-----Original Message-----
From: Holt, Rob [mailto:Rob.Holt@nreca.coop]
Sent: Friday, July 08, 2011 3:31 PM
To: Holt, Rob
Subject: Glenn English - A Few Things (July 8)

MEMORANDUM

July 8, 2011

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...

Negotiations on raising the debt ceiling dominated congressional action
during this unusual and short week of legislative business.  The pressure is
rising on both Republicans and Democrats as the August 2 deadline to pass
legislation draws closer.  After the Senate skipped its traditional recess
this week, today the House announced the cancellation of its recess planned
for the week of July 18.  Any eventual deal - even if only a stopgap measure
- will include spending cuts aimed at reducing the budget deficit.  With all
federal programs being reviewed for potential cuts, we are closely watching
these talks to protect core electric cooperative programs in this battle.
Though debt ceiling and deficit reduction discussions are draining the
momentum for other legislation, House Republicans continue to use their
majority to move other legislation, especially all 12 annual appropriations
bills.  The House has passed its Agriculture, Homeland Security and
Defense/Veterans Affairs spending bills.

House Interior-EPA Spending Bill includes Riders on Environmental
Regulations

The House Appropriations Interior and Environment Subcommittee voted 8-5 to
approve an FY12 Interior-Environment Appropriations bill that cuts EPA
funding 18 percent below last year's funding.  The bill has several
provisions, called "riders," aimed at limiting EPA's regulatory agenda.
Reps. Steve LaTourette (R-OH) and Steve Austria (R-OH) pushed for language
prohibiting funds for defining coal ash as hazardous waste.  The measure
includes language from a bill (H.R. 872) the House passed last March that
would clarify congressional intent on the dual regulation of pesticides near
navigable waterways.  Other provisions aimed at limiting EPA regulation
include a one-year prohibition on regulation of stationary source greenhouse
gas emissions.  It would also exempt certain agricultural activities from
greenhouse gas emissions reporting and prohibit EPA from redefining
"navigable waterways" under the Clean Water Act.

The bill also includes language that would block the U.S. Fish and Wildlife
Service from using FY12 funding to pursue new Endangered Species Act
listings.  The bill is listed for markup by the full Appropriations
Committee next week.  While the House is likely to pass the bill with many
of these provisions, the Senate is likely to reject most, if not all,
environmental riders.  Similar riders the House added to the FY11 omnibus
appropriations bill were dropped during negotiations with the Senate before
final passage in April 2011.  More restrictions are expected to be added as
the House moves the FY12 Interior-Environment spending bill.
House Energy and Water Development Appropriations Bill Moves to Floor Debate

The House started floor debate on FY12 Energy and Water Development
appropriations bill (H.R. 2354) and will continue that debate next week.
While we have not heard of any proposals to defund Power Marketing
Administrations or restructure them to sell federal hydropower at
market-based rates, we are watching closely for any potential amendments
that would result in cuts in core electric cooperative programs.

House Committee Lists Coal Ash and EPA Regulation Bills for Action

The House Energy and Commerce Committee scheduled a markup this coming
Monday and Tuesday for the Coal Residuals Reuse and Management Act (H.R.
2273) and Transparency in Regulatory Analysis of Impacts on the Nation
(TRAIN) Act (H.R. 2401).  H.R. 2273 is a new version of a bill introduced
earlier this year by Rep. David McKinley (R-OH).  The new version, unveiled
two weeks ago, specifically directs that coal ash be treated as
non-hazardous material instead of prohibiting EPA from regulating it as
hazardous.  H.R. 2401 was approved by the House Energy and Power
Subcommittee today.  H.R. 2273 was approved by the House Environment and
Economy Subcommittee on June 21.  The full committee is expected to report
both bills to the House floor, where passage is expected.  However, both
measures will be hard to pass in the Senate.

More Senate Action on Rural Energy Savings Legislation Possible Next Week

A Rural Energy Savings Program bill could come up for a Senate Agriculture
Committee hearing as early as next week.  Sen. Jeff Merkley (D-OR) is
putting the final touches on a draft bill.  His draft is similar to
bipartisan legislation the House passed last year. It would create a program
that allows electric co-ops to borrow from the Rural Utilities Service to
make low-cost loans to consumers for efficiency improvements.  An efficiency
bill (S. 1000) introduced by Sens. Jeanne Shaheen (D-NH) and Rob Portman
(R-OH) earlier this year also includes a Rural Energy Savings section, as
does the "Practical Energy Plan" bill (S. 1321) Sen. Richard Lugar (R-IN)
introduced last week.  As of today, at least one electric co-op official,
Indiana statewide CEO Bruce Graham, is invited to testify at this hearing.

STB Sets Cap on Rate Case Filings at $350, Decision Lowers Hurdle for Rail
Shippers

In a win for captive rail shippers, the Surface Transportation Board (STB)
issued a final rule to cap rate case filing fees at $350.  The decision,
effective immediately, lowers the cap from $20,600.  This is among freight
railroad reforms that NRECA has actively pursued.  During a Senate Commerce,
Science and Transportation Committee hearing last September, STB Chairman
Daniel Elliott III pledged to review the issue.  Go to
http://www.stb.dot.gov/__85256593004F576F.nsf/0/00557FD525743BB2852578C60054
9448?OpenDocument.

EPA Issues Final Interstate Emissions Regulation as Cross-State Air
Pollution Rule

EPA released its long-anticipated final interstate emissions rule for power
plants in 27 Eastern and Midwestern states, but with a new name.  The
Cross-State Air Pollution Rule replaces the Clean Air Transport Rule
proposed in 2010.  EPA officials said the proposed name caused confusion.
The final Cross-State rule becomes final 60 days after it is published in
the Federal Register, which is expected in the next couple of weeks.  By
2014, the rule requires 73 percent reductions of sulfur dioxide (SO2)
emissions and 54 percent reductions of nitrogen oxides (NOx) emissions from
2005 levels from power plants in the affected states.  This rule replaces
the 2005 Clean Air Interstate Rule issued during the Bush Administration,
which a federal appellate court struck down and sent back to EPA in December
2008.  See the final rule at http://www.epa.gov/crossstaterule.

EPA Delays Regulation of Biomass GHG Emissions for Additional Analysis

EPA announced a final rule giving biomass energy facilities a three-year
deferral from stationary source greenhouse gas (GHG) emission regulations
that took effect on January 1, 2011.  The decision becomes official after
publication in the Federal Register and completes the process to incorporate
the deferral for biomass-fired and other biogenic sources into the GHG
regulations.  EPA said the deferral allows time for independent scientific
analysis on whether biomass GHG emissions should be regulated under the
Clean Air Act and how.  NRECA sent comments in support of the deferral and
analysis on May 5, 2011.

This is a positive step in our efforts to get a permanent exemption for
bioenergy-related emissions.  As NRECA stated in its September 2010 comments
on this issue, including biomass plants in the GHG rule resulted in an
electric co-op biomass project being shelved.  While a step in the right
direction, the delay creates continued uncertainty for utilities considering
biomass generation investments.  See the biomass rule notice at
http://www.epa.gov/nsr/documents/Biogenic_Deferral_pre-pub.pdf.

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