APGA Weekly Update November 10, 2016

11-10-2016 14:35

APGA Weekly Update, November 10, 2016
APGA Members meet in Chattanooga for Board and Committee Meetings
From November 6 through 8, APGA members met in Chattanooga, Tenn., for the APGA Fall
Board and Committee meetings. During this time, numerous APGA committees met and the
Board of Directors held its last quarterly meeting for 2016. One of the action items that
occurred at the Board Meeting was the Board’s unanimous approval of John Gregg from
McCarter & English to succeed Bud Miller as APGA’s General Counsel. Bud Miller, also of
McCarter & English, has been APGA’s General Counsel for 31 years and a dinner was held on
November 7 to honor and celebrate his many years of excellent and loyal service to APGA. Bud
will continue to serve as General Counsel through 2016 and John Gregg will assume that role on
January 1, 2017. John has worked with APGA and its individual members for numerous years
and is very knowledgeable regarding the challenges facing public natural gas systems and the
natural gas industry as a whole. The committee meetings concluded at noon on November 7
and were followed by the APGA Operations Conference, which was well attended by
approximately 200 people.
The next APGA Board and Committee meetings are scheduled for January 29- 31 in Clearwater,
Fla. The meeting will be followed by the annual APGA Gas Supply Conference, which will be
held on January 31 and February 1. The conference provides public natural gas systems with a
forum to learn more about natural gas supply while addressing current market changes and
challenges. The conference focuses on available purchase alternatives for public natural gas
systems and provides an overview of what the gas supply markets have in store for next year.
Information on the Gas Supply Conference is available on the APGA website at www.apga.org.
For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-
274 or by email at dschryver@apga.org.
APGA and AGA File Comments with Department of Justice on the Furnace SNOPR
On November 8, APGA and the American Gas Association (AGA) submitted comments to the
Department of Justice (DOJ) regarding the anti-competitive effects of the Department of
Energy’s (DOE) furnace Supplemental Notice of Proposed Rulemaking (SNOPR). The furnace
SNOPR proposed by DOE in September would establish a residential furnace nationwide
mandate of 92 annual fuel utilization efficiency (AFUE) with a small furnace exemption for
furnaces of 55,000 Btu or less. Furnaces under the small furnace exemption would be allowed
to be non-condensing, while all furnaces above that threshold would have to be
condensing. The rule would go into effect five years after the rule is finalized. The joint
APGA/AGA filing to DOJ is in response to a provision of the Energy Policy and Conservation Act,
which requires the Attorney General to provide DOE with a written determination of whether
the proposed standard is likely to lessen competition.
In the filing, APGA and AGA communicate, among other things, that the SNOPR will lessen
competition by driving natural-gas using consumers to less expensive but less efficient electric
alternatives. The filing also states that “serious technical flaws in the SNOPR analysis that
render its rationale for the proposed 92 percent standard and small furnace exception
unacceptable.” APGA and AGA also state that the record shows that the furnace market is
working without a rule and therefore the practical effect of the SNOPR’s new minimum
standards will be that consumers either are forced by the government to make an uneconomic
choice—and as such, they will incur a net cost to purchase a condensing furnace—or they will
switch from natural gas to a less efficient electric alternative.
A copy of the filing to DOJ is available on the APGA website at www.apga.org. Comments to
DOE on the furnace SNOPR are due on November 22. APGA will be submitting comments but is
also encouraging its members to submit their own comments. For questions on this article and
APGA’s efforts to respond to the furnace SNOPR, please contact Dave Schryver of APGA staff by
phone at 202-464-274 or by email at dschryver@apga.org.
Donald Trump Becomes Next U.S. President and Republicans Hold Senate and House
In an upset on November 8, real estate developer Donald J. Trump was elected to be the 45th
President of the United States by winning 279 Electoral College votes to Hillary Clinton's 218
while also taking 47.5 percent of the popular vote. Republicans also held the Senate taking 51
seats with Democrats only gaining one seat and taking their total to 47. Republicans easily held
the House of Representatives garnering 238 seats to the Democrats’ 192.
The presidential election was widely expected by experts on both sides of the aisle to be a win
for Clinton given her Get out the Vote operation and Donald Trump's recent personal
controversies. However, throughout the campaign, Trump argued that polling experts from
both parties were wrong and fundamentally misunderstood the deep voter resentment
towards the Washington establishment and that a wave of previously undetected voters by
polling experts would show up on Election Day. Trump was ultimately correct and the
demographics of his victory seemed to defy expectations. As Joel Kotkin of Forbes wrote,
"Trump won two-to-one among people without a college degree, matched Clinton among
college graduates, losing only those with graduate degrees, a group that has voted for the
Democrats since 1988.But there’s simply more high school graduates then those with graduate
degrees. And for now there are a lot more whites than minorities. As we look into the future,
these groups will fade somewhat but right now they can still determine elections."
The key Senate races in North Carolina, Indiana, New Hampshire, Pennsylvania, Nevada, and
Missouri resulted with Republicans winning every battleground seat except for Nevada where
Catherine Cortez Masto defeated Joe Heck, and Maggie Hassan is clinging to a less than 1,000
vote lead over incumbent Kelly Ayotte, though this race has not yet been called as of this
writing.
With continued Republican control of the Senate, there will be few changes on key Energy
Committee chairmanships. Senator Murkowski (R-Alaska) is poised to return as Chair of the
Senate Energy Committee and Senator Barrasso (R-Wyo.) will be Chairman of the Senate
Environment and Public Works Committee.
In contrast to the Senate, the House provided far less drama as the outcome matched
expectations. Republicans were consistently expected to hold the House with only scant
expectations that the Democrats might have had a chance at retaking the chamber. However,
the turnout that buoyed Trump and Senate Republicans also easily kept the House of
Representatives safely in Republican control.
Unlike the energy committees in the Senate, a number of critical energy committee
chairmanships in the House are up for grabs. Energy and Commerce Committee Chairman
Upton’s (R-Mich.) term is limited per Republican rules, meaning that Representative Shimkus
(R-Ill.) or Representative Barton (R-Texas) will likely be selected. In addition, the key
Subcommittee on Energy and Power chairmanship is up for grabs with the sudden retirement
of Representative Whitfield (R-Ky.) meaning that Representative Olson (R-Texas) is likely to step
up to the chairman role. All of these chairmanships will be selected during the House
Republican Conference meeting on November 15.
With all three branches in Republican control, President-Elect Trump will likely have the
opportunity to name three Supreme Court justices, which is usually any President's most
enduring legacy. Beyond the Supreme Court, Trump appears likely to pursue a more aggressive
immigration stance, with the centerpiece being the construction of a wall on the southern
border of the United States, as well as a more aggressive, unilateral foreign policy. The
repercussions for natural gas and oil appear to be quite favorable as President-Elect Trump has
vowed to do away with regulations that he considers burdensome and harmful to the fossil fuel
industries and the American economy as a whole. Trump has vowed to do away with the Clean
Power Plan as he views climate change as a hoax that stifles American industry and has vowed
to remove other regulations that inhibit the fossil fuel and other extractive industries. This
could signal that the Obama Administration rules regarding furnace efficiency, water heaters,
etc., focused on reducing energy use and decreasing emissions will be removed by a Trump
Administration. However, any such initiatives will still face a 60 vote hurdle in the Senate.
Though, Democrats' priorities on a number of fronts will be embattled and with only 47 seats,
the minority party will be unable to resist all such initiatives. Specific policy proposals beyond
these items have yet to be fleshed out, but are likely to become clearer as we get closer to the
inauguration.
As more information about chairmanships and cabinet appointments becomes available, APGA
will keep members apprised. For questions on this article, please contact Scott Morrison of
APGA staff by phone at 202-464-2742 at smorrison@apga.org.
Upcoming APGA Webinar: DOE Furnace Rule Review & Next Steps
Join APGA for a webinar on November 16 at 11 a.m. EST to review recent updates on the
Department of Energy’s (DOE) proposed rule, which raises the efficiency of natural gas furnaces
to 92 percent with a small furnace exemption for furnaces of 55,000 Btu or less. This webinar
will address any questions or comments APGA members may have before filing comments with
DOE by November 22.
Register at https://attendee.gotowebinar.com/register/672696985608260354
EIA Reports Storage Increase of 54 Bcf to Put Working Gas Storage at 4,017 Bcf
Here is the weekly EIA Summary Report issued on Thursday, November 10, 2016, which reports
the week’s storage report highlights for Friday, November 4, 2016. A 54 Bcf increase has been
reported.
Working gas in storage was 4,017 Bcf as of Friday, November 4, 2016, according to EIA
estimates. This represents a net increase of 54 Bcf from the previous week. Stocks were 47 Bcf
higher than last year at this time and 189 Bcf above the five-year average of 3,828 Bcf. At 4,017
Bcf, total working gas is above the five-year historical range.

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