by Michael W. Kahn, staff writer for NRECA

After seeing the mildest winter in almost five decades last year, the winter of 2018 was a very different story for the Tennessee Valley Authority.

A colder-than-normal January helped TVA set three of its top 12 winter peak demand records, as well as an all-time record for energy demand in a 24-hour period: 706 million kilowatt-hours.

The provider of electricity to more than 150 co-ops and municipal systems reported May 4 that electricity sales climbed 6 percent in the first six months of fiscal 2018. At the same time, operating costs were down 4 percent, which TVA credited to more hydro and natural gas production, along with cheaper natural gas.

TVA raised base rates 1.5 percent last October. But John Thomas, chief financial officer, said the authority was “able to more than offset” that through fleet performance and lower fuel costs.

While the base rate increased from 4.8 cents to 5 cents, the fuel rate slipped from 2.1 cents to 1.8 cents. “So the overall effective rate to our customers is lower this year for the first six months than it was last year,” Thomas told a conference call.

TVA retired its Johnsonville Fossil Plant in December and its Allen Fossil Units 1-3 in March. But Bill Johnson, TVA president and CEO, made clear, “We expect coal-fired assets to continue to be part of our diverse generating mix for years to come.”

“We have continued to invest in our coal fleet, which remains an important part of TVA’s system,” he told the call.

Still, “TVA believes a diverse portfolio will continue to provide the most consistently low rates for our customers,” Johnson noted.

“One of the major changes for us is more nuclear capacity,” he said. “More nuclear power is a key part of our effort to make TVA’s power system cleaner and more diversified.”

For the first half of fiscal 2018, TVA said net income was up 140 percent from a year ago, to $750 million. Operating revenues were $5.3 billion, an increase of 5 percent from a year earlier.

Working late into the evening, the 110th General Assembly completed its work and adjourned SINE DIE on Wednesday, April 25, 2018. At least, we think they did (see below). It was a successful session for Tennessee’s electric cooperatives. Two significant pieces of legislation championed by co-ops are now law, and numerous bills with negative impacts were defeated.

Given that the final hours included acrimonious debate between the chambers, tension between the House and Senate was high. The first bill of the final day became the final bill of the session, as it required two separate Conference Committees to reconcile differences in the language. What was so unusual was that the committees produced the same legislative language in their reports. The first one failed when voted on by the House, the second (and identical) one passed several hours later.

However, the more detail-oriented Capitol watcher may wonder whether or not adjournment actually took place. According to the State Constitution, the legislature can only adjourn if either the House or the Senate passes a joint resolution and the other body concur in the same resolution. That is not what happened in 2018. After the long and sometimes bitter final day, both chambers passed their own resolutions and neither body formally endorsed the other one.

Barring a constitutional crisis, don’t expect any members of the legislature to call for their colleagues to return to Nashville to correct the formality, though. Election season has now begun.


Elections will re-shape representation

The summer and fall of 2018 will likely see record amounts of campaign activity. Six republicans, three democrats, and 26 independent candidates have filed petitions to be listed on the ballot to become Tennessee’s 50th governor since the term-limited Bill Haslam is unable to seek a third term. A competitive race to replace the retiring Bob Corker in the United States Senate could have national implications in terms of which political party controls the majority of seats. These two statewide races alone could result in over $50M of campaign spending as television commercials and direct mail pieces flood the state.

Additionally, three of the nine members of the United States House of Representatives are either retiring or seeking other office. This means the citizens of their districts will have the opportunity to elect new members of Congress. In the case of the 2nd Congressional District, in Knoxville and surrounding areas, it will be the first time since 1965 the Congressman will not hav the last name Duncan.

And now that the legislature has adjourned, state candidates are free to join their federal counterparts and fully engage in fundraising activities. Many primary elections will immediately kick into high gear, as the high degree of change could result in as much as one-third of the state legislature being new in 2019. Among state representatives who represent districts that include a electric cooperative, only two incumbent House members are running for re-election without opposition.

This election season will test the ability of co-ops to effectively engage with their legislative delegations. TECA staff stands ready to help member electric systems connect with candidates and demonstrate cooperative principle number seven – Concern for Community.


2018 Legislative Summary

Short summaries of the major issues that were enacted into law are provided below. In addition to the summaries provided below, you can view the final bill reports for this session, which include information about numerous pieces of legislation that were defeated throughout the year (smart meters, round up programs, utility board composition, and others).

Electric Cooperative Easements

SB 1646 / HB 1591

The State House and Senate approved legislation that will ensure efficient use of cooperative infrastructure for the provision of telecommunications and broadband services. After passage of the Broadband Accessibility Act in 2017, electric cooperatives were allowed to sell retail broadband services for the first time in their history. However, as many co-ops began to examine the possibilities a significant stumbling block to providing these services needed to be removed.

The fastest route to building broadband networks is for a cooperative to utilize its existing poles and routes of electric line for installation of new fiber-optic cables. However many of those routes cross private property, where the easement allowing access to the property was either prescriptive or limited to the provision of electric energy. This same issue has been the subject of significant litigation in Missouri, so TECA’s government relations team set out to change state law. Senator Ken Yager (R-Kingston) and Representative Gerald McCormick (R-Chattanooga) filed legislation to ensure that any easement used by a cooperative for the provision of electric energy could also be used for the co-op’s secondary purposes.

Thankfully, the General Assembly listened and passed Senate Bill 1646. After consideration by seven committees as well as the full House and Senate, the bill was approved unanimously. While other states have struggled with this issue, this legislation serves as a fantastic example of how electric cooperative’s unified voice can make a real difference at the Capitol.

Click here to see the final version.

Sales Tax on Utility Fees

SB 2121 / HB 2232

In response to an anticipated rule-making from the Department of Revenue, TECA joined with TMEPA, the Tennessee Gas Association, the Tennessee Association of Utility Districts, and the Tennessee Municipal League to propose legislation that prohibits the Department from applying sales tax to many fees charged to commercial and industrial utility customers. These fees, such as connection fees, have never before been subject to sales tax. The bill was sponsored by Sen. Ken Yager (R-Kingston) and Rep. Steve McDaniel (R-Parkers Crossroads).

Thankfully, the legislature listened. After some initial procedural uncertainty due to the bill’s effects of “forgoing” revenue to the state, the bill sailed through committees with broad support. It was enacted and made the law of the land on April 27.

Click here to see the final version.

Small Cell Legislation

SB 2504 / HB 2279

Titled the “Competitive Wireless Broadband Investment, Deployment, and Safety Act of 2018,” legislation that was intended to promote the deployment of small cell technology to facilitate 5G wireless services was passed after significant behind the scenes negotiation. However, those negotiations never spilled over into the legislative process as committee meetings saw little public fanfare over the issue.

The new law creates minimum standards for local governments to create siting requirements for small wireless facilities, and effectively prohibits local governments from imposing stricter requirements than those prescribed in the legislation. It also creates a maximum annual rental fee that local governments may charge for allowing this equipment to be attached to its buildings, water towers, traffic signals, light poles, etc.

Importantly, the language exempts electric cooperative (and all other electric distribution) infrastructure from the effects of the bill.

Click here to see the final version.

Broadband Accessibility Grants

Recognizing the need for the State’s investment in ensuring broadband becomes available for all Tennessee citizens, Governor Haslam included $10M in his original budget proposal for the Tennessee Broadband Accessibility Grant Program which is administered by the Department of Economic and Community Development. Rep. David Hawk (R-Greeneville) and Sen. Ken Yager both presented amendment requests to their respective finance committees, at TECA’s request, that would increase the fund. Additionally, Governor Haslam recommended an additional $5M of funding through his requested supplemental amendment to the budget.

At the end of the day, the budget passed by the legislature includes a total of $15M of broadband grant funding. The department will begin accepting applications in mid-July. To learn more about the program, visit ECD’s website.

At the end of March, TECA participated in Broadband Summit with the Governor and ECD. See the story here. We appreciate the dedication that Governor Haslam and his administration has shown to electric cooperatives and their involvement in broadband.

Flickr image by Casey Fleser

[NASHVILLE] – May is National Electric Safety Month. Electricity is an important part of our everyday lives, but each year unsafe and careless practices lead to fires, injuries and even deaths. Tennessee’s electric co-ops remind the public of the dangers of electricity and provides these tips to keep you and your family safe:

WHEN OUTSIDE

  • Keep people and pets away from damaged power lines and other electrical equipment. Don’t touch anything in contact with downed lines such as a car, tree, fence or clothesline.
  • Don’t climb trees or fly kites, remote control airplanes, drones or balloons near power lines. If you get something stuck on a power line, call your local electric cooperative or 911 and stay away!
  • Keep a safe distance from overhead power lines when working with ladders or installing objects such as antennas or gutters on your home.
  • If a power line falls on your car, stay inside the vehicle. Call yourself or ask someone to call 911, then your local electric cooperative. If you must exit the car, open the door and jump free of the car so that your body clears the vehicle before touching the ground. Once you clear the car, shuffle away using small steps with both feet on the ground until you are at least 50 feet away.

IN YOUR HOME

  • All electrical work should be performed by a licensed electrician.
  • Use GFCI-protected outlets in kitchens and bathrooms. Water and electricity do not mix.
  • Routinely check cords, outlets, switches and appliances for signs of damage. Immediately stop using damaged electrical devices and have them replaced or repaired.
  • Do not overload outlets with too many devices or appliances.
  • Never run extension cords under rugs or carpets.
  • When replacing bulbs, always follow recommended wattage recommendations.
  • Test smoke alarms once a month, and replace batteries once a year.
  • Don’t throw water on an electrical fire. Use an approved fire extinguisher.

ON THE FARM

  • Keep equipment at least 10 feet from lines – at all times, in all directions.
  • Inspect the height of the farm equipment to determine clearance.
  • Always use a spotter when operating large machinery near lines.
  • Use care when raising augers or the beds of grain trucks around power lines.
  • Always remember to lower extensions to the lowest setting when moving loads.
  • Never attempt to move a power line out of the way or raise it for clearance.
  • If a power line is sagging or low, call the local utility immediately.
  • If your equipment does hit a power line, stay in the cab. Call 911, warn others to stay away and wait for the utility crew to cut the power. If a fire or another situation makes it necessary to leave, jump clear and move away.

Electric co-ops routinely provide electric safety demonstrations for schools and other groups. Contact your local co-op for more information or to schedule a demonstration.

NASHVILLE – More than 60 co-op leaders from across Tennessee traveled to Washington, D.C., on Tuesday and Wednesday, April 10 and 11, to meet with members of the Tennessee congressional delegation as a part of the National Rural Electric Cooperative Association’s annual legislative conference.

“This trip is about building relationships,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “When lawmakers evaluate legislation that impacts electric co-ops or rural Tennessee, we want them to think of us. It is important for them to know who we are and how policy will affect us and our consumers.”

In meetings with legislators, co-ops leaders encouraged lawmakers to support the Farm Bill and rural development programs, reject the administration’s proposal to sell TVA’s transmission assets and dedicate funding for rural broadband and other infrastructure projects. Lawmakers were also invited to visit their local co-ops to meet employees, attend annual meetings or tour co-op facilities.

Meetings were held with Senators Alexander and Corker and Representatives Black, Blackburn, DesJarlais, Duncan, Fleischmann, Roe and Kustoff.

“I’m a big supporter of rural areas, and I thank you for coming up to give a voice to the people you serve,” said Rep. Diane Black. “A lot of people never make it to visit legislators in Nashville, and certainly not to Washington, D.C. It’s important for their issues to be heard, and I appreciate what you do.”

In addition to visits with members of Congress, attendees also heard from industry and policy experts, including U.S. Secretary of Agriculture Sonny Purdue. During a speech to co-op leaders, Secretary Purdue discussed the importance of rural broadband and highlighted the successes of Tennessee’s electric co-ops. “Rural broadband is not just a luxury — it’s essential,” said Purdue. “Tennessee recently changed state law, and now seven of their electric co-ops are pursuing broadband. I don’t believe that America would ever reach the productivity we have today across our nation without abundant flow of electricity everywhere. In the same way, we cannot make America great again without high-speed e-connectivity available to every American.”

 

NASHVILLE – Dan Smith, a leader among Tennessee’s electric cooperatives, passed away on Wednesday, April 11, 2018. Smith was a board member for Middle Tennessee Electric Membership Corporation in Murfreesboro and served on the Tennessee Electric Cooperative Association board of trustees.

Smith is remembered as a passionate advocate for cooperatives and rural Tennessee. A board member for Middle Tennessee Electric Membership Corporation for almost 50 years, Smith served in multiple capacities for the Tennessee Electric Cooperative Association in recent years, including board president.

“Dan Smith left a mark on rural Tennessee,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “He was a statesman who worked tirelessly to support cooperatives and other rural interests. His influence and service will be missed.”

“This news hurts, as we had hoped earnestly Mr. Smith would recover from this recent illness,” said Chris Jones, president and CEO of Middle Tennessee Electric Membership Corporation. “Our beloved Mr. Smith, leaves behind an unmatched and irreplaceable legacy, as no one loved the cooperative way more than Dan Smith. Middle Tennessee Electric and its employees past and present have lost a great champion for our cause. I will miss him greatly.”

Dan Smith speaking to delegates to the 2017 TECA Annual Meeting in Nashville.

 

Dan Smith and wife Vondie

NASHVILLE – There are more than 700 electric co-op lineworkers in Tennessee, and on Monday, April 9, we pause to honor their service to the state’s rural and suburban communities on National Lineman Appreciation Day. Tennessee’s electric co-ops extend our sincerest gratitude to the hardworking men and women who keep the power on and protect the public’s safety.

“We honor the dedicated service of these courageous Tennesseans and recognize the critical roles they play in keeping the lights on,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “Our communities depend on reliable energy, and Tennessee’s electric lineworkers place themselves in harm’s way to power our everyday lives.”

Electric co-ops maintain more than 86,000 miles of power line and keep the lights on more than 99.96 percent of the time.

“These are special people who are passionate about their jobs and the communities they serve,” says Callis. “They go above and beyond, and all of us in this industry are honored to work with them.”

You can help Tennessee’s electric cooperatives honor lineman by posting on Facebook or Twitter with the hashtag #ThankAlineman.

 

Spring is finally here! With the snow melted and the ground ready for planting, eager homeowners like you are gearing up to start those outdoor digging projects. Before you reach for that shovel to start digging, remember to call 811, the Tennessee’s call-before-you-dig number, to ensure that your buried utility lines are marked.

April is National Safe Digging Month, and Tennessee’s electric cooperatives want to remind our members that a complex network of pipelines, wires and cables lies just underground. Striking an underground utility line while digging can cause harm to you or those around you, disrupt service to an entire neighborhood and potentially result in fines and repair costs.

A call should be placed to 811 before every digging project, from simple landscaping projects like planting trees or shrubs, to building a deck or installing a rural mailbox. Every nine minutes an underground utility line is damaged because someone decided to dig without first calling 811. Don’t become part of the statistic – make sure to call 811!

Here’s how it works:

  • One free, simple phone call to 811 makes it easy for Tennessee 811 to notify all appropriate utility companies of your intent to dig.
  • Call at least a few days prior to digging to ensure enough time for utility lines to be properly marked.
  • When you call 811, a representative from Tennessee 811 will ask for the location and description of your digging project.
  • Tennessee 811 will notify affected utility companies, like your local electric cooperative, who will then each send a professional locator to the proposed dig site to mark the approximate location of your lines.
  • Once lines have been properly marked, roll up those sleeves and carefully dig around the marked areas.

NASHVILLE – On Tuesday, March 20, the BroadbandUSA Program, in partnership with the Tennessee Department of Economic and Community Development, hosted a Broadband Summit in Nashville. Gov. Bill Haslam along with other presenters discussed the importance of broadband and explored ways to increase deployment.

Gov. Haslam reiterated Tennessee’s commitment to expand broadband access: “All means all when it comes to access to education and job opportunities, and all means all when it comes to access to broadband.”

“Since the passage of the Tennessee Broadband Accessibility Act, electric cooperatives have moved swiftly to help answer the call for more broadband in rural Tennessee,” said Mike Knotts, TECA director of government affairs, who participated in a panel discussion during the Broadband Summit. “Seven of the state’s 22 electric co-ops have already made the decision to move forward with providing broadband service, and others are currently evaluating similar decisions.”

The Broadband Accessibility Act provided $10 million in grant funding in 2018 to spur broadband expansion in unserved areas. Earlier this year two co-ops received $2.7 million in broadband grants from the state. These grants have generated more than $90 million in broadband investment by electric co-ops in Tennessee. “The modest investments made through the Broadband Accessibility Grant Fund are already reaping huge rewards,” said Knotts. “That’s a tremendous multiplier, and we hope that future funding from the state will enable even greater levels of investment into this critical infrastructure.”

On Tuesday Gov. Haslam announced several budget amendments including an additional $5 million in nonrecurring broadband accessibility grants, in addition to the $10 million originally included in the FY 18-19 budget.

Gov. Haslam addresses attendees at a Broadband Summit hosted by the Tennessee Department of Economic and Community Development on Tuesday, March 20. Photo via Gov. Bill Haslam on Flickr.

NASHVILLE – More than 45 high school juniors from across the state attended the Tennessee Electric Cooperative Association’s annual Youth Leadership Summit on March 12-14 in Nashville.

Delegates to the annual event receive a hands-on look at state government, learn networking and leadership skills and develop a better understanding of their local electric cooperatives.

While in Nashville, the students visited the State Capitol Building where they were welcomed to Nashville by members of the Tennessee General Assembly. Alan Whittington, assistant chief clerk of the Senate, explained the process required to pass legislation and students debated and voted on a mock bill.

In addition to lawmakers, students also heard from Tennessee leaders like Caty Davis, Ms. Tennessee 2018; Adam Hammond, anchor for Nashville’s NewsChannel5; and Trooper Jeffrey Buchanan with the Tennessee Executive Protection Detail.

“There’s no time that’s bad to learn to be a better leader,” says Tanner Casey, a junior from Atoka High School attending the Youth Leadership Summit. “I appreciate the chance to improve my leadership skills, and I’m grateful for this unique opportunity.”

Delegates to the Youth Leadership Summit are encouraged to be leaders and use their talents to improve rural Tennessee. “Local electric co-ops, school officials and guidance counselors chose these deserving students to attend the summit based on their interests in government and strong leadership abilities,” says Todd Blocker, vice president of member relations for the Tennessee Electric Cooperative Association and director of the Youth Leadership Summit. “They will be the next generation of leaders in rural Tennessee, and we want to prepare them for the challenges and opportunities they will face.”

More Committees Closing

This week was make-or-break when it came to bills getting passed through House and Senate Committees. The committee’s calendars were long and many bills heard this week had organized opposition for the first time. After several weeks of committee Chairmen deferring bills that demonstrated any controversy or debate, a large number of bills finally failed or were sent to summer study, where recommended compromise legislation for 2019 can be formed. Oftentimes, these summer study committees never actually meet.

With close to 1/3 of the Legislature retiring or seeking other elected offices, 2019 will bring many new faces to the General Assembly. This means new committee chairmen will be appointed, House and Senate leadership positions will change and new issues will be brought to the table by new leaders. Retiring legislators that have been passionate about certain issues will no longer be around, so many bills that fail this year may never return. At least in their current form.

New Senator Sworn In

Newly elected Senator Shane Reeves (R-Murfreesboro) was sworn into office on Thursday in the Senate Chambers. In attendance for the ceremony were Gov. Bill Haslam, Sen. Reeve’s wife and his three children.

Reeves won a special election on Tuesday to fill the vacant seat, formerly held by Jim Tracy. The unofficial results indicated that Reeves received 13,130 votes, while Gayle Jordan received 5,179.

Reeves is a pharmacist by trade, the former owner of Reeves-Sain Pharmacy, and the CEO of TwelveStone Health Partners.

Save the Date – NRECA Legislative Conference

April 9-11, 2018
Hyatt Regency Washington
400 New Jersey Ave., NW
Washington, DC 20001


TECA Bill Tracker

High Value Bills | Complete Bill Tracker

Smart Meter Legislation

Two “smart meter” bills that have been repeatedly deferred in the House Business and Utilities Subcommittee over the last few weeks have finally been disposed of for the year.

The first bill, sponsored by Rep. Andy Holt (R-Dresden), would have removed universal use of advanced metering technology and would prohibit the recovery costs imposed by members who refuse the technology. A less restrictive amendment was prepared by Rep. Holt, but he decided to refer the bill to a summer study instead of taking a vote.

The second bill, sponsored by Rep. Antonio Parkinson (D-Memphis), would have prohibited a utility from charging its customers who have a smart meter a reconnect fee if the service was disconnected due to nonpayment. His argument was that since many utilities are no longer sending out employees in trucks to reconnect customers’ service, the process is like “flipping a switch” and requires no labor or costs. Therefore, the customer should not be charged any fee. TECA and other industry partners tried to explain to the sponsor why such charges are necessary, but he was insistent in his argument. The bill failed 2-7.

SB  2114 / HB 2495
Round Up Bill

Rep. Joe Towns’ (D-Memphis) bill regarding round-up programs was taken off notice this week in the House Consumer and Human Resources Subcommittee after 4 weeks of deferring the bill.

As originally drafted, the bill would deem any person, governmental entity or other legal entity that rounds up a customer’s bill for goods and services without obtaining the customer’s express, written permission to opt-in to such a billing procedure to be unlawful and an unfair trade practice.

After speaking to interested parties that opposed the bill, Rep. Towns drafted an amendment which would continue to permit opt-out programs, but would put into place strict reporting requirements on the funds raised. This amendment also received scrutiny from the same interested parties and was never voted on.

Finally, on Wednesday, Rep. Towns presented another amendment which excluded most entities from the bill, including electric cooperatives. Still though, the bill had received such negative responses from all stakeholders, the subcommittee members decided not to take action. Rep. Clark Boyd (R-Lebanon) requested that the sponsor take the bill off notice and offered to help him co-sponsor legislation next year pertaining to this issue, but that will be friendlier to the parties involved. The sponsor agreed.

If such legislation is to be introduced again next year, TECA will be involved in discussions and provide input that represents electric co-op interests, and will continue working to protect co-op round-up programs across the state.

Broadband Grant Budget Amendment

After consolation with TECA staff, Sen. Ken Yager (R-Kingston) and Rep. David Hawk (R-Greeneville) have proposed an amendment to Governor Haslam’s budget to increase the Broadband Accessibility Grant Fund. The Governor’s budget requested $10 million, and the amendment seeks to appropriate an additional $10 million (for a total of $20 M) for next year’s grants.

Each year, there are hundreds of budget amendments seeking to add billions of dollars to the state’s spending plan. With the first year’s requests to the Broadband Fund exceeding $60 M and an expectation that year two will see an even higher number of requests, TECA is optimistic about the opportunity to increse the Fund’s budget. However, approval of the budget is typically the last major action taken before the legislature adjourns for the year. So it will be another month, or so, before the final decision is made.
For the remainder of the second session of the 110th General Assembly, View from the Hill will be published bi-weekly.