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Rural America


‘All-of-the-Above’ Energy Strategy Needed Climate-change plan will harm rural America


In late June, President Obama announced a series of actions to combat climate change. For electric co-ops, the outline hammered one point that has us ready to do battle: reducing the volume of greenhouse gases—primarily carbon dioxide— emitted from fossil fuel-burning power plants, both new and exist- ing. To that end, the President has instructed the U.S. Environmental Protection Agency (EPA) to regulate carbon emissions under the federal Clean Air Act, a law last updated in 1990 that contains not a single line mentioning carbon dioxide. Under the sweeping mandate set forth, the White House risks shuttering the nation’s entire coal fleet—roughly 37 percent of generation capacity— and driving up electric bills for all consumers. NRECA and its member coopera- tives oppose using the Clean Air Act to regulate greenhouse gases and will engage the administra- tion at every turn to inject common sense back into policy discus- sions. Whether you agree with the President’s underlying concerns about global warming or not, the basic fact is that short of closing all coal-fired power plants there are no economically viable tools currently available to accomplish his goals. For several years, electric co-ops have warned the Obama admin- istration that employing the Clean Air Act to curb power plant carbon dioxide emissions is badly mis- guided. Without significant modifi- cations, co-ops feel the President’s proposal will jack up electric bills for those who can least afford it—our consumer-members.


Rural residents already spend a 2 • Kay Electric Cooperative


greater chunk of their income on energy than those in urban com- munities. One of our first missions as not-for-profit electric co-ops remains keeping rates affordable― an important consideration since household income in our service territories runs 11 percent lower than the national average and one person in six served by a co-op lives in poverty.


Forcing electric co-ops to shut down coal plants and switch to other fuels amounts to levying a punitive, regressive tax on rural America. History shows us this bad idea was tried once before, with bad results. In the late 1970s policymakers were concerned the U.S. would soon run out of natural gas, the main energy source for heating and cooking in many parts of our land. Congress’s solution to the issue was passing the ill-conceived Powerplant and Industrial Fuel Use Act of 1978, which prohibited burning natural gas to generate electricity. To meet growing demand for power, utilities were forced to choose either coal or nuclear power facilities. For electric co-ops the timing couldn’t have been worse. The measure kicked in just as gen- eration and transmission co-ops (G&Ts) were in the middle of a major power plant building cycle. In the end, many found themselves shifting generation strategies midstream―an expensive proposi- tion—and either partnering with investor-owned utilities in nuclear reactors or constructing state-of- the-art coal stations equipped with scrubbers and other pollution con- trol technologies. Thanks to the Fuel Use Act, power


costs soared, and with them, co- operative electric bills. Realizing its mistake, Congress repealed the act in 1987. Yet because of the legisla- tion, many electric cooperatives became deeply invested in coal. Today, coal accounts for about 74 percent of the power produced by G&Ts and 55 percent of all electric cooperative electricity require- ments.


Just like 35 years ago, the Presi- dent’s call for action has co-ops once again faced with shifting fuels—in this case, choosing natu- ral gas or renewables over coal. However, in regions without access to natural gas pipelines, chang- ing from coal to natural gas isn’t feasible. On the renewables front, co-ops have emerged as leaders, adding “clean and green” power systems where it makes economic sense—such as solar photovoltaic arrays in the Southwest and wind farms across the Great Plains and Midwest. But the sun doesn’t always shine (clouds) and the wind doesn’t always blow, especially dur- ing periods of peak demand on hot, humid summer weekday afternoons or cold winter mornings below minus 22 degrees Fahrenheit when power is needed most. Keeping the lights on 24 hours a day, seven days a week requires traditional baseload generation—namely coal, nuclear, and hydro—as well as a full mix of fuels.


The National Rural Electric Coop- erative Association, on behalf of America’s electric cooperatives, will continue to urge the President and his administration to work with co-ops on a real “all-of-the-above” energy strategy to keep electric bills affordable for rural Americans.


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