
both Chambers.
IV. Environmental Policy
The Environmental Protection Agency (EPA)published the suite of rules that comprise the Clean
Power Plan(CPP)in the Federal Register on Friday, Oct. 23. The publication begins the clock on
lawsuits challenging the rule, and as many as 26 states have joined a suit as of Nov. 2.
A court could temporarily stay implementation of the rule,but since states are not being asked to
make any changes until after a series of plans are submitted, states are likely better off continuing
the planning process until a court rules conclusively on the substance of the rule. That would not
be concluded for several months, and would likely be appealed to the Supreme Court under any
circumstances. The lag time is likely to ensure that President Obama will be able to point to the
rule during climate talks in Paris this December.
Disapproval Resolution on CPP Passes House Subcommittee
GOP Members of Congress have not given up trying to throw legislative roadblocks in front of
the rules. On Nov. 3,the House E&C Subcommittee on Energy and Power approved two
Congressional Review Act(CRA)resolutions—H.J. Res. 71 and H.J. Res. 72—disapproving of
the Environmental Protection Agency's (EPA) Clean Power Plan rules (limiting carbon dioxide
emissions from new power plants and from existing power plants,respectively). Both measures
passed by a party-line vote of 15-12.
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The resolutions simply state that Congress disapproves of the rule in question, as it appears in the
Federal Register, and declare that the named rule shall have no force or effect. They now move to
the full E&C Committee, although a markup has not been scheduled.
Although it is clear the resolutions have no chance of becoming law, Republicans may be
processing the resolutions through regular order to draw out the process,and thereby time floor
votes to coincide with President Obama's attendance at the December climate summit in Paris.
The Senate has not yet taken up a companion effort, but likely will.
Disapproval Resolution on WOTUS Passes the Senate
In addition, Republican lawmakers also continue efforts to block the Obama Administration's
Waters of the United States (WOTUS) rule, which would expand the jurisdiction of the federal
government under the Clean Water Act.
On Nov. 4,the Senate passed S. J. Res 22, a disapproval resolution under CRA to overturn the
Obama Administration's Waters of the U.S (WOTUS) rule, by a vote of 53-44. All GOP
Senators and three moderate Democrats voted in favor of the resolution. The electric industry
opposes the WOTUS rule because it expands federal jurisdiction over water and adjacent land,
increasing the regulatory burden on utilities.
The day before (11/3), the Senate failed to invoke cloture to consider Sen. John Barrasso's (R-
WY) S. 1140, the "Federal Water Quality Protection Act, " by a vote of 57 to 41 (60 votes were
needed). Barrasso's bill would have blocked the rule, as well as set new criteria for any rule
defining the scope of the Clean Water Act.
In the Senate, CRA resolutions only need a simple majority to move forward and cannot be
filibustered, but are still subject to a Presidential veto. The White House has placed its full
support behind the WOTUS rule and has said it will veto any measure that undoes or blocks the
rule. The White House issued a Statement of Administration Policy to that effect regarding the
Barrasso bill on Nov. 3.
The vote counts indicate that S. J. Res. 22 would not have the two-thirds support needed to
overturn such a veto. Nevertheless, the resolution now moves to the House for consideration,
where Rep. Adrian Smith(R-NE) introduced a similar measure, H.J. Res. 59.
In related news, on Oct. 21, the U.S. Court of Appeals for the Sixth Circuit scheduled oral
arguments to determine whether the legal battle over the WOTUS case should be heard in federal
appeals court or in federal district court. Arguments are set for Dec. 8.
The same court on Oct. 9 extended a"stay"of the rule to all 50 states. Previously,thirteen states
that were party to a challenge filed in a North Dakota district court won a stay,while the rule
went into effect in the remaining states.
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V. Nuclear Policy
On Oct. 7,the Senate Environment and Public Works Committee held an oversight hearing
featuring the four sitting members of the NRC. Chair Jim Inhofe(R-OK) said at the hearing he
intends to invite the nominee for the fifth seat on the Commission,Jessie Roberson,to testify
soon and that he plans to draft legislation reforming the NRC budget.
While Republicans mostly asked about budget issues, Ranking Member Barbara Boxer(D-CA)
focused on nuclear safety regulations. She also asked Commissioner Jeff Baran about the use of
qualitative analysis,which the nuclear industry has said should not be used to justify new,
expensive regulations.
Baran replied that the agency needs to use both quantitative and qualitative analysis in any
decision, saying some benefits are hard to quantify, but are still important to include in cost
benefit analyses.
On Oct. 20,the Senate Energy and Natural Resources Committee(ENR) held a hearing to
consider six pending nominations—three for each of the departments under the Committee's
jurisdiction: the Department of Energy (DOE) and Department of the Interior.
Sen. Jim Risch (R-ID) introduced John Kotek, who is nominated to be the Assistant Secretary of
Nuclear Energy at DOE, and touted the fact that Kotek's nomination is supported by the entire
Idaho delegation. Industry groups support Kotek as well.
Kotek is the Acting Assistant Secretary for Nuclear Energy,having taken over for outgoing Pete
Lyons on July 1. Previously,Kotek served as the Staff Director of the Blue Ribbon Commission
from 2010 to 2012 and worked for DOE's Idaho Operations Office,where he oversaw the Idaho
National Lab contract. In 2003, Kotek worked at Argonne National Lab on next-generation
nuclear energy systems.
Of interest to SCPPA, Kotek emphasized the importance of a consent-based siting process to
find a"willing and informed host" for all nuclear waste.
Committee Chair Lisa Murkowski (R-AK)did not indicate when the ENR Committee would
vote on the nominations.
VI. Tax Policy
Texas Republican Brady Ascends to Ways and Means Gavel
On Nov. 4, the House Republican Steering Committee selected Rep. Kevin Brady (R-TX) to
replace recently-elected Speaker Paul D. Ryan (R-OH)as Chair of the House Ways and Means
Committee. The full House Republican Conference endorsed his nomination on Nov. 5.
Ryan, who had jumped over the more-senior Brady to take the gavel of the tax-writing panel in
January,threw his support behind Brady and helped him narrowly edge out Rep. Pat Tiberi (R-
OH),a less senior member viewed as an ally of former Speaker John Boehner(R-OH).
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Brady said he envisions a"pro-growth agenda" for the Committee. "This includes taking real
steps toward fixing this broken tax code,reforming welfare, saving Social Security and Medicare
for the long-term and enlarging America's economic freedom to trade,"he said. "We have a lot
of work to do, and it won't happen overnight for this reason: While many of these solutions
originate in the Ways and Means Committee, I intend to seek the ideas and active engagement of
our Republican Conference."
In related news,Speaker Ryan announced the creation of a task force to reform the Steering
Committee. The extreme conservative House Freedom Caucus has criticized the panel for giving
too much power to GOP leadership and committee chairmen and has requested changes to favor
their faction. Ryan has promised to overhaul the panel by Thanksgiving.
VII. Miscellaneous Information
APPA 's Sue Kelly Named One of Washington's Most Powerful Women
APPA's President and CEO Sue Kelly has been named one of Washington's most powerful
women by Washingtonian magazine. The list is divided into 12 categories and includes women
in business, law,government, education, media, nonprofits and the arts.
The company that Kelly is keeping on this list is a veritable"Who's Who" of powerful women,
including First Lady Michelle Obama, Rep. Cathy McMorris Rodgers(R-WA), U.S. Attorney
General Loretta Lynch,and the three female justices on Supreme Court: Ruth Bader Ginsburg,
Elena Kagan, and Sonia Sotomayor.
Kelly,who has been President and CEO of APPA since April 1, 2014, was listed in the Business,
Labor and Lobbying section. Twenty five other women from trade associations, lobbying firms,
and private companies joined Kelly in that section. Inclusion on the list is a real coup for Kelly,
for APPA's legislative staff, and for public power generally.
Prior to joining APPA as General Counsel and then CEO, Kelly worked for NRECA and two
Washington-based law firms: Miller, Balis and O'Neil, P.C. and Crowell and Moring.
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