-----Original Message-----
From: Holt, Rob [mailto:Rob.Holt@nreca.coop]
Sent: Friday, November 16, 2012 11:24 PM
To: Holt, Rob
Subject: Glenn English - A Few Things (November 16)

MEMORANDUM

November 16, 2012

TO:      Statewide Managers
G&T Managers
NRECA Board of Directors

FROM:            Glenn English, Chief Executive Officer

A few things I wanted to share with you...

Congress and the President opened negotiations this week in an attempt to reach agreement to address the "fiscal cliff" before
January, when dozens of tax cuts expire and large spending cuts (also known as sequestration) take effect under the 2011 Budget
Control Act.  The President met with House and Senate leaders today and Democrats and Republicans expressed hope about reaching an
agreement to avoid the fiscal cliff in early January.  There is still a possibility that Congress will pass legislation to push the
deadline for automatic spending cuts until later next year to allow more time for negotiations.

As a result of the intense focus on the fiscal cliff, there are shrinking odds for passing major legislation addressing other key
issues in the remaining weeks of this "lame-duck" Congress.  While House and Senate Agriculture leaders are pushing for passage of a
full five-year farm bill reauthorization this year, some quietly acknowledge that a one-year bill or short-term extension seem more
likely.  Electric co-op provisions in this five-year bill include re-establishing Rural Utilities Service baseload lending, ensuring
environmental reviews are not necessary for simple paper transactions and Rural Energy Savings Program Act authorization.

We expect fiscal issues to continue dominating the short- and medium-term political discussion, as the federal government wrestles
with the fiscal cliff, another debt limit debate early next year, expiration of the current continuing resolution funding the
government until March 27, and the complex task of "tax reform."

The House and Senate are in recess next week for the Thanksgiving holiday.  Congress reconvenes November 26.  I will send "A Few
Things" again on November 30.

New Lawmakers Start Orientation, House and Senate Organize for 113th Congress

With several House races yet undecided or in recount, Republicans hold a majority of 234 seats and Democrats have 198 seats.  The
Senate breakdown is 55-45, with the majority held by 53 Democrats and two Independents caucusing Democratic.  New House members (84
at last count) and 12 new senators were on Capitol Hill this week for orientation and caucus reorganization.  NRECA cosponsored and
participated in the Congressional Management Foundation's orientation workshop for the incoming chiefs-of-staff of new House
members.  NRECA is also closely watching the changes in Senate and Democratic leadership teams and the top committee seats.  The
caucus leadership elections brought a few changes, with electric cooperative supporters among the new faces in key posts.

Changes in the House include Rep. Cathy McMorris Rodgers (R-WA) being elected Republican Conference chairwoman - the fourth-ranking
leadership spot.  She won out over Rep. Tom Price (R-GA), another electric co-op supporter.  House Speaker John Boehner (R-OH) named
Rep. Greg Walden (R-OR) as National Republican Congressional Committee chairman.  Notable among the House chairmanship assignments,
Natural Resources Chairman Doc Hastings (R-WA) will keep his post.  Rep. Pete Sessions (R-TX) will take the House Rules
chairmanship.  Budget Committee Chairman Paul Ryan (R-WI) received a waiver to the Republican term limit rule to hold that post.
Homeland Security Chairman Peter King (R-NY) was told no other waiver requests will be granted.  There was no announcement on who
will take over that committee.

In the Senate, Sen. Patty Murray (D-WA) will be Budget Committee chairwoman.  Sen. Ron Wyden (D-OR) will be Energy and Natural
Resources chairman.  Some ranking members must relinquish their posts and take a senior member seat under the Republicans' term
limits rule for committee leaders.  Under these rules, Sen. David Vitter (R-LA) will become ranking member on the Environment and
Public Works Committee, replacing Sen. James Inhofe (R-OK).  Sen. Inhofe is expected to become the Armed Services Committee's
ranking member in place of Sen. John McCain (R-AZ).  Sen. Jim DeMint will likely be ranking member of the Commerce, Science and
Transportation Committee with the retirement of Sen. Kay Bailey Hutchinson (R-TX).  There are rumors that Sen. Thad Cochran (R-MS)
will challenge Sen. Pat Roberts (R-KS) for ranking member on the Agriculture Committee.  Sen. Cochran is at the term-limit as Senate
Appropriations ranking member and Sen. Richard Shelby (R-AL) is likely to take that post.  Caucus leadership changes for Republicans
include Sen. John Cornyn (R-TX) as Minority Whip, the number two slot, to replace retiring Sen. Jon Kyl (R-AZ).

White House Confirms Cybersecurity Order Signed; Senate Push on Legislation Fails

The Administration confirmed on Wednesday the President has already signed a classified executive order on guidelines for some
federal agencies and military to conduct defensive and pre-emptive cybersecurity operations.  The White House has not released the
order to the public, but said the President signed it in October.  This directive updates a 2004 order, but does not give any new
authorities to federal agencies, the Administration said.  "The directive establishes principles and processes for the use of cyber
operations so that cyber tools are integrated with the full array of national security tools we have at our disposal," an official
told the media.  This may be a separate order from the draft Executive Order leaked last month, which attempted to set new
responsibilities for agencies interacting with the private sector on cybersecurity.

Within hours of that news, Senate cybersecurity legislation proponents were dealt a major defeat when they moved for a procedural
vote on invoking cloture to get the Cybersecurity Act of 2012 (S. 3414) to the floor for debate.  The Senate rejected the bill on a
51-47 vote, far less than the 60 needed.  Afterward, Senate Majority Leader Harry Reid (D-NV) said "cybersecurity is dead for this
Congress."  Opponents said there was no agreement on potential amendments to resolve differences.  NRECA was working within a broad
electric power sector coalition for potential amendments addressing utility concerns with the bill.  S. 3414 would impose new
mandates and failed to recognize that the electric and nuclear sectors are already subject to mandatory, enforceable standards for
physical and cybersecurity.  It also would have given other sectors, such as banking or telecom, expanded access to security
clearances and threat information.  Senate Minority Leader Mitch McConnell (R-KY) yesterday said he hoped to work on cybersecurity
legislation again in December in the context of the Defense authorization bill.  Leader Reid has not publicly responded to his
statement.

Energy Dept. to Propose New Process for SWPA, WAPA Transmission Financing

Energy Department officials are initiating a discussion to solicit stakeholder feedback on the implementation of Section 1222 of the
2005 Energy Policy Act.  Section 1222 gives the Secretary of Energy authority, acting through the Western Area Power Administration
(WAPA) and Southwestern Power Administration (SWPA) to partner with non-customer groups to develop transmission projects within
their systems.  NRECA attended an Energy Department-sponsored meeting on this issue in Baltimore, Md., where the National
Association of Regulatory Utility Commissioners' annual meeting was held.  During the event, the agency received attendee thoughts
on potential changes to the Section 1222 application process aimed at providing more clarity and opportunity for public input and
expanding the level of transparency with rate-payers and other stakeholder groups.  Comments from the audience centered around
concerns about top-down federal encroachment into state decision-making processes related to transmission siting.  NRECA's members
have expressed concern about the Energy Department's implementation of Section 1222 and we will be monitoring this process closely
going forward.

The Energy Department and SWPA will hold another stakeholder meeting on Section 1222 implementation at the Tulsa Hyatt Regency in
Tulsa, OK, on Thursday, November 29, at 9 a.m.  You must register to attend the meeting by sending an e-mail to
1222@doe.gov<mailto:1222@doe.gov> with "Tulsa workshop" in the subject line and providing your full name, organizational
affiliation, title, phone number and e-mail address.  If you cannot attend this meeting to provide feedback, written comments can be
e-mailed to 1222@doe.gov<mailto:1222@doe.gov>.

New OSHA Rule Revises Limited Exemption for Electric Utility Digger Derricks

The Occupational Safety and Health Administration (OSHA) published a new direct final rule on November 9 that revises an exemption
for most, but not all, electric utility digger derrick operations from new training and certification requirements that take effect
November 14, 2014.  This latest rulemaking adds use of digger derricks for "pad mount transformer placement" in the electric utility
construction exemption.  This direct final rule takes effect February 7, 2013, unless OSHA receives significant adverse comment by
December 10, 2012.  If that happens, the agency would withdraw the direct final rule and publish the revision as a proposed rule.

While this is good news, it is important to remember that the electric utility digger derrick exemption is very narrow and limited
to electric utility construction.  OSHA says, ".employers cannot use digger derricks within this exemption to perform unrelated
tasks such as the construction of a building or the foundation or structural components of a substation....  A digger derrick used
for this type of construction will still be subject to the requirements in 29 CFR 1926 subpart CC, and operators will have to be
certified.."  This new direct final rule is not a blanket electric co-op exemption from the cranes and derricks rule.  Much of the
cranes and derricks rule will still apply to electric utilities, because they have a unique dual role as both users of cranes and
derricks and owner/operators of facilities impacted by the rule.  See the direct final rule at
http://www.gpo.gov/fdsys/pkg/FR-2012-11-09/pdf/2012-27210.pdf.  If you have questions, contact Martha Duggan, Senior Principal
Regulatory Issues, at martha.duggan@nreca.coop<mailto:martha.duggan@nreca.coop>.

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