Joseph Krist

Publisher

NYS BUDGET

It took two extra weeks and lots of negotiations but New York State finally has a budget. It maintains effectively the status quo on taxes for individuals and corporations. It also replaces the complicated potency tax on cannabis. It will be replaced with a flat tax of 9 percent. Efforts to reduce school funding came up short. The state put aside $2.4 billion to help manage the ongoing migrant crisis in New York City.  Mayor Adams’s initial request was for $4.6 billion. The biggest win for the Mayor maybe the two-year extension of mayoral control over the city’s schools.

This budget was as much about what did not make the final cut as it was about significant policy changes. Environmental issues did not get the boost they have gotten in other years. The NY HEAT Act would have slowed the expansion of gas infrastructure by not automatically providing gas to all new customers who request it. The Climate Change Superfund Act would have required companies that contributed to the buildup of greenhouse gases to contribute to the cost of infrastructure upgrades so that the state could adapt to the various challenges brought on by climate change.

Tax increases did not have support. Another effort to impose some form of “millionaire’s tax” failed. The Assembly and the Senate were asked to support raising personal income taxes by half a percent for those who earn over $5 million until 2027. They said that such a move would increase revenue by nearly a billion dollars per year. This and another Legislature-supported bill to increase the state’s corporate tax were not included.

The far left had fought for a measure known as “good cause eviction,” which was intended to greatly limit annual rent hikes and aggressively restrict the reasons for which landlords could evict tenants. It passed in the final budget, but in a largely diluted form. There were a number of exemptions from good cause, including luxury buildings and landlords with 10 units or fewer. Outside New York City, localities may opt in to good cause instead of being required to do so.

NYC BUDGET – LOOK WHAT I FOUND

The Mayor released an updated budget proposal which is doing nothing to dispel the idea that the Mayor is not interested in meaningful financial disclosure. At the start of the year, the Mayor painted a fairly dire picture of the City’s finances. A disrupted office market, a still recovering economy and the ongoing migrant problem led the Mayor to propose a budget cutting the types of services which were sure to generate pushback from the electorate.

Throughout the first quarter of the year, the Mayor’s estimates of the City’s financial position have been questioned. The Citizens Budget Commission (CBC), the State and City Comptrollers, and the City Council have each published reports that estimate the City’s financial plan for fiscal year 2025 understates the cost of continuing current programs between $3.0 billion and $3.9 billion.

CBC found the Fiscal Year 2025 Preliminary Budget was $3.6 billion short of what would be needed to continue current services. The State Comptroller and City Comptroller reported the underbudgeting as $3.2 billion and $3.9 billion, respectively. The City Council, in its response to the Preliminary Budget, recommended setting aside $3.0 billion next year for this shortfall.

In the wake of those observations, Mr. Adams proposed a revised $111.6 billion budget, identifying an additional $2.3 billion of revenues. He cited better than expected tax revenue and his administration’s fiscal management. The varying revenue numbers reflect varying perceptions of the City’s financial outlook. In January, the City was in danger of being fiscally overwhelmed by the migrant crisis and a slow return to the office.

Now, the Mayor says “we made smart choices, trimmed agency and asylum seeker budgets and made conservative revenue forecasts. This, combined with better than expected revenues and a booming economy, resulted in a balanced budget.” So, which is it – boom or bust. The fact is that many city service levels have been slowed significantly by the fact that many departments remain understaffed. The budget “savings” are often derived simply from not filling positions.

BOEING AND AIRPORTS

The impact of ongoing safety issues with Boeing 737 aircraft is now beginning to flow through to operators and the airports they rely on. Southwest Airlines flies nothing but 737 aircraft. That has hurt demand from passengers and has also reduced Southwest’s ability to maintain and expand its fleet. This has driven the airline to announce service cuts.

Those cuts will result in eliminated service at four U.S. airports: Bellingham International Airport in Washington State, Cozumel International Airport, George Bush Intercontinental Airport in Houston and Syracuse Hancock International Airport. Reductions in service at Chicago-O’Hare and Hartfield Jackson Airport in Atlanta were also announced.

Southwest said it expected to get 20 new Boeing jets this year, down from the 46 it previously anticipated. The timing of the deliveries depends on the Federal Aviation Administration, which has limited Boeing’s production while it gets quality issues under control. The changes will reduce the airline’s personnel needs. The airline said it would limit hiring and end the year with 2,000 fewer employees.  It comes at a time when demand for travel has rebounded but increased costs and factors like the 737 Max grounding have not led to profitability for the airlines. Delta Air Lines was the only major airline to report a profit in the first quarter.

RURAL BROADBAND

Through the Bipartisan Infrastructure Law, the Federal Communications Commission (FCC) was tasked to develop and maintain the Affordable Connectivity Program (ACP) – a federal program that offers eligible households a discount on their monthly internet bill and a one-time discount off the purchase of a laptop, desktop computer, or tablet. Over 23 million eligible households are currently enrolled and receiving the monthly discount.

The $14.2 billion Congress initially made available for the ACP is running out. Due to the lack of additional funding for the ACP, the Commission has announced that April 2024 will be the last month that the ACP households will receive the full ACP discount, as they have received in prior months. ACP households may receive a partial discount in May 2024. After May 2024, unless Congress provides additional funding, ACP households will no longer receive the ACP benefit and the ACP will end.

BRIGHTLINE

Florida’s Brightline high speed rail service has progressed to the point where the credit was finally deemed ready for its ratings’ closeup. Unsurprisingly, investment grade ratings were assigned albeit at the lowest level. The credit would not have sought a rating if an investment grade rating was not expected. Several factors still weigh on the ratings. S&P noted that it believes that revenue will be less than Brightline projects; 38% to 55% in the best-case scenario and 52% to 71% in the worst.

S&P believes that ridership will take longer to stabilize than Brightline projects; by 2028, not 2026. Brightline may attract 11% of the long-distance travelers between Miami and Orlando, and 0.5% of short-distance travelers between the five South Florida stations. After the Miami-Orlando service stabilizes, it will account for over 80% of total ridership and 87% of total revenue. Long-distance ridership was 51% in January and February, with 236,577 riders.

Prices will increase throughout 2024 as promotional introductory offers are phased out. Long-distance ridership was 3.4% less than S&P forecast for the last three months of 2023, but 24.7% more than it forecast for January. Revenue was 19.3% and 9.8% less, respectively. Short-distance revenue was higher than S&P forecast, with lower ridership and higher ticket prices being “consistent with Brightline’s strategy as it rolls out long-distance service.” Total daily bookings increased 50% from 2,819 in October to 4,224 in January. Repeat customers doubled from 715 in October to 1,437 in January.

Against this backdrop, the refinancing of the debt issued for the existing Brightline service began this week. In addition to the aforementioned investment grade debt insured debt was also issued. One tranche of debt was issued for the expansion of Brightline to Tampa from Orlando. That debt was sold on an unrated basis at yields of 12% on 29 year paper. That’s not a typo.

ROAD FUNDING

On the May 21, 2024 ballot, voters in Portland, OR will vote on whether to renew a 10 cent-per-gallon gas tax for road repairs next month. The gas tax was first approved by voters in 2016 with a 53% majority and renewed in 2020 with a 77% majority.  According to the City if the measure passes, the average driver would continue to pay roughly $5 per month for the tax. This figure is based on driving 12,000 miles a year in a vehicle with a fuel efficiency of 20 miles per gallon, with all fuel purchased within the city of Portland. If passed it is estimated the $0.10 gas tax would generate $70.5 million over four years for street maintenance and safety projects.

ARIZONA HOMELESSNESS ON THE BALLOT

The Arizona Property Tax Refund for Non-Enforcement of Public Nuisance Laws Measure is on the ballot in Arizona as a legislatively referred state statute on November 5, 2024. A “yes” vote supports allowing for property owners to apply for a property tax refund if the city or locality in which the property is located does not enforce laws or ordinances regarding illegal camping, loitering, obstructing public thoroughfares, panhandling, public urination or defecation, public consumption of alcoholic beverages, and possession or use of illegal substances.

A property owner can apply for this refund once every tax year. The amount of the refund under this measure would be equal to the documented expenses incurred by the property owner, but cannot exceed the amount the property owner paid in property taxes in the prior tax year. If the total refund is more than this amount, the refund will be equal to the amount the property owner paid in property taxes in the prior tax year. The property owner can apply to the department for the remaining portion of the refund in following tax years.

Under this measure, after the property owner applies for a refund, the town, city, or county has 30 days to accept or reject the refund. If the refund is accepted, the refund will be paid to the property owner. If the refund is rejected, the property owner can file a cause of action in the superior court of the county to challenge the rejection of the refund. If the town, city, or county does not respond after 30 days, the property owner will receive a refund. This measure provides that if the city, county, or town continues to not enforce existing public nuisance laws in the following tax year, a property owner is entitled to another refund.

ELECTRIC VEHICLES

Workers at a Volkswagen plant in Chattanooga, Tennessee made history last week when 73% of its workers voted to join the United Auto Workers. The expansion of the auto industry into the Southeastern US was aided in many ways by the fact that the region is much less supportive of unions. Over that approximately half century of gradual movement to the South, a number of factors changed which provided workers to revisit the issue of unionization.

When the auto industry continued to decline, job security trumped wage growth. Over time, auto workers saw plants closed, jobs reduced and a steadily weakening economy away from autos. The financial crisis in 2008 and the financial collapse of legacy US automakers changed the dynamic. The auto rescue was a product of all stakeholders making sacrifices. For the workers those sacrifices involved wages and benefits.

Since that time, many of the dynamics of the industry have shifted. The return to financial health and the shift to the production of electric cars created a new set of circumstances. The successful strikes against the legacy manufacturers in the Fall of 2023, provided for the first time in years an example of the benefits of unionization. That success came at the same time that the development of new manufacturing capacity is creating demand for workers. Much of the new plant is being built for non-US producers. Those companies have significant experience with organized labor in their home countries. It is not a surprise that a company like Volkswagen was targeted for organizing given the role of unions in company management in Germany.

Japanese automakers announced new manufacturing capacity to support electric vehicle production in the US. Toyota announced that it would expand a factory in Princeton, Ind., to produce a large electric S.U.V. The company, the world’s largest automaker, will spend $1.4 billion on the Indiana project and create as many as 340 new jobs. Honda announced plans to retool its flagship factory in Marysville, Ohio, near Columbus, to produce electric vehicles in 2026. Honda is investing $4.4 billion in a new battery factory in Jeffersonville, Ohio Along with LG Energy Solution, a South Korean company.

WIND HEADWINDS

Last fall, the New York Public Service Commission rejected a request for higher prices from several offshore wind developers. The PSC decision is seen as having served as an effective limit that likely constrained the New York State Energy and Research Development Authority’s (NYSERDA) negotiations because it said no price increases for competitively awarded projects.

Now NYSERDA announced that no final agreements could be reached with three projects that received provisional awards in October of last year. The projects that were negotiating contracts are the 1,404 MW Attentive Energy One project being developed by TotalEnergies, Rise Light and Power and Corio Generation; the 1,314 MW Community Offshore Wind project developed by RWE Offshore Renewables and National Grid Ventures; and the 1,314 MW Excelsior Wind developed by Vineyard Offshore with backing from Copenhagen Infrastructure Partners.

Those projects all had in common the fact that they depended on major supply chain investments by General Electric including a larger turbine it planned to build. In February, it was reported that GE had decided not to proceed with development of an 18 megawatt turbine. A smaller turbine means a project would need more individual turbine locations to deliver the same power — and the costs would have been higher. NYSERDA confirmed that was the main reason no final awards were made.

NYSERDA had also tentatively awarded $300 million to GE Vernova and LM Wind Power for investments in nacelle and blade manufacturing at new facilities along the Hudson River near Albany. That money will be made available through a new competitive solicitation. New York also has pending contracts still in the works for the two early projects that were the subject of contract renegotiations which resulted in significantly higher costs. The two projects are the 810 MW Empire Wind 1 developed by Equinor that is south of New York City and the 924 MW Sunrise Wind developed by Orsted and Eversource off the northeast tip of Long Island.

NYSERDA’s schedule calls for those contracts to be finalized by the end of June. Those projects are expected to be online by late 2026.

COAL REGULATION

The US EPA has released long awaited regulations for the continued operation of coal fired generating plants. The regulation from the Environmental Protection Agency requires coal plants in the United States to reduce 90 percent of their greenhouse pollution by 2039, one year earlier than the agency had initially proposed. Three additional regulations include stricter limits on emissions of mercury from plants that burn lignite coal, more tightly restrict the seepage of toxic ash from coal plants into water supplies and limit the discharge of wastewater from coal plants.

There are about 200 coal-burning power plants still operating in the US. In 2023, coal-fired power plants generated 16.2 percent of the nation’s electricity. EPA estimates that the rule would cost industries $19 billion to comply between now and 2047. Under the plan, coal plants that are slated to operate through or beyond 2039 must reduce their greenhouse emissions 90 percent by 2032. Plants that are scheduled to close by 2039 would have to reduce their emissions 16 percent by 2030. Plants that retire before 2032 would not be subject to the rules.

NORTH AMERICAN TRADE

The US Department of Transportation Bureau of Transportation Statistics recently reported Total Transborder Freight by Border in February 2024, Compared to February 2023.  Total transborder freight: $128.9 billion of transborder freight moved by all modes of transportation, up 7.5% compared to February 2023. Freight between the U.S. and Canada: $61.9 billion, up 4.4% from February 2023. Freight between the U.S. and Mexico: $67.0 billion, up 10.6% from February 2023.

Trucks moved $83.4 billion of freight, up 9.9% compared to February 2023. Railways moved $17.1 billion of freight, up 2.8% compared to February 2023. Vessels moved $10.0 billion of freight, up 15.7% compared to February 2023. Pipelines moved $8.1 billion of freight, down 15.2% compared to February 2023. Air moved $4.6 billion of freight, up 16.1% compared to February 2023

So, which are the localities which benefit from cross border activity? Detroit and Port Huron MI, and Buffalo are the top truck ports for U.S. freight flows with Canada. Laredo and El Paso TX and Otay Mesa, CA are the top truck ports with Mexico. Detroit, Port Huron, and International Falls, MN are the top rail connection ports for U.S. freight flows with Canada, while Laredo, Eagle Pass, and El Paso in Texas are the top rail connection ports with Mexico.

Chicago, Port Huron, and Minneapolis are the top pipeline connection regions for U.S. energy freight flows with Canada. El Paso, Hidalgo, and Laredo, TX are the top pipeline connection regions with Mexico. Port of Boston, Arthur, and Portland are the top water port connections for U.S. energy flows with Canada. Port of Houston, Arthur, and Texas City are the top water port connections for U.S. energy flows on the Southern border.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Joseph Krist

Publisher

ILLINOIS PUBLIC POWER CHALLENGE

A legislative proposal would require Illinois’ municipal power agencies to regularly conduct transparent energy planning. It specifically requires that municipal utilities file integrated resource plans with the state every three years. The process would involve assessing demand and supply resources to meet electricity needs at the lowest cost, while meeting reliability requirements, evaluating how energy markets and prices are going to evolve and managing that risk moving forward. 

Illinois does not currently require electric cooperatives, municipal power agencies or municipal utilities to have these plans. It is driven primarily by greater Chicagoland local municipal providers. The dependence of these utilities on a predominantly coal based provider (Illinois Municipal Power is the main owner of the Prairie States generation facility) is generating customer challenges to their local asset mix.

CALIFORNIA NET METERING

This week was the one year anniversary of the California Public Utility Commission’s (CPUC) decision to revise the state’s net metering scheme in ways highly unfavorable to rooftop solar. Those rules are seen as the primary culprit contributing to a huge slowdown is sales of rooftop solar. Now, two pieces of legislation are making their way through the California legislature to address the impact of last year’s rulemaking.

AB 2256 would require that the CPUC consider a number of values these groups say were left out of its net-metering analysis, including improved local air and water quality, avoided land use impacts and other ​“non-economic” benefits.  AB 2619 is designed to ​“ensure that incentives are restored for residents who generate clean power for the grid,” according to a statement from Assemblymember Damon Connolly (D), the bill’s author. It would repeal the ​“damaging” decision — commonly known as ​“NEM 3.0” to distinguish it from the state’s two previous net energy metering (NEM) regimes — and force the CPUC to create new rules aimed at keeping rooftop solar growth on the trajectory needed to meet California’s long-range climate goals.

California’s three investor-owned utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, are the primary opponents of these bills.

NEW YORK STATE BUDGET

New York State leaders have agreed on the outline of a $237 billion state budget. If it is approved by the Legislature, the budget represents an $8 billion increase from last year’s spending plan. The plan includes $2.4 billion to help New York City address its migrant crisis.  A token portion of that funding includes $500,000 of which is drawn from state reserves. The plan, however, includes provisions for the state to have increased its reserves by more than 10 percent from when Ms. Hochul took office.

The state’s botched rollout of legal recreational cannabis received some attention. For the first time, localities will have the authority to act against illegal cannabis vendor which have been a source of contention especially in NYC since the state legalized recreational marijuana in 2019. The taxation scheme used in the program will be significantly altered. It relied on taxing based on its potency. Instead, taxes will now shift to a flat percentage tax.

Local smaller and rural school districts had been facing significant state aid reductions to many of those districts. The Governor had proposed to repeal a provision called “hold harmless” that ensures all schools receive as much in funding each year as they did the year before. The governor has argued that the provision leads the state to spend too much in districts with falling enrollment, even as other districts are growing. As we went to press, the issue of the renewal of mayoral control of the NYC school system was still unsettled.

The issue of housing development was at the center of the over two week delay beyond the start of Fiscal year 2025 in the enactment of a budget. The trends in housing across all sectors of the state have all been negative from both supply and affordability points of view. The legislature has agreed to a plan which would make the process of increasing rents more difficult for landlords. Landlords of many market-rate units will be forced to justify rent increases beyond certain thresholds. They would also be required to offer lease renewals in most cases.

WEST COAST PORTS

The Port of Portland says it cannot afford to keep the state’s only shipping container terminal open past September after negotiations with a third-party operator fell through. Despite more favorable utilization metrics, costs have gone up. This has driven operating results of the port’s container facility into negative territory. Portland will be the largest city on the West Coast without close proximity to container service.

Throughout much of the last decade, a labor feud coupled with the logistical challenges of navigating container ships some 100 miles upriver to a relatively small market have made Portland’s Terminal 6 less competitive as a transit point for container goods. Container operations have stopped at Terminal 6 in previous years due to labor issues. Most recently, in 2015 the then two main carriers representing more than 95% of the port’s container services announced they would no longer call on Portland. The carriers complained that labor issues made operations less efficient and mor costly.

In 2019, a jury found the International Longshore and Warehouse Union (ILWU) engaged in unfair labor practices. The private operator at the time was awarded $93 million. The award was reduced on appeal to $19 million. The union subsequently declared bankruptcy. The private operator of the terminal “reached a settlement of all legal claims” with ILWU in February for $20.6 million.

The Port has notified the governor and legislative leaders of the closure, in addition to carriers, dock workers and staff. Earlier this year, Port leaders had asked the Oregon Legislature for $8 million in state support, but the legislature did not make an appropriation. The next closest shipping container terminal is in Tacoma, Washington. The overall Port credit is rated AA-. Marine operations accounted for about 25% of overall revenues which are driven by the City’s airport. The rating should be fine.

The Port of Los Angeles is on an entirely different path. Like Portland but to a lesser degree, labor relations have been problematic. Since a new contract was reached last year, the Port has been able to focus on operations. The Port of Los Angeles handled 743,417 container units in March, a 19% increase over the previous year. It was the eighth consecutive month of year-over-year growth. For the first quarter ending March 31, local dockworkers moved 2,380,503 Twenty-Foot Equivalent Units (TEUs) across Los Angeles marine terminals––nearly 30% more than 2023. It was among the Port’s best first quarter starts, behind only the pandemic import surge in 2021 and 2022. 

CARBON CAPTURE

The Illinois State Legislature is considering several bills designed to strengthen the State’s regulatory abilities over carbon capture, both pipelines and sequestration. The proposals come in the wake of efforts by two pipeline developers to secure local permits to develop projects. Other efforts are expected from sequestration providers. Companion bills are in front of each house. Separate bills (HB 4835, SB 3441) would place a moratorium on carbon dioxide pipelines for four years or until new federal safety regulations are adopted by the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Two other bills would create a regulatory framework for the sequestration industry. Overall, the newly proposed legislation is intended to cover issues including: “pipeline setbacks for safe evacuation, limits on eminent domain, expanded monitoring at carbon sequestration sites, provisions for long-term liability in the event of disaster, a ban on the use of captured carbon dioxide for enhanced oil recovery.”

It would also mandate that when sequestration sites are proposed, regulatory agencies review life-cycle greenhouse gas emissions and consider alternatives to carbon sequestration. The legislation bans injecting carbon dioxide through the Mahomet Aquifer, labeled by the U.S. EPA as the area’s only sole-source aquifer. And it would mandate halts in sequestration if certain magnitudes of seismic activity are detected.

There have been other efforts to deal with these issues. As it becomes clear that proposed federal tax credits are driving project developments, the State finds itself in the position of not having an established regulatory framework for the evaluation of projects in the carbon pipeline and sequestration spaces. One example is that currently there are no requirements that companies create or release models showing how a carbon dioxide plume would likely spread in case of a rupture. The new bill would require such modeling for a necessary Illinois EPA permit. And it would mandate companies put up funds for future cleanup and maintenance of sequestration sites.

Another bill (SB 2860), backed by the Illinois Farm Bureau, would prohibit the use of eminent domain to secure carbon dioxide pipeline rights of way. One bill (HB 0569) in support of the industry would allow sequestration operators to use underground pore space even if landowners are opposed, while setting procedures for land access and compensation for damage to land. Pore space is a concern particular to Illinois and its unique geology.

In Florida, Hillsborough County (Tampa) approved a pilot project at its waste-to-energy facility in Brandon, FL. The facility currently produces some 600 tons of carbon dioxide a day. A South Korean company wants to install equipment which would remove 1 ton per day carbon and convert it to calcium carbonate. That byproduct could be sold to the concrete and construction industries. The company is required to sell the calcium carbonate and give the records (but not the proceeds) to the county so it can assess how valuable the product is.

A permanent facility was proposed by the company, LowCarbon. It was initially rejected by county staff. It would have cost nearly $25 million and captured 40 tons of carbon dioxide. In a revised proposal submitted on March 28, the company offered to build a permanent facility that could capture 100 to 400 tons of carbon. The pilot project would provide 60 days’ worth of data for the county to evaluate.

CALIFORNIA AND UNEMPLOYMENT

The emphasis on issues like homelessness, the environment and natural disasters in California has allowed some significant issues to be overlooked. As is the case in many states, the current budget cycle is the first to force states to fully absorb the cost of programs funded in response to the pandemic. In some cases, it was direct federal funding that covered recurring expenses. In others, it was substantial borrowing undertaken to respond to the economic impact of the pandemic limits on economic activity.

One of those issues is the funding of unemployment payments to individuals. California is now coping with an accumulated debt to the Federal government of $21 billion from borrowing to fund unemployment. Since the end of the pandemic, the tech industry has also undertaken significant layoffs. Payroll taxes paid by employers cover payouts to unemployed workers but also a state surcharge and a gradually increasing federal surtax to help pay off the principal on the debt. 

There are also certain things about the California unemployment situation which are state specific. The state currently accounts for about 20% of the nation’s jobless claims, far in excess of its 11% share of the labor force population. Unemployed workers in California tend to remain on unemployment significantly longer than the national average. California’s employers added 28,300 nonfarm payroll jobs in March 2024 and the unemployment rate held steady at 5.3 percent.

California’s unemployment insurance fund became insolvent during 2020. The federal government via the CARES Act and the American Rescue Plan Act waived interest through September 6, 2021. Therefore, no interest was due on September 30, 2020. However, interest started accruing on September 7, 2021, and the first interest payment of $29.2 million was paid on September 30, 2021. California paid a second interest payment of $333.5 million on September 30, 2022, a third interest payment of $301.6 million on September 30, 2023, and a $550 million payment on September 30, 2024.

The state had hoped to devote $1 billion to loan repayment but the unexpectedly weak fiscal position of the state has taken that option off the table. The state’s unemployment insurance program will instead would rely on increased federal taxes on employers to pay down the debt. Currently California employers pay a federal unemployment insurance tax of 1.2% on the first $7,000 of wages per employee, but that will rise incrementally every year so long as California is in debt, to more than 3.5% after 10 years. 

The state collects an unemployment insurance tax on the first $7,000 of wages per employee per year. Many states have a much higher wage threshold — New York at $12,500; New Mexico at $31,700; and Washington state, at $68,500. Changes in the rate and/or wage threshold are being looked at in the ongoing state budget process in CA.

WHAT WAS THE LESSON?

The South Carolina legislature is considering legislation designed to facilitate the construction of a gas fired generation plant to be owned by Dominion Energy and state-owned utility Santee Cooper. It would allow the utilities to build a natural-gas fired power plant in the Lowcountry. It would provide for faster approval of pipelines needed for the project. The bill also includes items like reducing the Public Service Commission which oversees utilities from seven members. It attempts to influence regulation by requiring regulators to consider the health of utilities as well as the needs for ratepayers as they make decisions and allowing utilities to release less information about some projects from the public before they are approved.

The issue the legislation seeks to address is arguably how the State managed to take a strong asset like South Carolina Public Service Authority (Santee Cooper). Customers who are now shouldering the bills for the failed effort to expand nuclear capacity would likely say that eased oversight and less disclosure are not the answer to their problem.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Joseph Krist

Publisher

RECONDUCTORING

It is a word which you are likely to hear more about. Transmission access and capacity are increasingly viewed as obstacles to the adoption of renewable energy generation. The development of new transmission infrastructure faces extended regulatory processes. This motivates electrification advocates to seek answers which can provide some relief from existing infrastructure. One technological advance which is receiving a lot of media attention is reconductoring.

Reconductoring is the process of replacing conventional aluminum conductor steel reinforced cables with advanced conductors. It does not expand the footprint of the wiring infrastructure. This reduces the relative cost versus the construction of new transmission lines. The suggestion comes as the already lowering costs of clean energy.

GridLab is a Berkeley, CA based clean energy technology advisory entity. It does research and provides access to individuals with expertise in the many issues associated with clean energy. A new report from GridLab highlights the potential of reconductoring to provide a significant capacity addition to the nation’s transmission system within the existing corridors.

The report found that the declining costs of clean energy and growing power demand from electrification, manufacturing, and data processing have made grid capacity one of the primary constraints in the energy transition. Transmission capacity across the U.S. has grown only 1%/year over the past decade. Over 2 terrawatts (TW) of available generation and storage resources today remain untapped, awaiting grid access in interconnection queues. When advanced conductors are used, reconductoring in existing rights-of-way (ROW) can substantially increase transmission capacity in the current grid.

Among the conclusions the report reflects: not only can advanced conductors increase power density by up to 100% along existing ROW, but also that these technologies are being widely and successfully deployed in many nations around the globe. considering the challenges of building new lines, reconductoring can increase interzonal transmission capacity by nearly four times (+280%) by 2035 versus greenfield expansion only, with only 20% higher transmission expenditures over the same period. Second, reconductoring projects typically cost less than half the price of new lines for similar capacity increases.

The discussion coincides with estimates from providers of power of their transmission needs. ISO New England the regional grid provider, released its 2050 Transmission Study. It is the first the regional grid operator has undertaken examining the region’s transmission system in detail beyond the traditional 10-year planning horizon. The study estimates the region will need to invest between $16 billion and $26 billion on transmission infrastructure over the next 26 years to ensure a reliable clean energy transition.

MICHIGAN EV PLANT

The electric vehicle industry is going through a period of retrenchment as profitability has so far eluded the manufacturers. Rivian is delaying the development of a manufacturing facility in Georgia and consolidating production in Illinois. Ford and GM have experienced disappointing sales growth and profitability. Tesla sales are slowing. This has raised fears that massive support provided by states to EV manufacturers is not generating the expected returns on investment.

Ford had originally announced the development of an electric vehicle battery production facility in Michigan. The state offered some $2 billion in tax and other incentives including a local tax break worth about $772 million, $330 million for road upgrades, and a $210,000 job-creation grant that would go directly to Ford once it hires at the facility. When announced in February, 2023 the projection was for the creation of 2,500 permanent jobs. That was reduced to 1,700 in the Fall.

Ford originally expected to build a 2.3 million-square-foot production facility for lithium iron phosphate (LFP) batteries. The automaker’s footprint in Marshall is just over 500 acres, the site plan shows, compared to the 730 acres originally planned. Today’s construction reflects a 1.2 million-square-foot production building, a reduction of nearly one-half. Ford added a 600,000-square-foot packing plant to the west of the production building. 

Given the lower amount of Ford’s investment, the pressure is on to recalculate the proper level of incentives from state and local government. If the expected economic impact from the tax incentives declines by 25%, many believe that the state’s subsidies should be reduced by a similar amount.

SMALL COLLEGE CLOSURE

The Goddard College Board of Trustees announced on April 9 that the institution will close at the end of the current semester. The Board came up with several attempts by Goddard to become financially viable which all proved unsuccessful. It had sought out educational partners and laid off staff. In January, it shifted its course offerings to on line only in what was described at the time as a temporary move. But, in the end, that strategy was not sufficient to save the college. the number of Goddard students plummeting from more than 1,900 in the 1970s to only 220 currently.

The Plainfield, VT institution joins Poultney’s Green Mountain College, Bennington’s Southern Vermont College, The College of St. Joseph in Rutland, and Marlboro College in Marlboro in ending operations over recent years. Goddard was one of the quirkier colleges whose reputation and demand were based on its unique structure. The decline in demand for that sort of curriculum and approach decimated its ability to fund from tuition.

Combine the looming demographic trends which are projected to lower demand across the board for higher education and the outlook for Goddard was bleak. The Trustees have now decided to close and the campus is reported to be up for sale.

DETROIT

Detroit has made the long trek back to an investment grade rating from the major rating agencies with S&P following Moody’s last month in moving the credit to investment grade. It culminates a decade long process which began with the City’s bankruptcy. S&P noted Detroit’s flexibility from operating reserves, the Retiree Protection Fund and stimulus funds and its “commitment to maintaining balanced operations.”

“The city has shown continuous operational and financial improvements that have allowed it to make significant strides to solidify its financial and economic position to a point that supports a BBB rating,” The rating agency also nodded to Detroit’s “achievable” pensions strategy, strong pipeline of economic development and the “disciplined planning and budget oversight” of the city’s management team.

A change in Detroit’s pension funding policy this year was reflected as the city changed its funding to a level principal amortization instead of a level dollar policy thereby leading to higher pension contributions. These were funded with increased draws on the Retiree Protection Fund rather than the operating budget. S&P notes that that the city has met all the requirements of its post-bankruptcy Plan of Adjustment, and has often “exceeded expectations.” The rating is limited despite these improvements as the City faces significant budget pressures not unlike those of many other older northern cities.

CRYPTO AND POWER

The U.S. Energy Information Administration estimates that mining for bitcoin and other digital currencies accounts for 0.6 to 2.3 percent of the nation’s electricity use. It is admittedly an educated guess at best. Recent growth is largely due to cryptocurrency mining operations relocating to the United States from China after that country cracked down on digital currency mining in 2021. The demand being generated by crypto currency activities is in the center of the issue of supply adequacy.

Assuming the share of global activity in the United States remains approximately 38%, USEIA estimates electricity usage from Bitcoin mining based in the United States to range from 25 TWh to 91 TWh. That estimate represents 0.6% to 2.3% of all United States electricity demand in 2023, which was 3,900 TWh. This estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million to more than six million homes. USEIA identified a total of 137 facilities to date; there are only 52 facilities of those for which there is location and capacity data. Those sites are located in 21 states, with most in Texas, Georgia, and New York.

In Arkansas, the Legislature is revisiting legislation passed last year to support the growth of crypto mining in the state. The Arkansas Data Centers Act of 2023, or Act 851, which prevents local governments from passing noise and zoning ordinances specifically aimed at crypto mines. The Senate sponsor of the bill cites the increasing number of “bad actors” in the industry and increasing complaints from residents of host locations.

Several other proposed bills are being considered. They deal with who should regulate the industry, the establishment of new fees associated with crypto mining operations, siting issues, notice requirements before the start of operations at sites, and limits on foreign ownership.

NUCLEAR AND CLIMATE CHANGE THREATS

The GAO just released a study commissioned by Congress to review the climate resilience of energy infrastructure. The report examines (1) how climate change is expected to affect nuclear power plants and (2) NRC actions to address risks to nuclear power plants from climate change. The study notes that all operating and shutdown nuclear power plants are located in areas where climate change is projected to increase measures of heat, including daily and average maximum temperature.

The effects of climate change on maximum temperatures are projected to be most severe in the South, where one-third of the plants are located. The plants in the South are projected to experience an annual average of from 21 to 31 days with higher maximum temperatures than historical high temperatures. About 20 percent of nuclear power plants (16 of 75) are located in areas with a high or very high potential for wildfire. More specifically, more than one-third of nuclear power plants in the South (nine of 25) and West (three of eight) are located in areas with a high or very high potential for wildfire.

About 63 percent of nuclear power plants (47 of 75) are located in areas with exposure to either Category 4 or 5 hurricane storm surge or high flood hazard, and nine are located on a coastline, where NOAA projects a range of sea level increases. In addition, 20 percent of nuclear power plants (15 of 75) are located in areas with exposure to both Category 4 or Category 5 hurricane storm surge and high flood hazard.

Some 60 of the 75 nuclear power plants in the United States are located in areas with high flood hazard and two are in areas with moderate flood hazard. Just over one-third of the plants (21 of 60) located in areas with high flood hazard are in the South. About 23 percent of nuclear power plants (17 of 75) are located in areas that may be inundated by storm surge from Category 4 or Category 5 hurricanes. All 17 of these plants are in the East and South, and the six plants with exposure to Category 5 hurricanes are located in the South

About 23 percent of nuclear power plants (17 of 75) are located in areas that may be inundated by storm surge from Category 4 or Category 5 hurricanes. All 17 of these plants are in the East and South, and the six plants with exposure to Category 5 hurricanes are located in the South.

JEA MANAGEMENT UPHEAVAL

The attempt to privatize the City of Jacksonville, FL electric system four years ago led to federal criminal investigations and charges against members of management including the CEO and CFO. The potential for individuals to profit from the proposed sale led to increased scrutiny from the public and city government. Now, the former CEO of JEA has been found guilty of conspiracy and wire fraud in connection with a scheme that would have resulted in the CEO and other JEA executives making millions in bonuses if the utility was sold to a private buyer.

Now, the CEO appointed to replace the now convicted CEO is under pressure to resign. It turns out that the utility owned by the City is being run by managers operating remotely as they don’t live in Jacksonville. Questions have been raised over spending by JEA on a variety of events usually associated with private entities which focused attention on management. Many of the actions under question are not unusual in a private sector setting but the expectation for a municipally owned entity is to operate in a more cost conscious way. The point of a public utility is to provide a service on a cost of service basis, not to enrich management.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Joseph Krist

Publisher

Can we pick a week to take off or what? It never fails. New York doesn’t have a budget and its all to do with housing. While most magnified in NYC, housing is increasingly a statewide issue. Even in the rural counties. Its going to take a complex deal to settle things and then the budget will move forward. The project to clear the shipping channel in Baltimore is underway and funding for that is not a problem. The replacement bridge – who knows in the current Congressional environment. Opening Day in MLB sees in the official departure from Oakland. Voters in Jackson County, MO sent a message to the ownership of both the NFL and MLB by a huge margin. D.C. will keep its teams.

PORT OF BALTIMORE

The port handled more than 444,000 passengers and 52.3 million tons of foreign cargo valued at $80 billion in 2023 – including 750,000 automobiles. Over 30,000 vehicles cross the Francis Scott Key Bridge on a daily basis. The port accounted for 28% of coal exports in the United States in 2023, according to census data, second only to Norfolk, Virginia.

According to the U.S. Energy Information Administration, there are two full-service terminals that receive, store, and load coal onto oceangoing vessels at the port: the Curtis Bay Coal Piers served by the CSX Railroad, and the CONSOL Energy Baltimore Marine terminal, served by both the CSX and Norfolk Southern Railroads. Baltimore primarily exports coal from the northern Appalachia coal fields in western Pennsylvania and northern West Virginia.

About half of the 28 million short tons of coal exported from the port in 2023 went to India, according to the administration. Baltimore primarily exports coal from the northern Appalachia coal fields in western Pennsylvania and northern West Virginia. About half of the 28 million short tons of coal exported from the port in 2023 went to India, according to the administration.

The beneficiaries: the Port of New York/New Jersey and the Virginia ports. CSX has already announced that it is rerouting coal to New York given its rail track ownership in that area.

D.C. KEEPS ITS TEAMS

Ted Leonsis, the principal owner of the NBA Wizards and NHL Capitals signed a letter of intent formalizing an agreement between his parent company, Monumental Sports and Entertainment, and the District of Columbia. The deal would keep the two franchises at their current downtown location through 2050. The teams had tried to reach an agreement with the Commonwealth of Virgina and the City of Alexandria for an arena/real estate deal. That plan required approval from the Virginia legislature.

That was the rub. The Governor was a huge backer of the plan but it did not have the broad political support that was needed in the Commonwealth. Local government in D.C. was much quicker to coalesce around a plan in response which supported local opposition to moving the teams. There was no disagreement about the role of the arena in development in the District’s Chinatown. Nevertheless, the agreement does not come cheaply.

Monumental would receive $500 million in cash from the city to renovate twenty seven year old Capital One Arena; another $15 million would go to improve a street connection that connects the arena to the adjacent Gallery Place building. The team will also get control of scheduling at the arena and a guaranteed police presence from the City. 

Now the question is whether the City is willing and able to put a package together to support a new stadium for the Washington Redskins. That remains to be seen.

The move to Virginia ran into significant opposition. The owner admits that he completely misread local sentiment. He based his move on the idea that the metro area was one big entity and found to his surprise that “a large share of residents of the District, Virginia and Maryland consider those areas different entities.”

K.C. STADIUM VOTE

The owners of the K.C. Royals and the Chiefs are going back to the drawing board after Jackson County, MO voters delivered a stunning rebuke to their threats to move out of Missouri across the river to Kansas. A ballot initiative to extend an existing 3/8 of one cent sales tax for twenty five years was defeated by a 16 point margin. In the current environment, a 16 point loss is a landslide. Now the owners are left to either act on their threats to move or come up with financing with a much smaller share of government funding.

The vote was driven by the potential for the Royals to move from their suburban location to a downtown site. There was a case to be made for a new baseball stadium to be a redevelopment driver. Ownership however, could not come up with a firm plan and could not even articulate a preferred location. On the Chiefs side, ownership saw an opportunity to piggyback on the baseball project to get fun ding for renovations to Arrowhead Stadium

It did not help that the Chiefs’ owner undertook a tone-deaf campaign that undermined his case. He is seen as a classic case of second generation wealth. He also wasn’t helped by the release of an NFL Players Association poll which sought player attitudes towards the stadium itself but also of Mr. Hunt as an owner. The stadium was rated as among the league’s worst and the owner was cited for underinvestment in facilities. He came off looking like a cheapskate who was now looking for a government handout.

OAKLAND

Construction has not yet begun on the Oakland A’s new stadium in Las Vegas. It is not expected to be complete until the 2028 season. The A’s lease at the Oakland Coliseum is set to expire after the 2024. This week, the City of Oakland offered a five year extension to the lease. It would have provided for an opt-out clause after three seasons and requires the team to pay $97 million as part of an extension fee.

The offer came as the city has dropped previous requirements that called for MLB to keep the A’s name and colors in Oakland, as well as a demand that MLB guarantee the city a future expansion team. Staying in Oakland, or playing in Sacramento, would enable the team to retain their rights to their local broadcasting money. 

That is a major factor behind the latest announcement that the A’s have reached an agreement to play in Sacramento while a new home is constructed in Las Vegas.

This week, the Tropicana Las Vegas closed its casino for the last time along with its hotel. The demolition will open up a 35 acre site for which 9 acres will be dedicated to a new ballpark for the A’s. The current season will be the last for the A’s in Oakland.

TRI STATE LOSES ANOTHER

Tri-State Generation and Transmission Association is set to lose another participating distribution customer. La Plata Electric Association (LPEA) is obligated to purchase at least 95% of its power from Tri-State through 2050. Its customers want more electricity from renewable sources. The situation mirrors that of the other participants who have withdrawn from Tri-State. The formal decision by LPEA triggers a two-year exit period.

The move occurs pursuant to an agreement between the Federal Energy Regulatory Commission, Tri-State and LPEA. LPEA wants out of its contract with Tri-State because it has been unable to have direct control over its own rates or ability to seek clean energy opportunities. As has been the case with other withdrawn participants, the size of the exit fee required is a point of major contention. Tri-State’s initial price of exit: $209.7 million.

COAL REVERSAL

One year ago, Rocky Mountain Power announced the planned early closure of two coal fired power plants in Utah. The plan was to employ modular nuclear generators to replace the coal based power. Since then, a number of developments have impacted that decision. One has been the difficulty of getting modular nuclear started. The other is the impact of federal court decisions on the ability of the U.S. EPA to enforce regulations which limit the operations of coal plants to reduce or eliminate air pollution impacts on neighboring states.

The courts have significantly hindered the ability of the EPA to limit coal plants based on their generation of pollution into other states. Now, in light of the limits on EPA regulation, Rocky Mountain Power has decided to abandon its efforts to close the plants early. A new integrated resource plan submitted by Rocky Mountain Power reverses plans to greatly increase renewables and develop new nuclear. The changes are significant.

The plan being replaced called for 17 gigawatts of solar and wind power and more than eight gigawatts of battery storage over the next two decades. The updated plan reduces by more than 13 gigawatts the amount of renewable energy the company had planned to add by 2034. That includes cutting more than four gigawatts of solar power and another four gigawatts of battery storage. The coal plants being held open produce 2.5 gigawatts.

The Warren Buffet owned generator has benefitted greatly from newly enacted legislation in Utah designed to skew regulation in favor of coal. That legislation makes the coal plants the state’s “preferred” energy source. It provides for a self-insurance fund for Rocky Mountain. Under the bill, every Utah customer will pay a surcharge on their bill that will go to a Rocky Mountain fund that can be used to pay wildfire claims in the state. 

That is a direct reaction to PacifiCorp’s potential exposure in states like Oregon where it has significant wildfire-related risk exposure. Buffet has complained about this risk and regulation and now characterized his investment in generation to be “a costly mistake”. Recently, he even suggested that the electric generation, transmission and distribution utility may not actually be suited for investor ownership. Public power advocates have long agreed with those sentiments. It is a view which advocates would be wise to seize upon in their efforts to build the case for public power.

NUCLEAR LOAN

The timing around the holiday for a resurrection story could not be made up but just before Easter we were provided with one. The U.S. Department of Energy announced that it would loan $1.5 billion to the owners of the closed Palisades nuclear plant in MI. If the plant is successfully restarted, it would be the first nuclear plant to do so in the U.S. The Diablo Canyon nuclear plant in CA received federal assistance but that was to extend operations at a functioning plant.

The state had previously pledged $300 million toward the Palisades restart, contingent on the federal investment. It was all part of legislative actions which requires all state electricity to be from carbon-free sources by 2040. Nuclear was classified as “clean” but not a renewable but as a no-carbon resource it fits the goals of the legislation. This is just the start of the process.

The repowering plan must be approved by the Nuclear Regulatory Commission, which will require approval of multiple pending licensing requests for the project. The hope is to extend the life of Palisades through 2051 providing 800 megawatts to the electrical grid. The loan will serve as a bridge financing until operations activate long-term power purchase agreements are already in place with two rural electric cooperatives with customers in Michigan, Illinois, and Indiana.

ANOTHER ONE BITES THE DUST

Birmingham-Southern College, a private liberal arts school in Birmingham, Ala., is set to close at the end of May. The decision comes after it failed to secure a multimillion-dollar loan from the state. Alabama lawmakers last year approved a new loan program that could lend Birmingham-Southern as much as $30 million. The state treasurer twice denied the loan last year, citing concerns about the school’s ability to pay its debts.

The legislature sought to change the loan program this year to move the responsibility of approving loans from the state treasurer to the Alabama Commission on Higher Education and further specified the terms of the loan. That legislation could not make it through the Alabama house so the school decided to cease operations. It has a long history of financial weakness and mismanagement which has not helped its cause.

MANSION TAXES

The concept of a tax on the sale of homes above a certain price (usually a minimum of $1 million) is not new. Attempts to create one in NY state were unable to make it through the legislature. Earlier this year the voters in Chicago defeated a ballot item which would have created such a tax. These votes transpired in the wake of the establishment of a mansion tax in Los Angeles via a vote in November of 2022. We now have a year’s worth of data from Los Angeles to analyze to see if such a tax has the desired effect.

Measure ULA, levies a 4% charge on all property sales above $5 million and a 5.5% charge on sales above $10 million, with proceeds funding affordable housing and homelessness initiatives. It is more expansive than other proposals in that not just luxury home sales, but also multifamily developments and commercial properties, since the tax applies to all property sales above $5 million.

Initially, proponents of Measure ULA estimated the tax would raise some $900 million per year. Last March, a report from the City Administrative Office lowered that number to $672 million. According to the L.A. Housing Department, Measure ULA has raised roughly $215 million in its first year. In the first three months of Measure ULA, the tax raised $15 million, only $5 million per month. The trend of collections has more recently been positive.

But from July 2023 to February 2024, the tax raised roughly $200 million, or $25 million per month. Projections for the city’s fiscal year, which starts on July 1 and ends on June 30, would be around $300 million. This has not slowed efforts to overturn the tax. Opponents focus in on data showing that from April 2022 to March 2023, the year before Measure ULA hit, L.A. had 366 single-family home sales of $5 million or more. In the 12 months since, there were just 166 — a drop of roughly 68%. They cite much lower rates of sales slowdowns in neighboring cities which have not imposed a mansion tax.

In November, Californians will vote on a statewide ballot initiative called the “Taxpayer Protection Act.” If passed, the act would require special taxes to be approved by two-thirds of the vote instead of a simple majority, applying to all measures adopted after Jan. 1, 2022. Since Measure ULA was adopted in 2023 and only received 57% approval, it could require another vote or potentially be repealed.

RECREATIONAL CANNABIS AND THE SUNSHINE STATE

Medical marijuana was approved in 2016 to become legal in Florida. Since then, efforts have been ongoing to get recreational marijuana approved. They have been stymied by court decisions which kept earlier efforts off the ballot. Now, the Florida Supreme Court has approved a ballot initiative to legalize recreational use which will appear on the November ballot.

Amendment 3 will legalize the “non-medical personal use of marijuana products and marijuana accessories by an adult” 21 or older if approved by 60% or more of statewide voters. It would take effect six months after the election. Prior efforts in 2021 to advance such an initiative failed to pass muster with the Court. Observers note that the decision represents a clear reversal of positions on the Court as both decisions were issued under significant majorities. Medical marijuana got a 71% vote in 2016.

SMALL POTATOES

The Idaho Legislature is taking up the battle against ESG investment management that is regularly occurring in so-called “red states”. House Bill 669 would ban the largest banks and credit card companies from financial “discrimination” against any person or entity on the basis of “social credit scores” that consider their views on religion, climate targets or gun regulation. The bill would only apply to banks with more than $100 billion in assets and to payment processing companies that handle over $100 billion annually. The Idaho attorney general would have authority to investigate and enforce the law and to allow private lawsuits.

What is useful about this particular exercise is the fact that the sponsors of the legislation have been very open about the fact that they did not write the law. It was written for them by a group of conservative thinktanks. In this case it was written by a Christian nationalist organization. After all, we’re talking about Idaho.

Disclaimer:  The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column.  The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned.  Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice.  Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed.  Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.