Archive for the ‘Regulation’ Category

111(d)ominates NARUC in Dallas

July 23, 2014

By John Howell, Esq., Vice President

111(d)ominatesHow things have changed in six months. The National Association of Regulatory Commissioners (NARUC) Summer Committee Meetings were held last week in Dallas with the Environmental Protection Agency’s 111(d) proposed guidelines to reduce greenhouse gas emissions from existing fossil-fueled power plants dominating the meetings. By comparison, no single issue dominated the Winter Committee Meetings last February. Hydraulic Fracturing (“Fracking”), Integration of the Electric Grid, Demand Response, Cybersecurity, and Net Neutrality – among several other topics – each played a prominent role in shaping the Winter Meetings’ discussions. In Dallas, it was an entirely different atmosphere. From the start of the meetings with the Staff Subcommittee on Electricity taking up a discussion on “Compliance Strategies for 111 (d) and Impacts on System Reliability” to the final General Session dedicated to “111(d) in Big D: Compliance Options, Regional Approaches, and Where We Go From Here”, it was impossible to step into a room, a hallway, or even the sports bar and not discuss 111(d).

There were several other important issues being addressed at the NARUC Summer Meetings, including an issue that desperately needs resolution after many (too many) years of discussion. Why are we still dealing with large scale E911 (wireless) systems issues and when will Public Safety finally get the next generation E911 system they deserve? The Telecommunications Committee held a meeting to discuss “The Vulnerabilities and Opportunities of Next-Generation 911 Networks” and focused on Washington State where, this past spring, there was a large-scale outage resulting in thousands of emergency calls left unanswered. Due to the nature and location of this outage, several other states felt the impact as well. This outage joins what is nothing short of a debacle in New York City concerning the myriad problems with the City’s “upgraded” 911 system, and several prominent stories concerning the misrouting of calls including those in my backyard of Washington, D.C. As a former attorney at a major wireless company, focused on the nation’s E911 system, I can tell you these issues should not be rearing their head. It is far past the time where public safety should have a reliable E911 system and far past the time for discussions around these problems….although I praise NARUC for continuing to beat the drum for public safety.

The electric grid, distributed generation, and demand response were topics that shared some of the spotlight at NARUC. Meeting topics included: “The Integrated Grid: A Deep Dive”, “Sharknado: Are Claims About the Impending Demise of a Centralized Grid Greatly Exaggerated” and “The D.C. Circuit Kills Demand Response Compensation, Now What?”. The most informative and lively meeting I attended on this subject was not actually a NARUC meeting, however. The Institute for Electric Innovation hosted a briefing on “The Power Grid’s Evolution into an Energy Services Platform.” The panel, consisting of senior utility, solar, and industry representatives along with a Commission chairman, held a non-scripted discussion that was both refreshingly honest and informative. Two common themes permeated the discussion. First, the centralized electric grid is here to stay – at least for the foreseeable future – but it must evolve and adapt to the increased availability of alternative sources of energy including solar and wind. Second, consumers must be better educated about the value of the electric grid. As one presenter put it, “it’s not as simple as putting solar panels on your roof and believing that’s all you will need and are no longer dependent on the grid.”

One of the most surprising things I heard at NARUC came out of a fairly innocuous meeting discussing hydraulic fracturing. Several commissioners in attendance prefaced their comments and/or questions with the statement that they are pro-fracking and either wish their respective states had shale gas plays or, if they did have shale gas plays, that they encourage greater fracking operations. Fracking is an issue we are following closely and it is one of the truly divisive topics in the regulatory arena. As such, I expected the commissioners to be reticent to speak strongly one way or the other on the subject due to its incendiary nature; instead, I heard resounding support for the industry.

But 111(d) “(d)ominated.” Meetings were standing room only and regulators were engaged more so than on any other topic. During the final General Session that concluded the meetings, the Honorable Jon McKinney, Commissioner, West Virginia, set forth the concerns that many, if not all, of the states share in a Top 10 List cut right out of the pages of a Late Night with David Letterman script. Two entries on the Commissioner’s list particularly struck me and, I think, really frame the debate that has started and will continue for months to come. In making a point about the danger of making assumptions, Commissioner McKinney opined in his #3 on the list that the EPA “is assuming the legality of regulating under 111(d).” Additionally, while the entire “Top 10 List” was clearly a tongue-in-cheek approach to some very serious concerns, #1 on this list is, perhaps, the most significant point the Commissioner made: “The EPA is underestimating higher resulting electricity rates.” For me, that is the ultimate issue. What will be the impact to consumers as a result of the EPA’s 111(d) guidelines?

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John Howell is Vice President of Regulatory Services at Stateside Associates. With substantial policy and legal experience, Mr. Howell guides Stateside Associates’ regulatory counsel and provides clients with hands on Regulatory Issue Management support from strategic planning, regulatory advocacy, and working with groups of state and local officials.

Despite New Options for Engagement with Regulatory Groups, Old Rules Still Apply

July 15, 2014

By Mark Anderson, Esq., Senior Vice President

Engaging Regulatory Groups

I have worked with State Regulatory Groups throughout my career. While they can be challenging to navigate, I have found that the meetings can be effective forums to develop key relationships and advance state and federal issues. But unlike most Groups of elected officials, Regulatory Groups typically have no formal avenue for private sector participation. In the past this has been an obstacle to effectively engaging with these Groups, but recent changes at some of the smaller policy-focused Regulatory Groups are creating new opportunities.

Large Groups, such as the National Association of Regulatory Utility Commissioners (NARUC) and the National Association of Insurance Commissioners (NAIC), have substantial funding streams from publications and conferences. The smaller Groups are often more reliant upon federal funding. As these funding streams have dried up in recent years, these Groups are becoming more creative about financing their operations.

Sponsorships are one way these Groups are augmenting their budgets. The Association of State and Territorial Solid Waste Management Officials (ASTSWMO), a Group I work with closely, recently instituted a sponsorship policy for the first time since the organization was founded in 1974. The policy acknowledges that sponsors may obtain a benefit from being able to provide information to its members, but it also provides strict anti-conflict guidelines.

As another example, the Environmental Council of the States (ECOS) has instituted a one-day State Environmental Protection (STEP) meeting. The STEP meeting allows attendees to focus on a topic that benefits from a more in-depth and inclusive discussion than is possible at regular ECOS meetings. Unlike other ECOS conferences, private sector organizations are allowed to sponsor the meetings and participate in discussion. Last year, the STEP meeting considered the issue of hydraulic fracturing. This year, the STEP meeting is addressing the Clean Air Act 111(d) rule proposal, released by the United States Environmental Protection Agency on June 1. This meeting will help the states to prepare comments on this rule and begin planning compliance plans.

Whether these two developments are anomalies or mark the beginning of a trend remains to be seen. Now is still a good time to assess what Groups representing regulatory officials are doing in your issue areas of concern. If you are not presently engaged, look into getting to know these Groups and their leaders. Consider taking advantage of the new programs for private sector participation.

1. Regulatory Groups are not always open to the public. I have frequently heard complaints from the private sector that these meetings should not be closed due to state sunshine laws. The reality, however, is that these meetings are not used to develop state policies. They are used instead to share information and take positions on federal issues. State sunshine laws, therefore, do not apply. If you want to attend, you must be invited by the organization.

2. Most Regulatory Groups do not have corporate membership or programs. When you attend one of these meetings, you are attending as a guest. The Regulatory Groups that I have dealt with are wary of being seen as influenced by the business community. Members may have differing degrees of sensitivity to this that may be dependent upon political issues in-state, or the industry you represent. You should be respectful of their delicate position. Do not be surprised if your offer to take a member to dinner, buy a drink or even a cup of coffee is denied for this reason.

3. Respectfully mind the relationship between regulators and the regulated community when engaging on issues at Regulatory Groups meetings. Many of the individual state members of these organizations will agree with you that education from stakeholders is critical to good policymaking. While lobbying occurs at these meetings, and I would argue that it should occur, discretion is critical. When state regulators are perceived to be influenced by lobbying from stakeholders, they lose credibility among their peers. In the long run, that only hurts you and the regulator.

4. Regulators appreciate your understanding of their area of expertise. For regulators, one of the satisfying aspects of these national organizations is the opportunity to interact with people that deal in the same, sometimes very narrow, arena. I have found that the best way to develop good relationships with regulators is to begin by being proficient in discussing their areas of expertise.

5. Be prepared to discuss your issues. Small Regulatory Groups are often sparsely attended by the private sector. This creates great opportunity for substantial interaction with members of the Group. However, if you attend one of these meetings, you and your organization will be noticed. Be prepared to explain why you are at the meeting and which particular issues interest you.

If you have a policy issue to address, there is almost assuredly a Regulatory Group appropriate to address the issue. New avenues for participation are making this easier than before and bringing new stakeholders to the table. If you follow the foregoing best practices for respectful participation, working with Regulatory Groups will be an effective way to engage your issues.

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Mark Anderson, Esq. is Senior Vice President working at Stateside Associates managing the Regulatory Services Division. He advises clients on engagement strategy and directs educational and “grasstops” campaigns directed at governors and regulatory officials. Mr. Anderson also has created issue advocacy coalitions and facilitates work group meetings of state and federal stakeholders addressing environmental issues.

Regulation Déjà Vu

June 5, 2014

By John Howell, Esq., Vice President

SRegulatory Activity Overloadummer is approaching and state legislative sessions are winding down. But, for those who focus on state regulations, the “high season” is still very much underway. And, it all has to do with state elections.

With 36 gubernatorial elections in November, along with high profile issues such as hydraulic fracturing, health care, network neutrality, privacy of information, and a myriad of environmental issues dotting the regulatory landscape, the second half of 2014 is shaping up to be a heavy period of regulatory activity.

We often observe a spike in regulatory activity following legislative sessions. The reasons run the gamut from implementing rules in response to the passage of new laws to more strategic reasons such as regulatory agencies’ desire to maintain independence and authority in the absence of legislative scrutiny. Regardless of the reason, there is no “summer lull” in state regulatory activity. In fact, we are again seeing a sizable uptick in activity through our Regulatory Forecasting and RegulationALERT services and that is in keeping with the historical trend for a midterm election year.

Using a constant issue set as the basis, here is what we have observed:

In 2009, the year preceding the last midterm election, our regulatory services team observed a 27% spike in the regulatory activity between the first half of the year against the second half. In the first half of 2009, our team monitored 738 new proposed regulations while in the second half of 2009 that number jumped to 928 for a total of 1666 first published regulations followed in 2009.

The spike in new regulatory activity continued into 2010 as we monitored over 3,100 new proposed regulations, an increase of nearly 100% against 2009.

Following the elections in 2010, the rate of regulatory activity continued to be strong. Over 1,120 new regulations were first published in the year after which the activity leveled off towards the latter half of 2011 through the first half of 2013.

Now, four years later with another midterm election on the horizon, our regulatory team witnessed a 44% increase in regulatory monitoring activity in the second half of 2013. In the first half of 2013 we monitored 679 new proposed regulations while in the second half of 2013 the number increased to 976 regulations.

In 2014, we are again witnessing close to a 100% spike in activity as compared to the same period in 2013. In this midterm election year, there have been over 1,200 new proposed regulations so far.

As Yogi Berra said so famously, “it’s déjà vu all over again”.

Adding dimension to the impact midterm elections have on regulatory activity will be the results themselves – particularly at the gubernatorial level. Past elections have demonstrated that the re-election of an incumbent governor, regardless of party, often leads to an additional spike in regulatory activity immediately following the election that carries through into the following year.

Conversely, newly elected governors, regardless of party, tend to move in a more deliberate fashion. Administrative priorities involved with taking office as well as the need to establish goals, objectives and new regulatory priorities are the likely driving factors. Therein lies the challenge as new priorities also generate new issues and concerns for those who monitor regulatory activity ranging from having to gain additional subject matter expertise to establishing new relationships with staff.

If 2010 was any lesson to us, we are staring at a sustained period of increased regulatory activity which could last through the first half of 2015.

Exciting times, indeed.

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John Howell is Vice President of Regulatory Services at Stateside Associates. With substantial policy and legal experience, Mr. Howell guides Stateside Associates’ regulatory counsel and provides clients with hands on Regulatory Issue Management support from strategic planning, regulatory advocacy, and working with groups of state and local officials.