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Powerful Living By Reed Karaim


Co-ops strive for balance of regulation and stewardship E


lectric cooperatives have been good environmental stewards since their beginnings–living up to the co-op principle of


Commitment to Community. After all, the fi rst electric co-ops were pri- marily in rural areas, serving members who largely made their living off the land. Those members knew the value of clean air, soil and water, and today’s electric co-ops continue to honor that heritage. In just the last decade, power supply cooperatives have invested more than $3.4 billion to reduce emis- sions and boost effi ciency. They are planning billions of dollars more in further upgrades. Cooperatives have always balanced investments in effi ciency and the envi- ronment with the need to control costs for members. The U.S. Environmental Protection Agency (EPA) is considering a series of new environmental stan- dards for coal power plants that potentially could have a devastating impact on the ability of electric cooperatives to provide their members with afford- able and reliable electricity. The federal agency is tightening a number of regulations that limit power plant emissions. While complying with all these standards could cost power generation cooperatives millions of dollars, “the most pressing issue and the one that could have the biggest impact on us is the proposed rule that will come out this June on carbon dioxide emissions for existing power plants,” says Kirk Johnson, National Rural Electric Cooperative Association (NRECA) senior vice president of government relations. Cooperatives are more dependent on coal-fi red generation than the rest of the industry. The reason lies in the tumultuous decade of the 1970s.


Electric co-ops and coal Oil embargoes, gas lines, soaring prices and shortfalls. For much of the


1970s, the nation was caught up in a complicated energy crisis that involved disruptions in Middle Eastern oil supplies and a conviction the world was running out of oil and natural gas. In 1977, President Jimmy Carter called on the United States to “shift to plentiful coal” to meet its growing energy needs. A year later, Congress went further, passing the Powerplant and Industrial Fuel Use Act to block the use of natural gas or oil to generate electricity. Electric cooperatives stepped up to meet the challenge, adding 15,600 MW of coal-based capacity during the natural gas ban. “That’s when we built 70 percent of our coal generation, during the period leading up to and during the Fuel Use Act,” says John Novak, NRECA executive director of environ- mental issues. “We built these units when there was a need to build them and when the policy of the federal government was that coal was a domestic fuel


Western Farmers Electric Cooperative’s coal-fi red plant in Hugo, Okla. Photo by Mark Daugherty/WFEC


source we should be using.” The Fuel Use Act was repealed in 1987,


but co-op efforts to help the nation meet its energy needs during a time of crisis have had long-term consequences. About 70 per- cent of the power generated by co-ops comes from coal plants, compared to about 37 percent for the industry overall, accord- ing to Novak. He notes these coal-fi red units still have many years of effective life and that genera- tion and transmission cooperatives have already invested signifi cantly to meet EPA regulations. Coupled with the other rules now being considered by the EPA, the rule on carbon dioxide emissions could be the “straw that breaks the camel’s back,” Novak says, making the continued operation of


some plants fi nancially unfeasible. If complying with the standard proves too costly, it may make more economic sense to shutter some units rather than spend millions to comply. Cooperatives believe environmental regulation needs to be balanced with


a realistic assessment of costs and benefi ts. The situation is particularly critical with regard to carbon dioxide emissions. “We’re asking the EPA to recognize the unique circumstances of not-for-profi t electric cooperatives and to work with us to come up with a fair solution that allows us to continue to provide affordable and reliable power to our members,” Novak says.


Pursuing a responsible energy future The EPA moved to regulate carbon dioxide after the Supreme Court ruled


in 2007 that the agency had authority under the Clean Air Act to regulate greenhouse gas emissions. But many analysts believe the Act was never in- tended to regulate carbon dioxide. It was enacted to address problems with smog and acid rain for which proven solutions existed. No commercially vi- able technology yet exists for removing carbon dioxide emissions from power plants.


Still, some environmental groups have been pressing the EPA for regula- tions that would mandate a 25 percent reduction in carbon emissions, which would require either closing plants or severely curtailing their operations. NRECA believes this approach exceeds the intent of the Clean Air Act. “Some groups are pushing the EPA to go beyond the black-and-white letter of the law and require emission reductions that can’t be achieved with today’s technology,” Johnson says. “We don’t think that’s allowed by the law, and it will cause costs to skyrocket.” The EPA’s effort to expand regulatory control of power plant emissions and other operations comes at a time when Congress has been unable to agree on legislation to address the same issues. Capitol Hill observers note the EPA took a more active role on greenhouse gases after Congress failed to pass a “cap and trade” program that would have curtailed the emissions. More recent bills have been introduced to limit EPA’s authority to regulate


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