APGA Weekly Update January 28, 2016

01-28-2016 12:23

APGA Board Approves 2016 Public Gas Policy Council Roster

At the January 25 APGA Board of Directors meeting, the Board unanimously approved the 2016 roster of the APGA Public Gas Policy Council (PGPC). The PGPC is an advocacy group made up of elected and appointed officials from public natural gas communities. The primary goals of the PGPC are: to assist APGA in moving legislation forward that is important to its members; to oppose harmful legislation; and, to provide advice on other legislative related issues of importance to APGA. The group also serves as a forum for elected officials to discuss public natural gas issues.

PGPC members come to Washington, D.C., each year to participate in the APGA Government Relations Conference, which includes meeting with their representatives to discuss public natural gas issues. In addition, this year the PGPC will also meet in September to have meetings with members of their congressional delegations. Locally elected and appointed public officials have a strong, persuasive, and authoritative voice in Washington, D.C., with their elected representatives in both the House and Senate. Having a core group of elected officials carry the public natural gas message to Congress has significantly strengthened APGA’s advocacy efforts.

If you have an elected or appointed official from your community that would be a good advocate for public natural gas, it is not too late to submit that individuals name for the PGPC. For questions about this article or the PGPC, please contact Dave Schryver or Scott Morrison of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org or smorrison@apga.org.

Commissioner Clark Announces Intention to not Seek Second Term

At the Federal Energy Regulatory Commission’s (FERC) January Open Meeting, Commissioner Tony Clark announced that he would not seek another term at FERC. Commissioner Clark is serving his first term at FERC, having been nominated by President Obama and sworn in on June 15, 2012 to replace Marc Spitzer. His five-year term is scheduled to expire on June 30, 2016; however under FERC rules, he can continue to serve through the end of the year if a replacement is not confirmed. Prior to his appointment to FERC, he served as the senior member of the North Dakota Public Service Commission since 2000. Mr. Clark is also the past President of the National Association of Regulatory Utility Commissioners. He has held a number of statewide positions in North Dakota and is a former state legislator.
When he was appointed to FERC, Commissioner Clark communicated his intention to focus on manipulation, energy market abuse, and infrastructure development. Commissioner Clark’s announcement comes approximately three months after Commissioner Moeller’s departure from FERC. With the departure of Commissioner Moeller, Commissioner Clark is currently the only Republican on the commission with the other three members being Democrats.

For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org.

APGA Requests Members to Sign Letter to Request Increase in Fiscal Year 2017 LIHEAP Funding

APGA is requesting that member systems sign on to an open letter (copy included below) to congressional appropriations committees from the National Energy and Utility Affordability Coalition (NEUAC), which requests an increase in the Low Income Home Energy Assistance Program (LIHEAP) for fiscal year 2017. APGA has already signed this letter. NEUAC is the result of a 2013 merger between the National Fuel Funds Network (NFFN) and the National Low Income Energy Consortium (NLIEC).

In fiscal year 2016, there was an initial release of $3.017 billion, which represents 90 percent of the full year funding available under the fiscal year 2016 Continuing Resolution. This joint letter requests funding for fiscal year 2017 at $4.7 billion in light of the continuing need for home heating and cooling assistance. Though this is still below the APGA-supported funding level of $5.1 billion for LIHEAP, it is a step in the right direction to restoring funding to its 2009 level.

Your system can find and sign the letter here. You will find a web form that will walk you through the process. The letter text can be found below and please note that you can contact liheap@neuac.org to list multiple states or cities so you can be recognized across your service territory.

APGA will keep members informed of any developments. If your system signs this letter, please contact Todd Brady of APGA staff by phone at 202-464-2742 or by email at tbrady@apga.org

An Open Letter to Congressional Appropriations Committees to Increase Funding for LIHEAP to At Least $4.7 Billion in FY2017

Dear House and Senate Appropriators:

We are writing to urge you to increase funding for the Low Income Home Energy Assistance Program (LIHEAP) in FY2017. Sufficiently funded, LIHEAP serves a vital, life-saving role protecting millions of families from America’s cold winters and hot summers. A FY2017 appropriation of at least $4.7 billion is necessary if this program is to continue to allow states and their charitable partners to serve the growing need of America’s most vulnerable households.

LIHEAP is an efficient, effective program. It helps your most vulnerable constituents, including the elderly – many of whom are on fixed incomes – the unemployed, families with young children, and the disabled. In FY 2015, 72% of the 6.8 million households receiving LIHEAP assistance had at least one member who was either elderly, disabled, or had a child under the age of five. According to a 2011 study by the National Energy Assistance Directors’ Association, fully 20 percent of LIHEAP households (1.78 million) contain veterans.

LIHEAP is not an entitlement and does not receive increased funding as need increases. Congress must appropriate funding annually. While states set eligibility guidelines, federal statute sets the income maximum at 150 percent of the federal poverty guideline or 60 percent of the state’s median income. (For FY2016, 150% of the federal poverty guideline for a family of three is $30,035.) Most LIHEAP
recipients fall well below the maximum thresholds and many LIHEAP-eligible households fail to receive any assistance because of insufficient funds.

In 2014, the national poverty rate was 14.8 percent and 46.7 million Americans lived in poverty, according to U.S. Census data. Though the economy is improving, the need for a program like LIHEAP persists. Between FY2009 and FY2016, LIHEAP’s appropriation was cut by more than one-third. Because of these cuts, states have been forced to reduce the number of households served, cut benefits, or both. We believe these reductions are too much.

We respectfully ask you to substantially restore LIHEAP funding in FY2017. While an appropriation of at least $4.7 billion is not enough to meet the full needs of vulnerable households, the program is much more effective at higher funding levels, and LIHEAP truly becomes a national program serving at-risk households in all regions of the country.

We know that Congress has made and will continue to make difficult budget decisions – but reducing LIHEAP funding is not the answer. We urge you to restore LIHEAP funding to at least $4.7 billion in FY2017.

Free Marketing Materials Available to APGA members on February 3!

The free Look Closer marketing campaign materials will be ready for APGA members to access and download online on February 3!
APGA has worked over the past year to develop a national, unified marketing campaign for its members to utilize. The theme is Look Closer and it encourages natural gas customers to learn more about the benefits and availability of the direct-use of natural gas. The materials in this campaign include a PSA, advertisements, brochure, and social media messaging. These materials are a benefit to APGA members and are no cost to members.

On February 3, APGA members should visit www.apga.org/lookcloser where they will find information and a link to access the materials. Members are then encouraged to download the materials and distribute them in their communities. It is imperative that members promote the direct-use of natural gas, and using the Look Closer campaign will greatly further this goal of our industry.

For questions about the Look Closer campaign, please contact Audrey Anderson at aanderson@apga.org.

APGA Members Attend Annual Gas Supply Conference

On January 26 and 27, APGA held its Annual Gas Supply Conference in Tucson, Ariz. The conference was very well attended by approximately 80 APGA members. It began with a welcome from Don Stanton, Senior Director of Gas Delivery at CPS Energy, and Chair of the APGA Gas Supply Committee. Participants then heard an outlook on gas supply from Jim Duncan, Chief Analyst & Commodity Market Strategist for ConnocoPhillips. David Holt, President & CEO of the Consumer Energy Alliance, then provided an update on an Environmental Protection Agency Draft Assessment addressing the impact of hydraulic fracturing on drinking water resources. He also discussed efforts at the state and local level to prevent natural gas production. Aubrey Hilliard, President of the Carolinas Division for Texican Natural Gas, then discussed the cost of shale gas production around the United Stated. The last presentation of the day was by Brad Leach, Principal for Energy Advisory Services, and Ben Schlesinger, President of Ben Schlesinger & Associates, in which they provided an overview of natural gas markets and hub liquidity. The day concluded with a networking reception.
Wednesday began with a presentation from Tom Saal, Senior Vice President of Energy, INTL FCStone Financial, Inc., who discussed hedging strategies for public natural gas systems. Bill Wickman, Director of Business Development for Spectra Energy then provided an overview of changing dynamics impacting pipeline flows. Tyler Noble, Managing Director for the Municipal Capital Markets Group, and Jim Choukas-Bradley, Partner for McCarter & English, then discussed a number of issues related to natural gas prepays. The conference concluded with a presentation by John Gregg, Partner for McCarter & English, addressing North American Energy Standards Board (NAESB) contracts.
The APGA Gas Supply Conference is held annually in conjunction with the APGA Winter Board and Committee meetings. 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. Presentations from this year’s conference are available on the members’ only portion of the APGA website at www.apga.org/tucson. The 2017 Gas Supply Conference is scheduled for February 1 and 2 in Clearwater Beach, Fla. For questions on this article or the Gas Supply Conference, please contact Dave Schryver or Scott Morrison of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org or smorrison@apga.org.

Senate Begins Energy Bill Debate

Despite the blizzard that paralyzed much of Washington, D.C., on January 27, the Senate began consideration of its energy bill, the Energy Policy Modernization Act (S. 2012). The debate is expected to last at least through the first week of February.

S. 2012 passed out of the Senate Energy Committee on a strong bipartisan vote 18-4, and hopes remain high that the bill could pass the full Senate. Despite the bipartisan friendliness, the threat of controversial amendments could derail the energy package. Members of Congress have indicated their desire for amendments on lifting the coal leasing moratorium on federal lands, increasing incentives for carbon capture and sequestration, repealing the waters of the U.S. rule, among many others, all of which are controversial for their substance or for their impact on the bill’s current deficit-neutral status.

Most important for APGA members, the legislation contains language supported by APGA that delays the Department of Energy’s (DOE) implementation of the furnace rule to allow stakeholders the opportunity to negotiate and reach agreement on a rule that makes sense. Specifically, the furnace language in the bill would prohibit DOE from prescribing a final natural gas furnace rule until:
1. DOE convenes a representative advisory group of interested stakeholders, including, among others, manufacturers, distributors, contractors, home builders, energy efficiency advocates, natural gas utilities, electric utilities, and consumer groups;
2. That advisory group completes an analysis of a nationwide requirement of a condensing furnace efficiency standard within one year including a complete analysis of current market trends regarding the transition of sales from non-condensing furnaces to condensing furnaces, the projected net loss in the industry of the present value of original equipment manufactured after adoption of the standard, the projected consumer payback period and lifecycle cost savings, a determination of whether the standard is economically justified, and other common economic principles; and,
3. The advisory group makes a determination as to whether a nationwide requirement of a condensing furnace efficiency standard is technically feasible and economically justified and that determination would be published in the Federal Register.

Should the advisory group determine that a nationwide requirement of a condensing furnace efficiency standard is not technically feasible and economically justified, DOE is required to, within 180 days from the date the determination is published in the Federal Register, establish amended standards through a negotiated rulemaking process.

By contrast, the furnace language in the House passed energy bill delays DOE’s furnace rule until July 2016 to allow stakeholders the opportunity to continue negotiations.

APGA anticipates that an amendment may be offered during floor debate to remove the current furnace language in the Senate energy bill and replace it with language that was passed by the House. APGA has also learned that the American Gas Association has taken a position of neutral on a potential amendment to replace the current Senate language with the House language, which would indicate that they have backed away from the stronger Senate language.

If you have not already done so, APGA needs your immediate assistance to contact your Senators as soon as possible and urge them to support the current Senate furnace language and oppose efforts to replace it with the furnace language passed by the House. Please contact APGA staff for talking points and updated information on the amendment’s status.

For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or by email at smorrison@apga.org.

EIA Reports Storage Decrease of 211 Bcf to Put Working Gas Storage at 3,086 Bcf

Here is the weekly EIA Summary Report issued on Thursday, January 28, 2016, which reports the week’s storage report highlights for Friday, January 22, 2016. A 211 Bcf decrease has been reported.

Working gas in storage was 3,086 Bcf as of Friday, January 22, 2016, according to EIA estimates. This represents a net decline of 211 Bcf from the previous week. Stocks were 530 Bcf higher than last year at this time and 432 Bcf above the five-year average of 2,654 Bcf. At 3,086 Bcf, total working gas is above the five-year historical range.

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