SUBSTANTIVE RESOLUTIONS PASSED BY THE NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS COMMITTEE OF THE WHOLE AT THE 2015 ANNUAL MEETING (UPDATED: NOVEMBER11, 2015) NOTE - The summary statements describing each resolution are not comprehensive. If you have an interest in the subject matter outlined, you should read the resolution to get a sense of what policy is being proposed. Questions? Contact Brad Ramsay at 202.898.2207 or jramsay@naruc.org)
TABLE OF CONTENTS I. Critical Infrastructure (1) CI-1 Resolution Urging Generators to Take Corrective Action and Implement... Page 3 Primary Frequency Response [Sponsor: Haque] The resolution 1) encourages Generation Owners and Generator Operators to improve primary frequency response; and 2) encourages associated entities such as Balancing Authorities to support those efforts. [passed in Committee of Whole 11/11] II. Electricity (2) EL-1 Resolution Urging Generators to Take Corrective Action and Implement... Page 3 Primary Frequency Response [Sponsor: Ackerman] The resolution 1) encourages Generation Owners and Generator Operators to improve primary frequency response; and 2) encourages associated entities such as Balancing Authorities to support those efforts. [passed in Committee of Whole 11/11] EL-2 Resolution to Create a NARUC Staff Subcommittee on Rate Design... Page 5 [Sponsor: Ackerman] The resolution proposes a new NARUC Staff Subcommittee on Rate Design. [passed in Committee of the Whole 11/11] III. Energy, Resources, and the Environment (1) EL-2/ERE-1 Resolution to Create a NARUC Staff Subcommittee on Rate Design... Page 5 [Sponsor: Ackerman] The resolution proposes a new NARUC Staff Subcommittee on Rate Design. [passed in Committee of the Whole 11/11] IV. Gas (2) GS-1 Resolution on Establishing Additional PHMSA Pipeline Safety Training... Page 7 Facilities [Sponsor: Coleman] The resolution urges Congress to direct PHMSA to establish additional, regionally-located pipeline safety training facilities and to appropriate all necessary funds for said facilities. [passed in Committee of the Whole 11/11] GS-2 Resolution Calling for Congressional Action on Pipeline Safety... Page 9 Reathorization Act 1
[Sponsor Haque] The resolution encourages Congress to include NARUC gas safety amendments supporting the principles outlined in the July 2015 testimony presented to Congress by Chairman Wise. [passed in Committee of Whole 11/11] V. Telecommunications (2) TC-1 [withdrawn] TC-2 Resolution to Accelerate the Deployment of Next-Generation 911 Systems... Page 12 [Sponsor: Jones] The resolution endorses the analysis and recommendations of the Working Group 3 Report of an FCC Task Force on 911 issues and urges the FCC to give serious consideration of that report s recommendations. It also specifically endorses Chairman Wheeler s proposal to seek legislation to permit the FCC to use spectrum auctions proceeds to provide funds to States and Local Governments to accelerate the transition of legacy 911 systems to Next-Generation 911 networks. [passed in Committee of Whole 11/11] TC-3 Resolution to Expedite Availability of Remote Areas Funding and Connect... Page 14 America Funding to Unserved and Underserved Areas Where Carriers Have Not Accepted Funding [Sponsor: Sandoval] The resolution strongly supports the objectives of the Connect America Fund and its Remote Areas Fund component, and urges the FCC to move as quickly as possible to implement the Connect America Phase II competitive bidding process to ensure timely availability of high-capacity broadband facilities and service to the more remote areas of the nation, including tribal regions, where incumbent carriers have declined support from the Connect America Fund. [passed in Committee of Whole 11/11] VI. Water (1) WA-1 Resolution Celebrating the 50 th Anniversary of the Institute of... Page 10 Public Utilities at Michigan State University, and Its Contributions to NARUC [Sponsor: Patch] The resolution honors the 50 th Anniversary of the Institute of Public Utilities. [passed in Committee of the Whole 11/11] 2
EL-1 CI-1 Resolution Urging Generators to Take Corrective Action and Implement Primary Frequency Response WHEREAS, The Bulk Electric System (BES) must constantly maintain a balance of generation and customer load in order to function reliably and predictably; and WHEREAS, Changes in the balance of generation and customer load cause changes in frequency from nominal (60 Hz or 60 cycles per second); and WHEREAS, Balancing Authorities in North America strive to maintain frequency at 60 Hz, and must maintain frequency within pre-defined acceptable limits in order to avoid under-frequency load shedding that would cause the loss of customer load; and WHEREAS, Primary frequency response is provided by generators that automatically increase their output in response to an under-frequency event (i.e., where generation is less than customer load) or automatically decrease their output in response to an over-frequency event (i.e., where generation is greater than customer load); and WHEREAS, Historically, BES generators (along with load damping) have stabilized the generation/load balance automatically by providing primary frequency response within 1 to 20 seconds; and WHEREAS, The overall primary frequency response in the Eastern and Western Interconnections has declined over the past two decades; and WHEREAS, It has been discovered that the primary frequency response provided by many interconnected generating units does not occur, or is being prematurely withdrawn, before the grid returns to the desired frequency; and WHEREAS, While this decline in primary frequency response does not currently pose a widespread reliability risk, it could impact the ability of the BES to recover from consecutive system events; and WHEREAS, Adequate primary frequency response must be delivered and sustained in order to accomplish system restoration if the BES were to experience a widespread blackout; and WHEREAS, The North American Electric Reliability Corporation (NERC) is charged with monitoring the BES and has, in turn, charged its Resources Subcommittee to investigate the cause of the decline in primary frequency response and to understand the implications of a continued decline in primary frequency response; and WHEREAS, On January 17, 2005, the Resources Subcommittee highlighted the importance of the issue when it published recommendations stating, both the Western and Eastern Interconnections run a strong risk of under-frequency action [i.e., load shedding] if a standard is not adopted that establishes minimum levels of frequency response ; and 3
WHEREAS, Recently the Resources Subcommittee, through the efforts of the Frequency Working Group and the Eastern Interconnection Frequency Response Initiative, conducted generator surveys and generator manufacturer interviews and determined that the root causes of the primary frequency response decline can be traced to: 1) generator governor dead-band settings exceeding the recommended range; and 2) plant or generator control logic prohibiting or prematurely withdrawing primary frequency response; and WHEREAS, These two root causes are so pervasive that in the Eastern Interconnection, NERC found in the 2012 NERC Frequency Initiative Report from a study performed by the Multiregional Modeling Work Group that, only 30% of the units on-line provide primary frequency response; Two-thirds of the units that did respond exhibit withdrawal of primary frequency response; only 10% of the units on-line sustained primary frequency response ; and WHEREAS, On February 5, 2015, NERC published an Alert Advisory stating that the causes of the primary frequency response decline are: 1) generator governor dead-band settings exceeding the recommended range; and 2) plant or generator control logic prohibiting or prematurely withdrawing primary frequency response; and WHEREAS, On September 28, 2015, NERC posted for comment a Draft Reliability Guideline: Primary Frequency Control, that described these findings relative to the cause of the decline in primary frequency response and identified simple and cost-effective corrective measures that generators can take; and WHEREAS, Several entities have voluntarily initiated a comprehensive program to address inadequate or lack of primary frequency response; and WHEREAS, However, all entities in all interconnections need to, or should continue to address: 1) generator governor dead-band settings exceeding the recommended range; and 2) plant or generator control logic prohibiting or prematurely withdrawing primary frequency response; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, hereby 1) encourages Generation Owners and Generator Operators to pursue voluntary correction of this issue to improve primary frequency response; and 2) encourages associated entities such as Balancing Authorities to support Generator Owners and Generator Operators to improve primary frequency response. Sponsored by the Committee on Electricity and the Committee on Critical Infrastructure Recommended by the NARUC Board of Directors November 10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 4
EL-2 ERE-1 Resolution to Create a NARUC Staff Subcommittee on Rate Design WHEREAS, Rate designs raise crucial issues for consumers, utilities, and public policy generally; and WHEREAS, Rate designs often can be used to implement important State policies for the electricity, natural gas, and water industries; and WHEREAS, Rate designs adopted by State Commissions typically allow the utility to recover its revenue requirements or its total costs of service, and can also provide a price signal that informs the customer on conservation and investment choices; and WHEREAS, While effective rate designs reflect the costs incurred to provide reliable service throughout the year, there is no one optimal rate design approach; and WHEREAS, Multiple issues arise from, among other things, revenue requirement determinations, cost allocations, application of declining or inclining blocks, time-of-use and seasonal rates, monthly fixed or usage-related charges, differences between residential and commercial rates, and special treatment of certain customers, e.g., low-income or electric vehicle owners, and economic development rates; and WHEREAS, The continued expansion of advanced metering makes data available to better match costs to causation, with the potential to provide customers with more meaningful price signals than were previously available, as outlined in a 2015 RAP publication Smart Rate Design for a Smart Future; and WHEREAS, In the electric industry, the rapid growth of distributed generation is triggering both legislative and regulatory proposals for additional changes in rate designs, with an October 2015 National Regulatory Research Institute (NRRI) publication, Rate Design for DER, cataloging over 100 pending proposals and recently adopted rate design changes in 43 States and the District of Columbia; and WHEREAS, NRRI s report outlines proposals involving, among other things, raising fixed charges, using demand-charges for residential and small commercial customers, developing higher minimum monthly bills, changing net-metering rules, using time-differentiated rates, changing standby charges, using tiered- or block-rate structures, and proposing various alternatives to netmetering, such as feed-in tariffs, two-way rates, or value-of-service rates; and WHEREAS, The Federal Energy Regulatory Commission has issued a Notice of Proposed Rulemaking (Docket No. RM15-24) to specifically address reforms in regional transmission organizations and independent system operators that would align prices with resource dispatch instructions and operating needs, providing incentives for resource performance that could provide State Commissions additional options for rate designs for electric retail customers; and WHEREAS, Given the proliferation of these issues facing State Commissions and the breadth of available rate design alternatives, there is a need for a forum for regulatory staff to discuss the 5
many rate design approaches, experiences, ideas, and their connection to cost causation and the development of appropriate price signals; and WHEREAS, Regulators would benefit from a work product that identifies a range of options and makes available scholarly articles, consultancy reports, national laboratories efforts, think tank proposals, and other substantive approaches to rate designs that can be tailored to State needs and useful in adopting revised rate design methods; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, hereby creates a new Staff Subcommittee on Rate Design to focus solely on rate design approaches and experiences; and be it further RESOLVED, That the Staff Subcommittee on Rate Design will report directly to the NARUC Executive Committee; and be it further RESOLVED, That the Staff Subcommittee on Rate Design may include participating staff from the Electricity, Natural Gas, Water, Energy Resources and the Environment, and Consumer Affairs Committees; and be it further RESOLVED, That the Staff Subcommittee on Rate Design will not meet as a Standing Staff Committee at national meetings, but rather will organize itself to meet via regularly scheduled conference calls, webinars and other means, and will undertake necessary education and discussion, with the ultimate aim of developing a work product that identifies range of options and makes available scholarly articles, consultancy reports, national laboratories efforts, think tank proposals, and other substantive approaches to rate designs that may be tailored to State needs and useful in adopting revised rate design methods. Sponsored by the Committee on Electricity and the Committee on Energy, Resources and the Environment Recommended by the NARUC Board of Directors November 10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 6
GS-1 Resolution on Establishing Additional PHMSA Pipeline Safety Training Facilities WHEREAS, Domestic gas and oil production is increasing rapidly as a result of improved development technologies; and WHEREAS, Numerous new pipelines have been recently built and many more are in the planning or construction phases in order to deliver this additional production to market; and WHEREAS, Several significant pipeline accidents in recent years have prompted the Pipeline and Hazardous Materials Safety Administration s (PHMSA) Office of Pipeline Safety to promulgate additional pipeline safety rules, which require additional training for State pipeline safety personnel, thereby, straining existing federal training resources; and WHEREAS, Many States have implemented programs to accelerate the replacement of cast iron and bare steel distribution pipelines, with a commensurate increase on the demands of State inspector responsibilities; and WHEREAS, The States are responsible to oversee and enforce operators compliance with federal pipeline safety regulations for approximately 80 percent of the pipelines in the United States, and rely on training provided by PHMSA in order to so; and WHEREAS, Many States have hired, or anticipate hiring, new pipeline safety inspectors to keep up with the increased demand caused by new pipelines; and WHEREAS, Training these new inspectors in a timely manner is necessary to ensure the safe delivery of natural gas to end-use customers, as well as to protect the safety and well-being of the general public; and WHEREAS, PHMSA operates a single gas and hazardous material training facility for the entire nation, located in Oklahoma City, Oklahoma; and WHEREAS, PHMSA s certification process for State inspectors requires extended training over a period ranging between three to five years as a result of the State inspector having to attend up to 25 one-week courses as a necessary prerequisite to receiving full certification by PHMSA; and WHEREAS, There is a steadily growing backlog for admission to the State inspector training program of one to two years; and WHEREAS, It is essential for PHMSA to develop new training centers to meet the States need for qualified safety inspectors; and WHEREAS, The establishment of additional regional training facilities would minimize or eliminate costly air travel for many participating State and federal inspectors, thereby allowing scarce monetary resources to be more fully devoted to inspecting pipelines; and WHEREAS, New regional facilities would be open to all regions of the country and allow for increased flexibility and course offerings; now, therefore be it 7
RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, urges the United States Congress to direct PHMSA to establish additional, regionally-located pipeline safety training facilities and to authorize and appropriate all necessary funds for said facilities. Sponsored by the Committee on Gas Recommended by the NARUC Board of Directors November 10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 8
GS-2 Resolution Calling for Congressional Action on Pipeline Safety Reauthorization Act WHEREAS, Robust pipeline safety laws are essential to protect the citizens of this country and maintain the integrity of the United States natural gas transmission and distribution networks; and WHEREAS, The National Association of Regulatory Utility Commissioners (NARUC) has a long history of supporting strong pipeline safety laws both at the State and national level; and WHEREAS, The proliferation of new pipelines due to increased gas and oil exploration and production, and the need to replace aging, at-risk distribution infrastructure requires an increased emphasis on pipeline safety; and WHEREAS, Reauthorization of the Pipeline Safety Act is currently being debated by Congress; and WHEREAS, On July 14, 2015, NARUC Gas Committee Chairman Stan Wise presented testimony to the U.S. House Energy & Commerce Committee, available online at: http://energycommerce.house.gov/hearing/oversight-pipeline-safety-regulatory-certainty-and-jobcreation-act-2011-and-related-issues, calling for new pipeline safety amendments that are supported by NARUC member States and the National Association of Pipeline Safety Representatives; and WHEREAS, NARUC has worked with the Department of Transportation s Pipeline and Hazardous Materials Safety Administration and industry stakeholders to aggressively advocate for accelerated at-risk pipeline replacement programs through benchmarking and distribution improvement funding mechanisms; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, encourages Congress to include the previously approved NARUC gas safety amendments appended to Commissioner Wise s July 14, 2015, testimony, in any pipeline safety reauthorization legislation that is considered. Sponsored by the Committee on Gas Recommended by the NARUC Board of Directors November 10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 9
WA-1 SER-1 Resolution Celebrating the 50 th Anniversary of the Institute of Public Utilities at Michigan State University, and Its Contributions to NARUC WHEREAS, The National Association of Regulatory Utility Commissioners (NARUC) has a longstanding commitment to expanding educational opportunities for regulatory Commissioners and the professional staff of the State and federal utility regulatory agencies; and WHEREAS, Education plays a vital role in informing regulators and improving the quality and effectiveness of regulation; and WHEREAS, The Institute of Public Utilities (IPU) was established at Michigan State University in 1965; and WHEREAS, IPU has served NARUC with dedication and distinction throughout its 50-year history; and WHEREAS, IPU s core mission is to support informed, effective, and efficient regulation of essential public utility services; and WHEREAS, IPU provides NARUC members and the regulatory policy community with applied research and continuing education opportunities; and WHEREAS, IPU s professional development programs are thoughtfully designed to meet the educational needs of NARUC members, earning endorsement of NARUC s Subcommittee on Education and Research; and WHEREAS, IPU has provided basic, intermediate, and advanced educational programs to thousands of regulatory commissioners and professionals from the United States and around the world; and WHEREAS, IPU has sponsored the unique Annual Regulatory Studies Program, known affectionately as Camp NARUC since 1972; and WHEREAS, IPU serves as the University host of the NARUC Utility Rate School, sponsored by the Committee on Water since 2003; and WHEREAS, IPU sponsors the Certificate of Continuing Regulatory Education on NARUC s behalf; and WHEREAS, 2015 marks the 50 th Anniversary of the IPU at Michigan State University; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, honors and celebrates the 50 th Anniversary of the Institute of Public Utilities and extends NARUC s appreciation to the Institute of Public Utilities and Michigan State University for it s stewardship of and dedication at this historic milestone. 10
Sponsored by the Committee on Water and the Subcommittee on Education and Research Recommended by the NARUC Board of Directors November10, 2015 Adopted by the NARUC Committee of the Whole November11, 2015 11
TC-2 Resolution to Accelerate the Deployment of Next-Generation (NG) 911 Systems WHEREAS, In January 2015, the Federal Communications Commission (FCC) established a Task Force on Optimal PSAP Architecture (TFOPA) to examine the transition from legacy 911 to Internet Protocol enabled 911 systems, i.e., so-called Next-Generation 911, or NG911; and WHEREAS, Although funding of and jurisdiction over 911 systems remains fundamentally an issue for local and State governments, the FCC and other agencies, such as the National 911 Program lodged with the Department of Transportation s National Highway Transportation Safety Administration (NHTSA), have a key role to play in both providing a national vision for the NG911 transition and targeting federal NG911 grants to State and local governments; and WHEREAS, The New and Emerging Technologies Improvement Act of 2008, Public Law 110-283 required the FCC to collect information from States, Public Safety Answering Points (PSAPs), and Local Governments on NG911 transition plans and note any diversions of 911 fees by a State Legislature, and also required the FCC to submit a report on its findings to Congress annually in December; and WHEREAS, The September 2013 NARUC Federalism Task Force Report: Cooperative Federalism and Telecom in the 21 st Century noted, among other things that: States, the FCC, and service providers should work together to ensure that all consumers can access emergency services (i.e., 911, E911, and NG911) regardless of the technology used to carry calls. ; and WHEREAS, State and local fees to support 911 networks vary widely, though a hybrid system of 911 fee assessments is the most common, e.g., a combination of a statewide fee with a county or metropolitan fee; and WHEREAS, The TFOPA established three Working Groups to assess the current state of the transition to NG911 across multiple jurisdictions: Working Group 1 on Cybersecurity; Working Group 2 on the Optimal PSAP Architecture; and, Working Group 3 on Funding and Resource Allocation (WG3); and WHEREAS, WG3 completed its report on September 28, 2015, on the state of 911 fees and resource allocations and it was adopted by the TFOPA for inclusion in its final reports; and WHEREAS, That report concludes that current fee collections mechanisms are outmoded given current and future technological changes, and are in dire need to be modernized to be more equitable, consistent, and sustainable, and that the system of fee collection and allocation of expenditures for 911 systems is breaking down at the same time the nation is aggressively looking to deploy Next-Generation 911 systems ; and WHEREAS, The report recommends that the accuracy of 911 data received by the FCC for inclusion in the annual Net 911 Act Report to Congress must be improved; and 12
WHEREAS, The report recommends broadly that more effective mechanisms for coordination at State and regional levels be developed to accelerate the timely and cost-effective transition to NG911 systems; and WHEREAS, The report recommends over-arching policies and principles for all jurisdictions to facilitate the NG911 transition, such as being sustainable, predictable, and stable, and being technology and competitively neutral ; and WHEREAS, The report recognizes that targeted NG911 Federal grants to State and local government is an effective way to accelerate the transition, e.g., the existing NHTSA s National 911 Program grants, and proposed NG911 grants taken from FCC incentive spectrum auctions proceeds; and WHEREAS, The WG3 Report cites to an August 2015 speech by FCC Chairman Wheeler in which the Chairman discussed federal legislation to create a new FCC grant program to provide matching funds to help PSAPs migrate to efficient NG911 ESI-Nets and shared platforms and to direct the FCC to help States develop effective audit tools to ensure appropriate collections and expenditures of 911 fees, and prevent the diversion of such revenue for non-911 issues; and WHEREAS, The WG3 Report assesses at a high level the priority funding alternatives for a sustainable 911 funding system, and specifically calls for more detailed consideration of a potential network connection fee on upstream bandwidth, and for tightening collections from certain pre-paid wireless services at the retail point-of-sale; and WHEREAS, The WG3 Report recommends the FCC establish a new Local State Government Advisory Committee on 911 to continue the work initiated by WG3, create a core cadre of technical 911 experts from across the country to continue to assess these issues in more detail, and provide recommendations to the FCC and other Federal Agencies; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, endorses these recommendations of the Working Group 3 Report of the Task Force on PSAP Architecture, and urges the FCC to give serious consideration of all the recommendations contained in that report; and be it further RESOLVED, That NARUC specifically endorses Chairman Wheeler s proposal for the FCC to work with Congress to utilize future spectrum proceeds to provide funding to States, local governments, and/or PSAPs, to accelerate the transition to Next-Generation 911 networks. Sponsored by the Committee on Telecommunications Recommended by the NARUC Board of Directors November 10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 13
TC-3 Resolution to Expedite Availability of Remote Areas Funding and Connect America Funding to Unserved and Underserved Areas Where Carriers Have Not Accepted Funding WHEREAS, In 2011, the FCC created the Connect America Fund within the Universal Service Fund high-cost program; and WHEREAS, The Connect America Fund is intended to ensure that advanced voice and broadband services are available throughout the nation, with a special focus on high-cost areas; and WHEREAS, In the same 2011 Report and Order which launched the Connect America Fund, the FCC also created a Remote Areas Fund for extremely high-cost areas, with a targeted initial amount of $100 million annually; and WHEREAS, Both Funds are designed to ensure that consumers in rural, insular, high-cost, and extremely high-cost areas have access to modern communications facilities providing voice and broadband services, both fixed and mobile, at rates reasonably comparable to those in urban areas; and WHEREAS, As of this writing, the FCC has authorized ten telecommunications carriers to receive nearly $9 billion in support over six years to deploy rural broadband; and WHEREAS, Together with designated carrier contributions, the Connect America Fund will support extension of broadband facilities and service over the duration of the program to nearly 7.3 million rural consumers in 45 States nationwide and one U.S. territory; and WHEREAS, FCC Chairman Wheeler has recognized the urgent need to address the challenges of providing next generation telecommunications services to the most remote regions of the country, and has pledged that the FCC will develop rules by the end of 2015 for competitive bidding for those areas where the incumbent carrier has declined to accept Connect America Funding; now, therefore be it RESOLVED, That the National Association of Regulatory Utility Commissioners, convened at its 127th Annual Meeting in Austin, Texas, strongly supports the objectives of the Connect America Fund and its Remote Areas Fund component, and urges the FCC to move as quickly as possible to implement the competitive bidding process for the Connect America Fund Phase II (CAF II) and Remote Area Fund in order to ensure the timely availability of broadband facilities and services to the CAF II defined and more remote areas of the nation, including tribal regions, where incumbent carriers have declined support from the CAF II, and in remotes areas. Sponsored by the Committee on Telecommunications Recommended by the NARUC Board of Directors November10, 2015 Adopted by the NARUC Committee of the Whole November 11, 2015 14