Public Power Magazine - Jan/Feb 2016

Loca
llylyl Gr
own
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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EDITORIAL TEAM
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4 Public Power Lines by Sue Kelly
32 Public Power Forward
33 Washington Report
34 Going Public
35 Security
36 Last Word
8 Buying Local
Communities are mobilizing to
take ownership of their electric
distribution assets and create public
power utilities.
16 Captain Public Power
to the Rescue
Learn how to keep your utility
strong to avoid the risk of a sellout.
18 Securing the Foundation
Protecting 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 Castle
Find out who is guarding the grid in
this list of its Washington defenders.
26 Proceed with Caution
Many 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 Gr
own
AMERICAN PUBLIC POWER ASSOCIATION •NOVEMBER/DECEMBER 2015
CONT ENT S
#PublicPower @PublicPower.org
Search for American Public Power and connect with us
5 PM

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 Difference
By 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
78

786330_Milsoft.indd 1 1/5/16 2:38 AM

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Spring Education Institute, May 2 – 6, San Antonio, Texas
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Electric Utility 101 Series
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• Distribution / May 11
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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,
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• Customer service • Key accounts • Energy services • PR & communications • Economic development
Register for all events and webinars at PublicPower.org/Events
Email: EducationInfo@PublicPower.org
Phone: 202-467-2900

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 people
In 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 deregulation
DCPP’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 forces
The 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 house
The 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 Stage
If 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.”

= a ordable rates + top uality ser ice
ometown obs Fuel for economy*
The
buy localelectricity e uation
= money
in the bank
=
+
owned by
customers
public
power
*Each dollar of a public power employee’s
paycheck circulates through the local
economy up to an estimated five times.
Public PowerPublic PowerPublic PowerPublic PowerPublic PowerPublic PowerPublic PowerPublic Power

owned by customersby customersby
At 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 rates
Public 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 iceu
When 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.
ometown obs
The 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 onomy
City 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 bankhe
Cities 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.

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 back
All 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 Value
The 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 Innovate
It’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.
Video
An animated video featuring our
mascot Captain Public Power
explains how public power utilities
make a difference.
[PublicPower.org>About]
Primers
Public 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]
Statistics
It’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 Guide
APPA’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 Templates
The 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]

HOWTORESCUE
YOURUTILITY
FROMASELLOUT
MINIMIZE
WEAKSPOTS
Addresswhateverissuesyoudo
findatyourutilitypromptly.
Conductregularorganizational
checkupsandkeepcustomersin
thelooponwhatyou’redoing.
COMMUNICATEWITH
COMMUNITYOWNERS
Remindcustomersthattheyown
theutilityandhaveavoiceinthe
decision-making.Nurturepride
inownershipsothey’llstand
behindyou.
TAKE
THEPULSE
Findoutwhat’sgoingon.What
docustomershateorlove?What
needswork?Whatarethemajor
challenges?Then,forma
strategybasedonwhatyoufind.
SCOPEOUTTHE
COMPETITION
Whatisthebuyeroffering?Better
rates?Betterreliability?Amore
diversifiedportfolio?Abetterdeal
forcustomers?

CHECKON
YOURCHARTER
Howyourcitydoesbusiness
affectshowyourutilitydoes
business.Youneedarobustlegal
foundationforefficient,reliable,
financiallysoundperformance.
CALLIN
REINFORCEMENTS
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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.
“WiththeInternet,[hackers]canaffectawide
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 start
The 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 combined
Lincoln 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.
1
2
3
4
5
6
7
8
9
10

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
DEFENDING
THE CASTLE
Key players in
cybersecurity
ESCC
DHS
DOE
NSC
FEMA
FERC
NERC
CONGRESS

FEDERAL ENERGY
REGULATORY
COMMISSION
Norman Bay
Chairman
Joseph McClelland
Director, Office of Energy Infrastructure Security
Michael Bardee
Director, Office of Electric Reliability, FERC
FEDERAL EMERGENCY
MANAGEMENT AGENCY
Craig Fugate
Administrator
NATIONAL SECURITY
COUNCIL
Michael Daniel
Special Assistant to the President,
Cybersecurity Coordinator
CONGRESS
House
Energy and Commerce Committee
Chairman Fred Upton (R-MI)
Ranking Member Frank Pallone (D-NJ)
Energy and Power Subcommittee
Chairman Ed Whitfield (R-KY)
Ranking Member Bobby Rush (D-IL)
Communications and Technology
Subcommittee
Chairman Greg Walden (R-OR)
Ranking Member Anna Eshoo (D-CA)
Permanent Select Committee on Intelligence
Chairman Devin Nunes (R-CA)
Ranking Member Adam Schiff (D-CA)
Homeland Security Committee
Chairman 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 Committee
Chairman Lisa Murkowski (R-AK)
Ranking Member Maria Cantwell (D-WA)
Select Committee on Intelligence
Chairman Richard Burr (R-NC)
Vice Chairman Dianne Feinstein (D-CA)
Homeland Security and Government Affairs
Committee
Chairman Ron Johnson (R-WI)
Ranking Member Tom Carper (D-DE)
Commerce, Science, and Technology
Committee
Chairman John Thune (R-SD)
Ranking Member Bill Nelson (D-FL)
NORTH AMERICAN
ELECTRIC RELIABILITY
CORPORATION
Gerry Cauley
President and CEO
Tim Roxey
Senior Director, E-ISAC and Chief
Security Officer
Marcus Sachs
Senior Vice President and Chief
Security Officer
DEPARTMENT
OF ENERGY
Ernest Moniz
Secretary of Energy
Elizabeth Sherwood-Randall
Deputy Secretary and Chief Operating
Officer
Patricia Hoffman
Assistant Secretary for the Office of
Electricity Delivery and Energy Reliability
Devon Streit
Deputy Assistant Secretary for Infrastructure
Security and Restoration
ELECTRICITY
SUB-SECTOR
COORDINATING COUNCIL
Kevin Wailes
Co-chair; Administrator and CEO of Lincoln
Electric System
Tom Fanning
Co-chair; Chairman, President and CEO of
Southern Company
Duane Highley
Co-chair; President and CEO of Arkansas
Electric Cooperative Corp.
DEPARTMENT OF
HOMELAND SECURITY
Jeh Johnson
Secretary of Homeland Security
Alejandro Mayorkas
Deputy Secretary of Homeland Security
National Protection & Programs Directorate
Suzanne Spaulding
Under Secretary
David Hess
Acting Deputy Under Secretary
Phyllis Schneck
Deputy Under Secretary for Cybersecurity
Andy Ozment
Assistant Secretary, Office of Cybersecurity
and Communications
Caitlin Durkovich
Assistant Secretary, Infrastructure Protection
@PublicPowerOrg #PublicPower

PROCEED
WITHCAUTIONBy Laura D’Alessandro
Integrated 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 coal
Low 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 hydro
Not 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 nuclear
When 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 Service
By 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 Power
By 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 know
Have 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 difference
We 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
attention
Neel 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
MDayak@PublicPower.org. n
awareness of public power.
GOING PUBLIC

Threat Detection and Vulnerability Assessments:
A Two-Track Approach
By 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
LASTWORD
COMMUNICATING 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 Haase
What: General Manager
Where: Navajo Tribal Utility Authority

Accounting
■ Public utility accounting
■ Advanced public utility accounting
■ Work order and asset management
accounting
Board Members and Policymakers
■ Strategic planning for utility boards
■ Sustaining public power’s value through
effective governance
Engineering and Operations
■ Overhead distribution systems
■ Distribution fundamentals and practices
■ National electrical safety code overview
■ Constructing, operating and maintaining
underground distribution systems
■ Safety training
All the TRAINING you want
WHEN you want it ■ WHERE you want it ■ HOW you want it
Financial Planning
■ Cost of service and retail rate design
■ Financial planning for municipal utilities
■ Distributed generation: cost of service
and rate design implications
Certiﬁcate Programs
■ Customer service management
■ Energy efﬁciency management
■ Key accounts
■ Public power manager
■ Public power governance
Learn more and book your custom
training — call 202/467-2921, email
EducationInfo@PublicPower.org, or
visit www.PublicPower.org (Click on
Programs>APPA Academy>In-house
Training)
Trying to address a variety of training needs for your utility staff? Turn
to the experts who make it easy and affordable. Bring our popular
APPA Academy programs to your location, and ask how we can tailor
courses to your needs.
90 PP Magazine In-House Ad.indd 1 1/8/16 11:41 AM

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