co-op values
passing the Powerplant and Industrial Fuel Use Act to block the use of natural gas or oil to generate electricity.
Electric co-ops 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 environmental 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 source we should be using.”
Coal-fired plants like this one owned by Associated Electric Cooperative have helped the nation meet its energy needs, especially during times of crisis. Today, about 70 percent of the power generated by co-ops comes from fuel.
Balancing Act Co-ops must weigh the cost of new regulations
BY REED KARAIM NRECA COOPERATIVE AFFAIRS
principle of commitment to community. After all, the first electric co-ops were primarily in rural areas, serving members who largely made their living off the land.
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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 emissions and boost efficiency. They are planning billions of dollars more in further upgrades.
Co-ops have always balanced investments in efficiency and the environment with the need to control costs for members. The U.S. Environmental Protection Agency (EPA) is considering a series of new environmental standards for coal power plants that could have a devastating impact on the ability of electric co-ops to provide members with affordable and reliable electricity.
4 | march-april 2014 | Light Post
lectric cooperatives have been good environmental stewards since their beginnings – living up to the co-op
While complying with all these standards could cost 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, NRECA senior vice president of government relations.
Co-ops are more dependent on coal- fired 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,
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 percent of the power generated by co-ops comes from coal plants, compared to about 37 percent for the industry overall, according to Novak.
He notes these coal-fired units still have many years of effective life and that generation and transmission cooperatives have already invested significantly 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 financially 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 benefits. The situation is particularly critical with regard to carbon dioxide emissions. “We’re asking the EPA to recognize the unique circumstances of not-for-profit 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,” says Novak.
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
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