November 2013
Volume 60
Message from the National Rural Electric Cooperative Association 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 existing. To that end, the President has instructed the U.S. Environ- mental 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 cooperatives oppose using the
Clean Air Act to regulate greenhouse gases and will engage the administration at every turn to inject common sense back into policy discussions. 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 administration that employing the Clean Air Act to curb power plant carbon dioxide emissions is badly misguided. Without significant modifications, co-ops feel the President’s proposal will increase electric bills for those who can least afford it – our consumer-members.
Rural residents already spend a greater chunk of their income on energy than those in urban communities. 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.
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 generation 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 proposition –
Number 10 NRECA expresses concern with Federal Energy Policy
Want more information about coal regulations and other issues that may have big impact on energy costs? Visit
www.action.coop. The NRECA has set up this site as the hub of a grassroots advocacy network to inform co-op members and to provide a way for them to have their voices heard. At
www.action.coop., cooperative members may
LEARN MORE and TAKE ACTION!
and either partnering with investor-owned utilities in nuclear reactors or constructing state-of-the-art coal stations equipped with scrubbers and other pollution control technologies. Thanks to the Fuel Use Act, power costs soared, and with them, cooperative electric bills. Realizing its mistake, Congress repealed the act in 1987. Yet because of the legislation, 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 requirements.
Just like 35 years ago, the President’s call for action has co-ops once again faced with shifting fuels – in this case, choosing natural gas or renewables over coal. However, in regions without access to natural gas pipelines, changing 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 during periods of peak demand on hot, humid summer weekday afternoons or cold winter mornings below minus 22 degrees 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 Cooperative 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.
www.action.coop is resource site for information and action.
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