public power magazine - jan/feb 2016

Loca

llylyl Grown

Locally Owned Public Power page 8

Cybersecurity Through Collaboration page 18

Cautiously Preparing for the Clean Power Plan page 26

PUBLIC POWER

AMERICAN PUBLIC POWER ASSOCIATION •JANUARY/FEBRUARY 2016

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2 Public Power / January-February 2016

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EDITORIAL TEAMJoe NipperSenior Vice PresidentRegulatory Affairs & Communications

Meena DayakVice PresidentIntegrated Media & Communications

Paul CiampoliNews Director

Jeannine AndersonNews Editor

Laura D’AlessandroIntegrated Media & Communications Editor

Robert ThomasCreative Director

Sharon WinfieldLead Designer, Digital & Print

Samuel GonzalesDirector, Digital & Social MediaDavid Blaylock Manager, Integrated Media

Mary Rufe Director, Information Services

Tobias Sellier Director, Media Relations & Communications

Maria Valatkaite Integrated Media & Communications Coordinator

INQUIRIES

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Advertising for APPA publications is managed by Naylor LLC. Public Power (ISSN 0033-3654) is published six times a year by the American Public Power Association, 2451 Crystal Drive, Suite 1000, Arlington, VA 22202-4804. © 2016, American Public Power Association. Opinions expressed in articles are not policies of the association. Periodical postage paid in Arlington, Va., and additional mailing offices.For permission to reprint articles, contact [email protected].

4 Public Power Lines by Sue Kelly

32 Public Power Forward

33 Washington Report

34 Going Public

35 Security

36 Last Word

8 Buying LocalCommunities are mobilizing to take ownership of their electric distribution assets and create public power utilities.

16 Captain Public Power to the RescueLearn how to keep your utility strong to avoid the risk of a sellout.

18 Securing the FoundationProtecting the grid is an ever-evolving challenge, but public power utilities are part of a collaborative effort to continually strengthen cybersecurity.

24 Infographic: Defending the CastleFind out who is guarding the grid in this list of its Washington defenders.

26 Proceed with CautionMany variables still surround compliance with the EPA’s Clean Power Plan and public power utilities are cautiously preparing.

FEATURES

The Innovation Issue

COLUMNS

Loca

llylyl Grown

AMERICAN PUBLIC POWER ASSOCIATION •NOVEMBER/DECEMBER 2015

CONT ENT S

#PublicPower @PublicPower.org

Search for American Public Power and connect with us

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It leverages the Sensus FlexNet® communication network to enable a

powerful platform that transforms a passive streetlight into a critical hub

for a host of smart city applications. Sensus also provides the software

to not only monitor and control lighting, but also give you better insight.

That way you can optimize system performance and be more efficient

with your operations. So, as you can see, the future is not only bright,

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IIt’s not uncommon on restaurant menus today to see where the ingredients in your meal are coming from: beets dug from a family farm in Virginia, pork pastured on a green field in South Carolina, blueberries from wild bushes in Maine. That menu might even tell you how many miles your food traveled to your plate, and the growing trend seems to be the closer the better. “Buy Local” is the buzz phrase — and those who do are called “locavores.” Maybe buying local should also be considered when it comes to power.

Public power seems to be gaining in popularity, or at least gaining attention. Some communities in the U.S. are making an effort to buy their distribution systems and run their own utilities, although the resistance from incum-bent utilities has been stiff to say the least. Our business model is appealing — local decision-making, local jobs, and revenue that is pumped back into the community. It’s no surprise that as the buy local trend grows, so does the number of towns looking to go public with their power. Read more about communities interested in taking ownership of their utility on page 8.

Public power is in close to 2,000 cities and towns and serves 48 million people. If your customers experience an outage, they call you, a member of their community. And while the idea is gaining traction in communities throughout the country, many of our own customers don’t know the value of the utility they have in their own towns and cities. It’s our job at the American Public Power Association to help you tell your customers, your communities and the world the public power story.

Raising awareness of public power is one of six focus areas in APPA’s 2016–2018 strategic plan. The industry is changing, and that change is driven by technology and regulations that will impact your customers. Amidst this change, public power customers need to know the value

Homegrown Makes a DifferenceBy Sue Kelly • President & CEO, American Public Power Association

Public Power Lines

@CEOPublicPower • blog.publicpower.org

they’re getting through their community-owned utility. Check out the Buying Local infographic on page 12 and

share it with your customers.Another strategic priority APPA will be working on

in 2016–2018 is addressing increased federal regu-lation of public power utilities. A prime example of this is the U.S. Environmental Protection Agency’s

Clean Power Plan, a plan to limit carbon dioxide emissions from existing power plants. In 2015, APPA staff labored long to provide comments to the EPA on its proposed regulations, which would have imposed drastic requirements on many APPA members.

When the final regulations came out in August 2015, the EPA had improved a number of its provisions. But the final rule is still challenging for many of our members, and in fact will be harder for some of them to meet than the first proposal. While APPA supports the need to lower CO2 emissions, we are concerned that the EPA’s plan still tries in many states to do too much, too fast. The ultimate outcome will be an adverse impact on electricity costs for a substantial number of APPA members.

But in the meantime, our members have to be prepared

to help their states comply. You can read about how three very different public power utilities are gearing up to comply with EPA’s final regula-tions on page 26.

The public power business model strives to deliver low-cost, reliable power while practicing good environmental stewardship. I’ve been rep-resenting community-owned utilities for more than three decades now and I believe in the mission of our members.

I hope you, as a member of your own public power community, ap-preciate and support your homegrown utility and know that you make a difference every day. We need to tell our story to our customers and fellow-citizens, so they know that too. n

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TRAINING: TECHNICAL, ACCOUNTING, CUSTOMER SERVICE Winter Education Institute, Feb. 8 – 12, Orlando, FloridaSend staff at every level to earn CEUs, PDHs and CPEs, while receiving hands-on training from experts in accounting, cost of service and retail rate design, customer service management, distributed generation rate design, overhead distribution systems, and pole line design.

LEADERSHIP NETWORKINGCEO Roundtable, Feb. 21 – 24, Phoenix, ArizonaJoin CEOs, general managers, and senior executives from other public power utilities for peer networking in an exclusive small group setting — registration is limited to 75 executives. Learn to think outside the box, gain insight into key challenges facing the industry, and gear up for success.

POLICY AND ADVOCACYLegislative Rally, March 7 – 9, Washington, D.C.Come and meet with your members of Congress and brief them on issues that impact you. Hear from experts on energy legislation, environmental policy, threats to tax-exempt financing, grid security, distributed generation, the Power Marketing Administrations, telecommunications, and more.

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LINEWORKER SKILLSPublic Power Lineworkers Rodeo, April 2, Minneapolis, MinnesotaEarn national and local attention by sending your lineworkers to demonstrate their skill, compete for professional honors, and network with peers. The Rodeo receives significant social media attention, motivates participants, and celebrates their hard work. Safety training is at the top of the agenda.

OPERATIONSEngineering & Operations Technical Conference, April 3 – 6, Minneapolis, MinnesotaLearn from the experts and network with your engineering peers to recharge and refresh your skills. Discover the latest and greatest in communications and control, environmental, generation and fuels, safety, supply management, system planning, and transmission and distribution.

TRAINING: TECHNICAL, ACCOUNTING, ENERGY EFFICIENCY, MANAGEMENTSpring Education Institute, May 2 – 6, San Antonio, TexasGet hands-on training from experts in accounting, cost of service and retail rate design, energy efficiency and public power management. The Energy Efficiency Management Certificate Program will feature all new content and is being developed in partnership with the Vermont Energy Investment Corporation.

LEADERSHIP, ECONOMY, TECHNOLOGYNational Conference & Public Power Expo, June 10 – 15, Phoenix, ArizonaDon’t miss public power’s event of the year. Tune into the political, economic, and technological trends shaping electric utilities. Connect changes in the global and national energy landscape to your public power utility and prepare for the challenges and opportunities ahead.

WEBINARSLearn without leaving your deskElectric Utility 101 Series• Generation / Feb. 16• Substations / March 15• Transmission / April 13• Distribution / May 11

APPA Can Bring Courses to YOULet the best of the APPA Academy come to you. Our in-house training program can bring any of our popular courses to your facility or customize training for staff from any of your departments. We cover utility governance, engineering and operations, safety, accounting, customer service, and more.

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T O P - N O T C H L E A R N I N G A N D N E T W O R K I N G F O R U T I L I T Y P E R S O N N E LExecutive leadership • Legal • Accounting & finance • HR and training • Engineering & operations • Customer service • Key accounts • Energy services • PR & communications • Economic development

Register for all events and webinars at PublicPower.org/Events

Email: [email protected]

Phone: 202-467-2900


Buying Local


Whether they want a greener generation fleet or simply local control,

communities throughout the U.S. are mobilizing to take ownership of their electric distribution assets and create public power utilities. The journey is

long and not for the faint of heart, but communities that succeed believe public

power is worth fighting for.

By Elisa Wood, Contributing Writer

Buying Local


Communities must have a certain grit and determination to take ownership of their utili-ty services. It’s an often complicated, costly and lengthy process, likely to be prolonged by legal challenges from the serving utility.

“Ninety-nine percent of the time utilities will fight it and go to court unless they are willing sellers of the system, which is very unusual,” said Ursula Schryver, vice president of education and customer programs at the American Public Power Association.

Given these factors, it’s not surprising that from 2004 to 2014, only 12 new public power utilities were formed, Schryver said.

The numbers, however, do not tell the full story. Sometimes a community “wins” even though it doesn’t finish the process of forming a public power utility. Just a move by the com-munity toward taking ownership of its electric distribution system, known as municipalization, is a powerful tool, Schryver said. It can bring an investor-owned utility to the negotiating table. Once concessions are won, the community may no longer feel the need to form their own utility.

High-visibility public power campaigns are ongoing in various stages in several commu-nities, among them Bainbridge, Washington; Boulder, Colorado; Washington, D.C.; the Ha-waiian island of Maui; and even the state of California.

Profits and the peopleIn Washington, D.C., the push for public power heightened in mid-October in light of a merger proposed between the local investor-owned utility Pepco and Chicago-based Exelon. An organization called DC Public Power filed an intent to acquire Pepco’s assets within the district. The group said that public power could bring the electric ratepayers more than $1 billion in cost benefits over 20 years, and that those benefits come from one of the pillars of public power: putting power in the hands of

the community rather than a large, profit-seek-ing corporation.

“An investor-owned utility, such as Pepco, is rewarded for capital investments whether they are productive or not,” the organization said in announcing its proposal. “DCPP’s nonprofit model avoids this problem.”

Indeed, not-for-profit public power utilities often offer lower electric prices than their in-vestor-owned counterparts. Average residential rates for IOU customers were 14 percent higher than what public power customers paid in 2013, according to APPA data.

Reliability also is an issue for the District of Columbia, given its lack of local supply and reli-ance on imports to service its 1.5-gigawatt load. Only about 10 megawatts of dispatchable gen-eration and 7 MW of residential solar produc-tion operate within its borders, according to a report from DC Public Power. Such a generation mix, or lack thereof, left little recourse when the nation’s capital experienced an inconvenient — and embarrassing — widespread power outage in spring 2015 that included the U.S. Depart-ment of Energy.

Dynamic deregulationDCPP’s argument in favor of public power did not win the day with the Public Service Commission in the fall of 2015. DCPP’s petition was denied. But the organization is aware that creating a public power utility can be a long and arduous journey. The group said it isn’t quitting and is appealing the PSC decision.

DCPP also is proposing the bold step of de-regulating the district’s distribution grid, much the way several states opened retail electric mar-kets to competition. The new system would offer competitive pricing on the distribution system level with a district grid operator overseeing technical and inter-city transmission manage-ment among a series of competitive mini-grids.

“DCPP has come to the conclusion that the

electrical distribution model developed in the 1930’s no longer supports the required market dynamics for achieving goals that simply did not exist at the time of its conception,” the group said in a report.

The report goes on to lament that the District has prime access to “the most sophisticated and largest electricity market on the planet” — the PJM Interconnection — yet faces structural hur-dles integrating distributed generation, as well as high costs and lack of time-of-use rates.

Combining forcesThe District of Columbia is not alone in proposing radical moves to promote local energy. In California, signatures are being collected for a ballot initiative that would create a statewide public power utility. A new entity, the California Electrical Utility District, would buy out Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison, which together serve about 11.8 million customers.

Supporters must collect 365,880 signatures for the proposal to appear on the ballot in No-vember 2016. They point to the success of the Sacramento Municipal Utility District as an ex-ample of the benefits of replacing California’s investor-owned utilities.

Given its size, the California proposal runs counter to today’s trends in public power cre-ation. It is smaller entities, many of them green-field sites, that tend to pursue public power now, said APPA’s Schryver. These are likely to be resi-dential communities or industrial sites.

Cleaning houseThe desire for a cleaner energy supply is a commonality among many new public power campaigns, as well as a desire to keep governance local. In Hawaii, Maui represents an example of both.

Maui began investigating public power after Continued on page 14

High-visibility public power campaigns are ongoing in various stages in several communities.


Boulder Sets the StageIf there are legends in public power, Boulder is positioned to become one of them. The Colorado city began its much-watched quest in 2005, and has shouldered on with the hopes of having a municipal utility in operation by January 2018. Thanks to Boulder’s quest, municipalization — or making a power utility public — has entered the national dialogue.

The city faces formidable opposition: Xcel Energy, an $11.7 billion company with regulated operations in eight Midwestern and Western states.

Boulder’s journey has taken various twists and turns before the state Public Utilities Commission, the courts and the Federal Energy Regulatory Commission.

From April to July 2015, the city worked on a filing for regulators that included information on what assets the city will acquire from Xcel, a condemnation plan, a distribution wheeling tariff and a proposal on how to work out a transition with the utility. The parties are awaiting a written decision from the PUC on the filing. Xcel is attempting to have it dismissed.

In a recent oral deliberation, the commission appeared willing to work toward a “good resolution,” said Heather Bailey, Boulder’s executive director of energy strategy & electric utility development. “They are not intent on opposing municipalization; they just want to protect the customers.”

The city is focusing not only on its own destiny, but also that of other cities and towns. It does not want to leave them with stranded costs — capital expenses incurred by Xcel to serve Boulder that remain after the city stops paying the utility. Bailey said the city has presented a strategy that it believes can reduce stranded costs.

The idea is based on a need for new power that Xcel has identified over several years. As it transitions toward municipalization, Boulder plans to buy power from the utility. Then it will gradually ramp down its power purchases from Xcel, as the utility’s power needs ramp up. This will allow Xcel to avoid at least some of the capital investment it would have otherwise made to meet new demand. This in turn eases the financial strain on the utility from Boulder’s departure.

Many of these issues are still being worked out before regulators. While the city awaits approvals, it is moving forward with pieces of the transition plan, such as evaluating software and billing systems, customer service, safety and similar utility operations. The city has issued a request for qualifications to vendors to outsource a significant part of the operations — at least at the start. Eventually, the city plans to bring the work in-house.

What would Bailey recommend to other cities and towns considering public power? Be prepared, she said. It has to be a community effort based on clear goals and an understanding that the process will not be easy or quick. Boulder, for example, has a five-year budget to go public.

“If you have a utility that has got a lot of money and does not want this to happen and is going to fight to the end, it really is difficult,” she said. “You have to go into the situation with eyes wide open, there will be ups and downs. They have all the time in the world and deep pockets. You have to be aware it will very challenging.”


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owned by customersby customersbyAt public power utilities, governance begins at the ballot box and is carried out through the city or town council and utility board. Business is conducted in the open and citizens know where their power comes from and how and why decisions affecting their utility bills are made.

a ordable ratesPublic power utilities serve their customer owners, not remote shareholders. With no profit motive and only the community’s best interests at heart, they keep electrici-ty rates reasonable through a transparent process.

top uality ser iceuality ser iceuWhen customers need help, their calls are answered locally and the utility can respond to outages faster. For public power communities, providing the highest quality service to its customer owners has always been the No. 1 priority.

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ometown obsThe local utility is headquartered in town and creates local jobs for customer service representatives, lineworkers, engineers, mechanics, and administrators. Kids grow-ing up in public power communities can find a career right in their hometown. Each dollar of a public power employee’s pay-check circulates through the local econo-my an estimated four to five times.

uel for the ecfor the ecfor the onomyCity officials and utility managers often work together to create economic develop-ment programs. Many public power com-munities are proud to offer special rates that entice businesses to set up shop.

money in thein thein t bankhe bankheCities with successful public power utili-ties often receive large deposits into their coffers. This money comes from the utili-ty’s profitable, smart services. Cities rein-vest this money into their communities.= money

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Continued from page 10

Hawaiian Electric Industries and Florida-based NextEra Energy began merger proceedings. Maui County has issued a solicitation for a report on its options.

The citizens of Maui want more renewables and they don’t feel like they are going to get that with NextEra. “By having a public power utility, you have more control over the decisions your community makes. You can focus on the things important to your community,” Schryver said.

Maui, which has a population of about 160,000 people on the islands of Maui, Lanai, and Molokai, is at the start of the public power journey — collecting data. It has hired Okla-homa-based engineering and consulting firm Guernsey to undertake an alternative utility analysis.

Perseverance pays backAll of these communities have a strong role model in Winter Park, Florida, a municipal utility that recently celebrated its 10th anniversary. The city formed the utility after citizens voted to exercise a buyout option when its franchise agreement with Progress Energy Florida expired.

“They are a really good example and one of the largest communities to municipalize in re-cent years,” Schryver said.

The utility, which has 14,000 ratepayers, has buried about 60 percent of its wires, paid back $14 million advanced by the city’s gener-al fund, and achieved rates 12 percent below those charged by the investor-owned utility.

Winter Park offers a tale of success — and inspiration — for the cities and towns now trying to take more control over their energy supply. Often up against large, well-funded utilities, these communities press forward, believing public power is worth the fight.


Resources to Communicate ValueThe American Public Power Association offers a range of resources to help you communicate the value of public power to support taking ownership of your utility, or oppose a sellout. Download and use any or all of these resources, adapting as you see fit. You’ll need your APPA member login for access.

Bainbridge Island Dares to InnovateIt’s little surprise, really, that Bainbridge, Washington is exploring public power. Off the coast of Seattle in Puget Sound, the island of 23,000 people has struck out on its own before to take control of its energy future.

Known for their environmental stewardship, the island residents weren’t happy when they learned a few years ago from their utility, Puget Sound Energy, that they needed a new substation to meet peak demand. Instead of placidly accepting or blindly fighting, the citizens worked on figuring out an alternative. Island residents sought out expertise, won a $4.9 million federal grant, and instituted an extensive energy efficiency campaign to shave peak energy use. The campaign involved public education, electronic energy displays, behavioral programs and competitions.

Now Bainbridge Island wants to take even more control over its energy. An organization called Island Power has formed to promote creation of a publicly owned electric utility.

“Reducing our carbon footprint by getting off of coal-generated electricity is the primary reason we started the campaign,” said Jane Lindley, co-chair of Island Power.

The Jefferson County Public Utility District in Washington is a role model for Bainbridge, according to Steve Johnson, co-chair of Island Power. The municipal utility took over from PSE two years ago. It has rates lower than PSE

and is proving the business case for public power, Johnson said.

Island Power achieved its first big win in fall 2015 when the city council agreed to study the viability of the idea. The council directed the city manager to draft a request for proposals for the study, which will look at the economics, engineering and legalities of acquiring the island’s electric system from PSE. The city

manager expects the study to cost $200,000 to $250,000.

If the study results are favorable, then the city will write an ordinance to put an initiative on the ballot. Island Power hopes the matter will come to a vote in the November 2016 election, Lindley said.

VideoAn animated video featuring our mascot Captain Public Power explains how public power utilities make a difference.

[PublicPower.org>About]

PrimersPublic Power: Shining a Light on Public Service and Public Power’s Role in the Electricity Industry are two popular fact sheets on public power’s national reach.

[PublicPower.org>About]

StatisticsIt’s all about the data. How does public power compare on rates, generation, governance, and more? Get the numbers and charts that will help you tell the story of public power to all stakeholders. And be sure to browse APPA’s Annual Directory and Statistical Report, accessible online.

[PublicPower.org>About>Statistics]

Sellout GuideAPPA’s Positioning Your Community To Succeed In A Sellout is a comprehensive guide to help you prevent a sellout attempt, evaluate your community, and communicate with stakeholders in a sellout evaluation. It’s packed with case studies and lessons learned from public power utility evaluations.

[PublicPower.org>Store>Search for “Sellout”]

Public Power Week TemplatesThe sample letters, fact sheets, op-eds, blog posts, graphics, and videos that APPA provides to members for use during Public Power Week in October offer ideas and material to help you communicate the value of public power at any time of the year.

[PublicPower.org>Programs> Public Power Week]


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You can’t build a secure home without a strong

foundation, but what undergirds much of global

communication is inherently insecure: the

Internet. The same tactics hackers use to steal

an individual’s personal information can also

be used to access unprotected critical systems

behind the country’s electricity backbone, the

grid. Securing America’s ability to keep the

lights on is an evolving challenge.

Securing the Foundation

By Laurel Lundstrom, Contributing Writer


It’s 3:25 p.m. on any given business day. The afternoon slump weighs heavy. The Outlook inbox notification dings and the temptation to take a break from this spreadsheet is strong. It’s an email from a close coworker, “Fwd: tips for losing weight easy.” Or at least, it appears to be from a close coworker, but it includes a link to an unknown site.

To click or not to click? We’ve all been there.But by now most of us know the signs of a phishing email. Still, what appears to be a harmless message from a friend could be the beginning of a cybersecurity breach.

Cybersecurity has been likened to stor-ing valuables in an unguarded house — the house is the Internet and the valuables are your or an organization’s private data. For in-dividuals, the threat is scary enough — viruses and malware that generate threatening or embarrassing emails or Facebook posts, or worse, identity theft.

But think bigger and the threat multiplies tenfold.Power plants talk to the Internet, too. The energy sector has experienced the most cybersecurity incidents of all critical infrastructure industries in the past several years, according to federal data. But none of these attacks have been successful in taking down the grid.

“With the Internet, [hackers] can affect a wide range of customers, thousands at a time,” said Tom Ayers, chief executive officer of N-Dimen-

sion. N-Dimension provides continuous moni-toring and vulnerability assessments to public power utilities. Ayers said that some of N-Dimen-sion’s smaller utility customers have been hacked as part of a larger attack that spanned multiple

utilities and networks. Cyber attacks aimed at the grid may start

small but can threaten the security of electric utility operations and, in turn, the security of the entire country’s electric grid. This has forced utilities to make cybersecurity a priority throughout their business. But as anyone with

an email account knows, dangers can lurk just a mouse-click away.

“Cyber threats can be initiated from the far reaches of the world by actors with malicious intent placing malware onto vulnerable systems — and they are increasingly demonstrating their ability to do so, even in the United States,” said Nathan Mitchell, senior director of electric

reliability standards and security at the American Public Power Association.

“We must continue to deploy and improve the cybersecurity tools

used to defend against these threat actors.”

Critical infrastructure in-dustries including electricity are handling cybersecurity much like individuals do, but on an exponential scale. Imagine that spam blocker on your email ac-count as a virus and mal-ware detection system that alerts grid monitors and provides automatic

remediation. Envision your email or computer pass-

word as not only a lock but a security system that monitors

network traffic for malicious ac-tivity and actively blocks intrusions

as they are detected.The energy industry is also utilizing

collaboration to bring consistency to mon-itoring and detection and keep everyone in the loop on the growing and quickly evolving array of threats to the grid.

Secure and smart from the startThe energy sector faces threats including data theft, denial of service attacks, website defacement, and privacy breaches, or worse, operation, where attacks target the generation and delivery of power.


With the proliferation of smart grid technol-ogies, being cybersecure has become a complex challenge.

“With smart grid technologies being de-ployed, utilities are adding connected devices in their substations, on their distribution and transmission network, and finally meters at the home,” said Benjamin Beberness, chief informa-tion officer at Snohomish Public Utility Dis-trict in Washington. “All of these devices need to be secured. To do that, we are making sure that security is baked in from the beginning.”

Snohomish has established a smart grid lab, which allows the utility to test its new equipment across the full spectrum: from SCADA systems to meters. “This also helps us secure and test our equipment before it goes out into the field,” said Beberness.

According to a new report by Dell Security, cyber attacks on SCADA systems doubled last year, and they have increased 600 percent since 2012.

Utilities are threatened by outsiders — like hackers and hackivists with ties to foreign govern-ments and organized crime — and in-siders, such as disgruntled employees. Both employees with malicious intent and employees with no malicious intent who do not follow se-curity protocols closely, or are not aware them, pose a threat.

“The riskiest thing we see is people bringing in their own USBs,” said N-Dimension’s Ayers.

“The expansion of the internal attack surface has required us to look at tools that help us un-derstand what is going on within the walls and training our staff to understand how everyone

plays a role in securing our utility,” said Beber-ness. “Our goal is that we not only have a culture of safety but a culture of security.”

The risk is such that it only takes one person or one click to let in a threat, said Paul Crist,

vice president of technology services and chief technology officer for Lincoln Electric System in Nebraska.

“It only takes one user in your company to click on something bad,” Crist said. He said there has been an increase in spear phishing in-cidents — or a malicious email that appears to

be from someone you know, but isn’t — partic-ularly targeting chief financial officers and chief executive officers. The hacker wants to steal fi-nancial information from the computer and con-nected company networks.

In addition to training employees to do things like look for suspicious emails or lock their computers when they are away from their

desks, Lincoln Electric System has installed email filtering software that blocks sus-

picious emails and overwrites all URLs included in an email.

“The service masks the URL and sends it through their sys-

tem first to verify the link is safe,” said Crist.

Lincoln Electric Sys-

tem also hosts “reboot Thurs-days” where all computers con-

nected to the corporate network are rebooted to have new security

patches installed. “One of the things we are ramping up

is data loss prevention,” said Crist. “That is where you are looking for data moving that is abnormal and you flag it or block it until it is validated.”

Collaboration: Power combinedLincoln Electric System is part of a pilot program supported by the Department of Energy which involves additional network activity monitoring and rigorous analysis. The program also shares

Learn more about the Electricity Information Sharing and Analysis Center and sign up for information sharing at esisac.com.


what it finds automatically with all of its participants. The program involves the gas, oil, and electric sectors.

DOE’s pilot is one of several government-led efforts to encourage the sharing of threat infor-mation. Another is the Electricity Information Sharing and Analysis Center. The electricity in-dustry just exercised the E-ISAC’s information sharing capability in a mock cyber and physical attack called Grid Ex. APPA participated in the drill’s third incarnation.

Another valuable resource is the Industrial Control Systems Cyber Emergency Response Team monthly newsletter operated by the De-partment of Homeland Security. In the news-letter, ICS-CERT shares all security breaches reported by critical infrastructure owners in the United States, without naming the entities that have been threatened or attacked.

The Cybersecurity Information Sharing Act, which recently passed in the U.S. Senate, is a legal attempt to institutionalize information sharing among private entities, nonfederal gov-ernment agencies, state, tribal, and local gov-ernments, the public, and entities under threat, including utilities.

In a joint letter, trade associations including APPA, the National Rural Electric Cooperative Association and Edison Electric Institute en-couraged legislators to approve the act. The bill will facilitate and encourage more open commu-nication between agencies, the power sector and other critical infrastructure owners to bolster cy-bersecurity defense, the groups said in support of the bill.

Despite the many existing ways the industry communicates and shares information about cy-bersecurity, there is still room for better govern-ment-industry cooperation in sharing actionable information, APPA and the other groups said.

John Bilda, general manager at Norwich Pub-lic Utilities in Connecticut, urged collaboration to go a step further than simply information

Learn from your peers and experts in the industry about cybersecurity through APPA’s webinars and other educational offerings available on PublicPower.org under Events.

sharing. “On an industry-wide level, the lack of mutual aid for cyber attacks is a growing con-cern,” he said. “Currently mutual aid among utilities exists for service restoration in the event of a natural disaster or other large-scale incident. The utility industry should examine the need for a similar system for cybersecurity.”

Public power is also represented at the Elec-tric Sub-Sector Coordinating Council’s table by Kevin Wailes, administrator and CEO of Lin-coln Electric System. Wailes serves as the vice chair of the ESCC. The council was formed in the late 90’s in support of NERC and its critical infrastructure protection plan. The council fo-

cuses on malicious threats as well as responding to severe storms.

“Cybersecurity is not a task that can be com-pleted, but an ongoing process as the threats evolve and tools to address those threats ma-ture,” Wailes said. “The industry, through the ESCC, has developed a critical partnership with the senior levels of government, facilitated by the Department of Energy and Department of Homeland Security, that supports continual-ly improving information sharing, expanded tools and cooperation in developing solutions to achieve higher levels of resilience.”


Top 10 Cybersecurity Technologies

Vulnerability scans: Assesses endpoint devices — desktops, laptops, servers, industrial control systems, etc. — and applications for cybersecurity weaknesses. Such weaknesses may include unpatched software, open ports and services and use of default passwords. Vulnerability scans are often run once or twice a year, typically by an outside third party. A newer approach is scans run daily.

Monitoring software: Actively monitors live network traffic for threats and alerts.

Data loss prevention software: Shows where data are stored, how data are used on and off the network, and protects data from being stolen.

Intrusion prevention system: An extension of an intrusion detection system, monitors network traffic for malicious activity and actively blocks intrusions as they are detected.

Security patches: A software or operating system patch that is intended to correct a vulnerability to hacking or viral infection.

Firewalls: Establish a barrier between a trusted, secure internal network and another outside network that is assumed not to be secure.

Virtual private network: Encrypted communications between remote networks and users.

Anti-virus/Anti-malware: Software installed on computers and servers to detect virus/malware signatures and alert users to activity. Some solutions can also provide remediation.

Access control: Controls access to information technology resources, permitting or denying the use of a system, file or access to a network by an individual or process. Access Control delivers three basic services: authentication, authorization and accountability.

Automated sharing of malware signatures: Devices that automatically share and block malware signatures as soon as they are discovered.

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ESCC: Engages industry CEOs in cybersecurity policy, analyzes industry-government cooperation and response

DHS: Protects the homeland, provides analysis of attacks, and shares mitigation strategies

DOE: Develops new defense mechanisms for utilities and coordinates attack response with FEMA

Congress: Provides the legal framework for cybersecurity

NSC: Develops presidential policy directives to inform federal regulation and industry support

FEMA: Provides recovery resources and logistical support in the event of equipment destruction

FERC: Implements reliability standards, evaluates risks, and regulates reliability enforcement

NERC: Convenes industry experts to draft standards, provides forums to share best practices

FEDERAL ENERGY REGULATORY COMMISSIONNorman BayChairman

Joseph McClellandDirector, Office of Energy Infrastructure Security

Michael BardeeDirector, Office of Electric Reliability, FERC

FEDERAL EMERGENCY MANAGEMENT AGENCYCraig FugateAdministrator

NATIONAL SECURITY COUNCILMichael DanielSpecial Assistant to the President, Cybersecurity Coordinator

CONGRESSHouse

Energy and Commerce Committee Chairman Fred Upton (R-MI)

Ranking Member Frank Pallone (D-NJ)

Energy and Power SubcommitteeChairman Ed Whitfield (R-KY)

Ranking Member Bobby Rush (D-IL)

Communications and Technology SubcommitteeChairman Greg Walden (R-OR)

Ranking Member Anna Eshoo (D-CA)

Permanent Select Committee on IntelligenceChairman Devin Nunes (R-CA)

Ranking Member Adam Schiff (D-CA)

Homeland Security CommitteeChairman Michael McCaul (R-TX)

Ranking Member Bennie Thompson (D-MS)

Subcomittee on Cybersecurity, Infrastructure Protection, and Security Technologies Chairman John Ratcliffe (R-TX)

Ranking Member Cedric Richmond (D-LA)

Senate

Energy and Natural Resources CommitteeChairman Lisa Murkowski (R-AK)

Ranking Member Maria Cantwell (D-WA)

Select Committee on IntelligenceChairman Richard Burr (R-NC)

Vice Chairman Dianne Feinstein (D-CA)

Homeland Security and Government Affairs CommitteeChairman Ron Johnson (R-WI)

Ranking Member Tom Carper (D-DE)

Commerce, Science, and Technology CommitteeChairman John Thune (R-SD)

Ranking Member Bill Nelson (D-FL)

DEFENDING THE CASTLEKey players in cybersecurity

NORTH AMERICAN ELECTRIC RELIABILITY CORPORATIONGerry CauleyPresident and CEO

Tim RoxeySenior Director, E-ISAC and Chief Security Officer

Marcus SachsSenior Vice President and Chief Security Officer

DEPARTMENT OF ENERGYErnest MonizSecretary of Energy

Elizabeth Sherwood-RandallDeputy Secretary and Chief Operating Officer

Patricia HoffmanAssistant Secretary for the Office of Electricity Delivery and Energy Reliability

Devon StreitDeputy Assistant Secretary for Infrastructure Security and Restoration

ELECTRICITY SUB-SECTOR COORDINATING COUNCILKevin WailesCo-chair; Administrator and CEO of Lincoln Electric System

Tom FanningCo-chair; Chairman, President and CEO of Southern Company

Duane HighleyCo-chair; President and CEO of Arkansas Electric Cooperative Corp.

DEPARTMENT OF HOMELAND SECURITYJeh JohnsonSecretary of Homeland Security

Alejandro MayorkasDeputy Secretary of Homeland Security

National Protection & Programs DirectorateSuzanne SpauldingUnder Secretary

David HessActing Deputy Under Secretary

Phyllis SchneckDeputy Under Secretary for Cybersecurity

Andy OzmentAssistant Secretary, Office of Cybersecurity and Communications

Caitlin DurkovichAssistant Secretary, Infrastructure Protection

ESCC

DHS

DOE

NSC

FEMA

FERC

NERC

CONGRESS

@PublicPowerOrg #PublicPower


PROCEEDWITH CAUTION

By Laura D’AlessandroIntegrated Media Editor


Utilities are traveling down the road to the unknown as they try to prepare for their state’s compliance with a federal carbon dioxide emissions reduction requirement — the Clean Power Plan.

When the U.S. Environmental Protection Agency released its final Clean Power Plan in August to regulate carbon dioxide emissions from existing power plants, some utilities may have heaved a sigh of relief. More flexibility and tweaked emission targets are a plus for some states, but the final rule gave some states more stringent targets to meet and most are still strug-gling with finding a clear path to compliance amidst uncertainty.

Without a federal model plan, utilities say it’s not yet clear how states will choose to comply and what variables will come together to indi-cate the most important outcome: impact on customers.

Other uncertainties also wait in the wings — many lawsuits to overturn the rule have been filed since the final rule was published in the Federal Register. Some of those suits were filed by 24 states who must still work on compliance plans. The EPA has said states can request an ex-tension for up to two years past the initial 2016 filing deadline.

But there is one thing many utilities are sure of: for some customers, rates will go up.

“The one thing we are well aware of is — whether the Clean Power Plan is accomplished through adding lower or non-emitting genera-tion or investing in energy efficiency, or under-taking heat rate improvement, or even buying allowances — the end result will be higher cost to our customers,” said Brandy Olson, director of legal and regulatory services at Muscatine Power & Water in Iowa. “We’re trying to be mindful of that. The stakeholders don’t want to get too far

into the state plan process to have everything stayed or everything overturned, so we’re cau-tiously proceeding.”

What is the Clean Power Plan?The EPA proposed the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Generating Units rule under the Clean Air Act’s Section 111(d). Unlike typical proposals through Section 111, the rule is not proposed for new sources, but existing ones. The plan directs states to reduce carbon dioxide emissions by 32 percent by 2030 from 2005 levels through measures such as investing in natural gas infrastructure and hitting higher renewable energy targets.

Compliance with coalLow electricity rates are something public power utilities are proud of. For many, owning generation has been a key factor in creating stability and attracting customers. In Muscatine, that

generation happens to be coal.Muscatine owns three coal-fired units. Ol-

son said the community’s reliable rates have allowed Muscatine to become a popular desti-nation for industrial businesses — it’s the home to one of the world’s largest office furniture manufacturers.

“Part of what makes Muscatine attractive and made it grow are reliable rates and local genera-tion that is locally served,” Olson said. “It’s a big part of why companies chose to invest here and it helps keep our community competitive with economic development.”

READ MORE about the benefits of public power, including local control, on page 8.

But because complying with the Clean Power Plan includes so many variables, Olson said she isn’t sure what Iowa is going to do and just how that is going to affect Muscatine’s rates. A final

model trading rule is expected this year, but regulators want to have that

before they begin creating a state compliance plan.

Without it, Olson said states are starting from

scratch. “We’d be a lot



more efficient if we could evaluate the federal model,” she said. “At this point, without having many answers, it’s difficult to point in a direction and say, this is where we’re headed. We don’t know what will be allowed in our state allowance plan; it’s too early to tell. It’s also difficult, having seen the timing issue with the litigation — we don’t want to be in the position of making the de-cision that financially impacts the utility, and our customers, only to have those revised later from the courts. We’d rather have a clear path.”

Even turning to renewables, Muscatine is finding itself on an unexpected path. The coal-owning utility is located in a state that has a reputation for high wind capacity. But Olson said most of that is located in the northwestern region, while Muscatine is located in the southeast. Addi-tionally the wind farms are built at large scale to the benefit of large holding companies, a project development model that a small municipal utility doesn’t benefit from. Instead, Muscatine is look-ing to community solar as one investment that could help balance out its portfolio with benefits to customers.

“We are seeing more municipalities in Iowa beginning to look at solar projects. Cedar Falls has had an outstanding community interest in a just recently announced solar project. We have a little different demographic here, being a blue-col-lar town and having a different makeup of our load. It’s still a viable option. We’re moving down the path of investigating it as an option. Solar is definitely something people are looking at.”

Hedging with hydroNot all generation owners are at a disadvantage. Naturally, those with renewables in their portfolio are finding their compliance future to be less daunting. But challenges remain. At American Municipal Power, Inc., the joint action agency and wholesale power provider owns generating assets in multiple states, including a natural gas combined-cycle facility in Ohio and part of the coal-fired Prairie State Energy Campus in Illinois. AMP also owns hydropower, solar, energy efficiency and other renewables that include new hydropower facilities in Kentucky and West Virginia. AMP successfully advocated for language in the final rule to clarify the use of new hydropower for compliance

None of the states where AMP has assets have set out a definitive path yet, said Jolene Thomp-son, senior vice president of member services and external affairs. But AMP is working with a na-tionally recognized firm to run economic models to better assess what impact the different compli-ance approaches might have on its members.

“Our members for the most part have a very diverse portfolio which hedges risk,” Thompson said. “A decade ago, AMP took a strategic port-folio approach to generation asset development, and as a result we’re well-positioned due to the mix of fossil fuels with renewables. We’re one of the less-stressed folks in the room at stakeholder meetings. There are a number of heavy coal util-ities in this part of the country and while we are concerned about cost and reliability issues, the diverse nature of our portfolio has given us more latitude.”

Even so, communication has still been key and will continue to be, Thompson said. AMP has been hosting webinars to explain the rule to its members, discuss what its filings will say, and break down the final rule. “I see a lot of activity starting to gel more in the spring, at least in some of our states. Some state officials have expressed interest in the various economic and reliabili-ty modeling that is taking place. Grid operators have models, utilities have models, and state offi-cials will be looking at those while they formulate strategies.”

Going nuclearWhen the EPA first proposed the Clean Power Plan in June 2014, the situation was even worse, especially for nuclear generation owners whose new projects were under construction. The plan didn’t give them credit for investing in new, non-emitting generation.

Over the past decade, Santee Cooper in South Carolina has been preparing for what CEO Lon-nie Carter calls a carbon-constrained world, ac-cording to Mollie Gore, manager of corporate communications at the South Carolina utility. Santee Cooper signed on to two nuclear power projects in the mid-2000s. The main driving fac-tor? Emissions. Santee Cooper adopted its own goal that by 2020, the utility would be getting 40 percent of its power from non-emitting sources. For Santee Cooper, nuclear is big.


So when the Clean Power Plan’s first iteration was released, the utility — like others invested in nuclear — was not happy.

“The first version did not treat nuclear under construction very well at all,” Gore said. “It was very punitive toward South Carolina and Georgia, in particular, the two states with new nuclear projects underway.”

The two neighboring states took action, calling on customers to speak up. Gore said 36,000 of Santee Cooper’s customers sent postcards to the EPA — nearly a quar-ter of the utility’s entire customer base. And it worked. The final Clean Power Plan gives credit to new reactors, those under construction and the expansion of existing plants. That credit goes toward state compliance.

“We were certainly pleased to see that the final rule did address that chief concern,” Gore said. “Now, it’s not perfect. But in terms of the way it treats nuclear, it’s night and day, specifically nuclear under construction.”

Santee Cooper was able to help bring about change in the final rule by engag-ing customers and, perhaps more importantly, engaging regulators. Gore said utilities need to continue to do both.

“These are state compliance plans, but the first step is to get a state plan together,” she said. “Those are the conversations I think are going on around the country now. All public power utilities can become part of that conversation, it’s the first big step.” n

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A New Era in Electricity Delivery and Customer ServiceBy Joe Nipper, Senior Vice President, Regulatory Affairs and Communications, APPA

PUBLIC POWER FORWARD

Today, electric utilities compete not with each other but with Amazon and Zappos in gauging and meeting changing customer needs and pref-erences, noted Arlen Orchard, CEO of the Sacramento Municipal Utility District at the American Public Power Association’s recent Public Power Forward Summit.

The summit brought together a group of public power leaders and visionaries to preview the future and discuss how to continue to serve the changing needs of public power’s 48 million customers across America.

Public Power Forward — synonymous with utility 2.0 or utility of the future — is the umbrella term that APPA has coined for new and evolving technologies like distributed generation, energy storage, de-mand response, and energy efficiency that public power utilities must be responsive to. Public Power Forward is a concerted effort to help our members understand and deal with rapid changes in energy technology, regulations, utility business models, and most important — customer preferences.

Indeed, APPA staff members have already rolled up their sleeves and are working hard to achieve the Public Power Forward-related goals set out in the association’s strategic plan for 2016-2018. I am very encouraged with our progress to date and extremely optimistic that staff at APPA will be able to successfully meet the objectives of the strategic plan and deliver on the goals included in that plan.

Changing customer needs and preferences are among the industry’s biggest drivers of change. For example, as Paula Carmody, people’s coun-sel at the Maryland People’s Counsel explained during the Public Power Forward Summit, integration of distributed energy resources can provide important efficiency, price impacts, reliability and environmental benefits but also will bring increasing complexities and costs for customers. She cautioned that key consumer concerns should remain guideposts when considering changes in regulatory policies and practices.

Interests and priorities can vary among consumers and customer satis-faction depends on how we tune into that wide range of interests, like Am-azon and Zappos. And like these customer service giants, we want to keep customers informed and engaged. We as utilities want to be their trusted advisors even if they shop with third parties. We want to be sure we address customer concerns about privacy and security, Carmody pointed out. She emphasized that public policy goals, technology and service innovations, and utility objectives must all align with customer interests.

As we gear up for a future in which customers wield more influence when it comes to how utilities are run and the services they provide, pub-lic power has a distinct advantage. Our track record of being nimble and responsive to the needs of our customer-owners will serve us well. We are willing to invest in innovation. In fact, I’m impressed with how many of our member utilities are engaged in a number of innovative projects.

There are plenty of examples of how public power utilities, in many ways, are already IN the future and defining a new era in the delivery of electricity and attention to customer needs.

• Seattle City Light: Seattle City Light in Washington championed the idea of community solar well before most had heard of it, and has created four community solar projects with more than 1,300 participants.

• Fort Collins Utilities: A National Public Radio feature described Fort Collins’ government-run utility in Colorado as a “model for the potential utility of the future.” In 2012, the utility installed nearly 70,000 smart meters, at a cost of $36 million, funded by a grant from the American Recovery and Reinvestment Act. Now, both customers and the utility can see their energy use in 15-minute increments.

• Lincoln Electric System: Nebraska’s Lincoln Electric System has designed an efficient system that uses excess wind energy to store compressed air and provide power when winds die down or when energy use is highest. The system was designed with partial funding from APPA’s research and demonstration program, DEED.

• Snohomish Public Utility District: Snohomish, which is based in Everett, Washington, in late November said that it is adding a second battery to its MESA-1 energy storage system in a move that shows the success of an effort aimed at streamlining energy storage standards and deployment. MESA refers to Modular Energy Storage Architecture. MESA standardization is aimed at creating open, non-proprietary communications specifications for energy storage systems.

• Glasgow Electric Plant Board: Kentucky’s Glasgow Electric Plant Board and Sunverge Energy are partnering to provide home battery storage to 165 municipal electric customers in Glasgow, Kentucky. Glasgow EPB, which serves more than 7,000 customers, is providing the storage solution to reduce emissions and peak demand, which will also save customers on electricity bills. n

PUBLIC POWER FORWARD


WASHINGTON REPORT

Never Let Up on the Gym Routine By Joy Ditto, Senior Vice President, Legislative and Political Affairs, APPA

January is here and many of us are returning to gym routines left by the wayside. Muscle memory is probably helping us rebound, even if we’re initially short of breath on the treadmill.

After a lengthy period of near-paralysis, Congress, in late 2015, started to get back into a routine and flex its legislative muscles. The result: notably bipartisan energy legislation aimed at electric utilities cleared the Senate Energy and Natural Resources Committee. The full House approved similar legislation, although in a less bipartisan way. Congress approved and the President signed a long-term transportation funding bill that folded in key APPA priorities.

Public power was able to move its priorities forward in this process because APPA members, grassroots advocates, and staff in Washington never quit their routines, as tempting as it may have been to take a break.

In 2016, we are focused on two bills that tee up items important to public power — H.R. 8, the North American Energy Security and Infrastructure Act (passed by the House in 2015) and S. 2012, the Energy Policy Modernization Act of 2015 (passed by the Senate Energy Commit-tee in 2015).

Both bills have pending provisions that give the Federal Energy Regu-latory Commission a role in reviewing major federal agency rule-makings that might affect electric reliability. Another provision will spare utilities from choosing between reliability and compliance with other laws.

Both bills contain important hydropower licensing reform measures to facilitate early coordination and provide additional resources where needed. FERC is designated as the lead project licensing and relicensing agency to coordinate project licensing or relicensing, working with other agencies to develop a master schedule for all required reviews and autho-rizations. It will no longer be acceptable for an agency to delay a decision indefinitely.

These issues are shaping up in a favorable way. But public power advocates should consider taking a course in self-defense at the gym. The hydropower relicensing legislation will face environmental scrutiny once the bill reaches the Senate floor. The sooner new hydropower licenses can be approved, the faster electric utilities can implement the more stringent environmental requirements under the new license.

Another fight looming on the Senate floor is about distributed gener-ation interconnections, particularly rooftop solar. A number of bills and amendments proposed in 2015 use the Public Utility Regulatory Policies Act to insert the federal government into what should be state and public power utility decisions about what distributed generation to interconnect with, and at what cost. At the state and local levels, distributed gener-ation interconnection and rate-making issues are controversial enough. Public power is concerned that, where net metering programs provide excessive rebates, customers without rooftop solar subsidize customers with rooftop solar. We’re told this will be a significant issue for Democrats on the Senate floor.

Public power advocates must be in top condition to educate the Senate on the progress we’re making on solar offerings. We must assert why

federal interference with public power’s ability to make decisions will be unfair to customers.

We will also need long-distance aerobic training to protect our right to self-supply our own power generation. Provisions to this effect are missing from the House and Senate bills and must be included to ensure that the ability of public power systems to affordably supply generation resources to members is not impaired by mandatory capacity markets in the mid-At-lantic and Northeastern Regional Transmission Organizations. We must ensure that the RTOs’ mandatory capacity markets do not spread to other regions of the country without the express, unanimous approval of the states in that region.

Public power utilities in regions with mandatory capacity markets have experienced high prices and have not seen the promised new generation these markets were supposed to provide.

We also must stop those who want RTOs to report to FERC on wheth-er assets bid into the market meet certain performance requirements — a back-door means of feeding profits to some generators at the expense of a true, well-performing market. APPA made considerable headway in 2015 in educating members of Congress and keeping the worst language on these topics out of the House bill. We now seek champions to advance these concerns in the Senate.

The presidential elections in 2016 may set Congress back in its rou-tine. However, the progress made in 2015 by public power shows it pays to never rest, and never abandon the gym.

We want to ensure that distributed generation decisions do not become federal decisions, and that poor market constructs do not impair our ability to serve our customers. Let’s stay fit and prepared!

READ MORE: Find an expanded version of this column at Blog.PublicPower.org/SME.

WASHINGTON REPORT


So What? The Real Value in Public PowerBy Meena Dayak, Vice President of Integrated Media and Communications, APPA

COMMUNICATING THE VALUE

A well-known fast-food chain has long used the slogan, “We bake our own bread.” Every time we pass by one of their stores, my husband goes, “So what?” He does not actually dislike — or for that matter, like — the food this chain serves up. He’ll stop for a quick bite if it’s lunchtime and one of the stores is on his way. He knows it will be quick and cheap. And he knows what to expect, whether he’s in Milwaukee, Wisconsin or Marlow Heights, Maryland.

Now imagine there was a deli right next to the chain stop on my husband’s lunch route. And the deli had a sign that said something like “Our fresh baked bread reminds you of Mom’s sandwiches,” or better yet, “Our fresh baked bread has 5 percent less sodium than store-bought bread.” Guess which one he’d go to?

His “so what?” reaction brings to mind three valuable lessons you can use to communicate the value of public power to customers.

LESSON 1

Tell them what they want to knowHave you ever asked your customers what they really want to know from their electric utility?

At APPA’s recent Public Power Forward Summit that looked at our industry’s future, many public power executives reiterated, “It all comes down to rates.” Chances are your customers want to know how they compare to their neighbors or to other utilities on their bills. They may want to know how to save on their bills. Or how to make their homes warmer or cooler. Or if smart meters compromise their privacy. Or the best time to do laundry.

You’ll offer the best value by telling them what they want to know. APPA is conducting a national survey of public power utility custom-ers and compiling takeaways from customer research conducted by some utilities in their own communities. We’ll share the results, which will inform our efforts to help you raise awareness of public power.

LESSON 2

Tell them how it makes a differenceWe know public power rocks and why, but do your customers? Whether it’s your renewables portfolio, a reduced fuel adjustment charge, a new training program for your lineworkers, or that big safety award you just won — tell your customers what’s in it for them.

One example is a great program offered by Missouri River Energy Services, a joint action agency in Sioux Falls, South Dakota. The pro-gram, Municipal Power Advantage, allows util-ities to quantify the benefits they offer to their communities to inform customers, city councils or governing boards, and policymakers.

MRES analyzes three years’ worth of a utility’s data to compute the real value of all that the utility gives back to the community — payments in lieu of taxes, free or reduced-cost electricity services to the city, transfers to the general fund, and more. The program helps utilities compare wholesale power costs and retail rates charged, quantify energy efficiency savings to the customer, and show the impact of reliability data and the environmental impact of the utility’s services.

Typical messages to customers from a utility in the Municipal Power Advantage program might look like, “Your total savings from being served by your local municipal utility is $325 a year,” or “Your utility keeps your power on 99.9985 percent of the time.”

LESSON 3

Tell them when you have their attentionNeel Gulhar, senior director, product strategy at Opower, told us during APPA’s Public Power Forward Summit that customers spend no more than 9 minutes a year thinking about their electric utility! They likely think about you only when their electricity bill is higher than usual or when they need to connect or discon-nect service.

Like you, your customers live in a world of information overload. One more web page, one more brochure or newsletter, one more Face-book post, or one commercial on the local cable channel will only take your messages so far. But don’t underestimate the power of the electricity bill — to present clear, simple information that will make customers appreciate your service. Don’t forget the power of good old-fashioned face-to-face interaction. Go and meet your cus-tomers at the local ballgame or farmer’s market, or invite them to an open house during Public Power Week.

What are you doing to explain to your customers the “so what” of being served by a public power utility? How can APPA help? I’d love to hear from you at [email protected]. n

awareness of public power.

GOING PUBLIC


So What? The Real Value in Public PowerBy Meena Dayak, Vice President of Integrated Media and Communications, APPA

Threat Detection and Vulnerability Assessments: A Two-Track ApproachBy Nathan Mitchell, Senior Director of Electric Reliability Standards and Security, APPA

SECURITY

So you have read up on the cyber threat landscape and are sufficiently startled. What do you do next? The fact of the matter is you need to think about your system as a house. You obviously want to find out if there’s a thief in the house, but you also want to identify your house’s security shortcomings before the thief does. Threat detection flags the thief who is in your house, while vulnerability assessments examine the holes in your system.

As part of its cybersecurity webinar series, a recent webinar featuring N-Dimension Senior Security Architect Chan Park examined how the dual-track approach of threat detection and vulnerability assessments can help a utility build a solid foundation in terms of cyber threat preparedness. In the end, knowledge is key, says Park. You never want to be in the precarious position of telling a security auditor that you “didn’t know.” Threat de-tection comes in many forms: network monitoring, intrusion prevention systems, intrusion detection systems, security information and event management systems, network protocol analyses, tcpdumps, sniffers, and more. Utilities need to investigate which solutions are the right fit for their systems and regardless of which solution they choose, they need to understand how to use the tools they have at their disposal and how to respond to flagged threats. In many cases, this comes down to staffing and resources. Active monitoring is essential to keep up with current threats and alerts that can’t afford to sit unread in your inbox.

In terms of looking outside of the utility’s network perimeter, vulnerability scans must serve as a complement to any threat detection solutions. Utilities must proactively search for gaps in their network protection. And this isn’t just about best practices; some utilities must comply with North American Electric Reliability Corporation Critical Infrastructure Protection standards, which are currently on their fifth iteration. Keep in mind that vulner-ability scans have their limitations.

In the end, monitoring must include your network’s perimeter as well as its interior. When thinking about where to start, focus on the most critical network segments. If you do not have expertise on staff, find professionals with whom you can partner. It’s also helpful to be involved in a cybersecurity community that shares security information and threats — examples include the Electricity Information Sharing and Analysis Center and APPA’s own security listserv. Lastly, it’s extremely important to stay current with updates to your software solutions.

By waging a two-fronted war on cyber-infiltration (looking both inside and outside net-work perimeters), public power utilities can continue to do what they do best: providing reliable, affordable energy to the communities they power.

For more information on cyber-readiness, check out APPA’s series of seven webinars on cybersecurity for electric utilities. Learn how to protect your utility, customers, communi-ty, and the electric grid from potentially damaging interruptions. n

Vulnerability scan limitations• An “all clear” scan is valid

for that moment as network configurations may change frequently

• Involve a level of human judgment in that personnel must configure the scans to yield actionable information

• Lastly, scans can discover known cyber vulnerabilities. Physical access threats, for example, cannot be exposed using software solutions

SECURITY


Leadership is a challenge many covet. But it comes with many bumps in the road, some of which may seem insurmountable. The trick is to nav-igate them with compassion and honesty. The result often leaves a lasting impression.

So it was for Walter Haase when he came on board at the Navajo Trib-al Utility Authority. NTUA serves the Navajo Nation in northern Arizona, northeastern New Mexico and southern Utah — a 27,000-square-mile service territory sparsely dotted with homes — of which 15,000 have no power or water! The job sure did not look like a piece of cake.

On his way to work for a community in Illinois in 2007, Haase got a call from NTUA to interview for the position of general manager. He had applied months before and already declined an interview once. But he reconsidered. Twenty minutes after the interview, NTUA offered Haase the job and agreed to a four-year contract.

Haase didn’t know what was ahead. On his first day on the job — Jan. 25, 2008 — he set out to visit all seven of the utility’s field offices. In Tuba City, a small unincorporated town east of the Grand Canyon, Haase stumbled upon a line crew recognizing a new lineman. The crew awarded the lineman a jacket and Haase was there to make the presentation.

About a month later, during his first board meeting with NTUA, Haase received an urgent call. The utility had experienced a fatality; the lineworker he had presented the jacket to died after being injured in the field. Haas said his first reaction was to head to the utility’s field office in Dilkon — about two hours south of Tuba City.

“When I heard that this person didn’t make it, I told my board I needed to go out there. They recommended that I stay,” Haase said. “But I took my deputy general manager, Rex Kontz, and we drove out there together, three hours in the pitch blackness.”

When Haase arrived, the field office was lit up after hours. It was filled

LAST WORDCOMMUNICATING THE VALUE

with the friends and family of the lineworker who died — he had a wife and two children — and many more members of the community who knew him. Employees took Haase to the front of the room to address the crowd, and he saw the fallen lineman’s children.

“They, for whatever reason, grabbed my legs and one of them looked up at me and asked where their father was,” Haase recalled. “I had to address the whole group and the children. I chose to talk about the time I met the young man and how proud his staff was, and how much he loved to do the job.”

It was a first for Haase, speaking to a grieving community on behalf of a utility. But his words sparked healing, he said, and injected him right into the hearts of the Navajo Nation’s people. The utility created a scholar-ship fund for the fallen lineworker’s children that now serves as a support scholarship program.

“As a leader, you’ve got to try to follow your own instincts and try to make sure you feel like you’re doing the things that are right,” Haase said. “There was risk involved in what I did; I didn’t know the culture and the culture is different than what I was raised in. But the community under-stood that to a certain degree. People can understand compassion even when it comes from a source they don’t expect it to come from.”

Eight years later, Haase is still the general manager of NTUA, and still making a difference in people’s lives.

“The big difference between this job and any other job is we truly get to raise the standard of living of the people we serve and people are very grateful,” he said. “I wanted to make sure I was there to complete the tasks in front of me. There’s still a lot that can be done.”

Following Your Instincts

Who: Walter HaaseWhat: General Manager

Where: Navajo Tribal Utility Authority

Accounting■ Public utility accounting

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