Industry News & Issues
Electric co-ops and climate change:
bridging the technology gap
As the Environmental Protection Agency (EPA) moves forward on regulating greenhouse gases, the nation’s need for electric power continues to grow. America’s electric cooperatives need to build baseload power plants now to ensure adequate capacity in the near future.
The government and the utility industry must work together to resolve hard issues: How do we reduce greenhouse gases? At what cost? In what time frame? Using what technologies? And who will pay?
Where we stand:
- NRECA believes that federal and state climate policy should be realistic – the technology to capture and store carbon dioxide emitted by power plants is still under development – and should include substantial investment in research and development.
- Congress should move quickly to develop a plan that allows for better planning and more flexibility than the process of regulation mandated by the Clean Air Act.
- Climate change is a global issue: American policy must encourage equal international efforts by all major emitting nations.
Electric Industry Issues
Electric cooperatives are significantly different in ownership structure and purpose than other electric utilities. Electric cooperatives are private, not-for-profit, consumer-owned businesses. Cooperatives have proven to be a viable and even preferred business alternative in which consumers have the ability to provide electricity and other services for themselves.
The electric cooperatives’ perspective on the electric utility industry stems from their unique characteristics of consumer ownership and local democratic control. Electric cooperatives want to ensure that American families and small businesses nationwide benefit from any legislative or regulatory changes within the electric utility industry.
Although the growing power of big companies is an increasing threat to consumers, electric cooperatives provide a business model where profit is not the driving force and consumers have a voice.
Electric co-ops advocate common sense public policies on air quality, water and land resources that balance environmental stewardship with our need for energy to power the nation’s economy. Long range, consistent and common-sense environmental policies can ensure a clean environment without imposing severe economic penalties on electric cooperative consumers.
The nation has made significant progress in reducing air and water pollution. Across the country, cooperatives have invested in new technologies and improved waste management technology to improve air and water quality — in some instances going beyond the requirements of state and federal law.
NRECA participated in the development of the Wetlands Mitigation Action Plan, designed to preserve and increase the number of wetlands in the United States. As stakeholders in their local communities and as utilities that serve some of the most beautiful regions of the country — cooperatives are committed to preserving natural resources and minimizing their impact on the environment while meeting their obligation to their consumer members.
Where we stand:
- Cooperatives support sensible multi-emission legislation that can reduce power plant emissions more quickly and economically than continued regulation under current law. NRECA believes Congress should enact legislation that will address these objectives while balancing America’s energy, environmental and economic needs.
- Electric cooperatives believe that additional clean water requirements can meet environmental goals to enhance water quality through scientifically sound, cost-effective methods, while allowing utilities as much flexibility as possible.
- NRECA supports flexibility in the use of different types of mitigation, the use of preservation alone and the use of vegetated buffers for stream or wetlands impacts.
- NRECA and its members favor waste requirements that minimize economic impacts on the electric consumer, allow utilities as much flexibility as possible, recognize the need to provide economic and reliable electric power, and consider the regulatory effects on emerging competitive electricity markets.
Fuels & Other Resources
Demand for electricity in cooperative service territories is growing at twice the rate of demand in other sectors of the industry. Results of 2010 survey of generation and transmission cooperatives showed that co-ops will need an additional 12,600 MW over the next ten years.
Electric cooperatives use a wide range of fuels to generate electric power. This diversity helps maintain a reliable and affordable electric supply for member-consumers by ensuring that regionally plentiful resources can be utilized, reducing costs and keeping rates low.
While coal is a significant source of power for electric cooperatives, co-ops also support the development of and currently utilize many generation resources, including wind, solar, biomass, hydro, nuclear and natural gas.
Many cooperatives are investing in massive energy efficiency – sometimes called “the fifth fuel” – to curb demand and avoid the need to build expensive new generation.
In the development of national energy policy, Congress should provide appropriate funding and equitable incentives for research and development for all clean technologies and both not-for-profit and for-profit segments of the utility industry.
Where we stand:
- NRECA believes that an “all-of-the-above” approach to ensuring electric cooperatives have the resources they need to meet future electricity demand.
- Advanced nuclear, carbon capture and storage technologies and renewable resources require federal tax incentives and financial support in order to encourage their development and bring down their costs to consumers compared to conventional resources. Such incentives must be provided on an equitable basis to not-for-profit electric cooperatives, just as they are provided to for-profit utilities.
Coal is a vital natural resource and coal fired electricity generation is the core of the U.S. economy. More than 90 percent of the coal consumed in the United States is used to generate electricity. It fuels slightly less than half the nation’s generation and will continue as the largest single source of electricity supply through 2030 and beyond.
Clean coal technologies, including plants that reduce emissions through carbon capture and sequestration or employ efficient designs such as Integrated Gasification Combined Cycle and ultra-supercritical units, can provide environmentally compatible electricity generation to meet the rise in electricity demand anticipated over the next 25 years.
As consumer-owned, not-for-profit utilities accountable to their members, cooperatives have traditionally promoted energy efficiency as a means to keep members’ bills low. Now, many cooperatives see maximizing the efficiency of their members and their own operations as a key part of a broader strategy to meeting the challenges of growing electricity demand and rising costs.
Electric cooperatives believe energy efficiency, conservation and demand response can help lower consumers’ energy costs, shift peak demand, bridge the gap in the power generation building cycle, meet power supply goals — and maintain positive consumer relationships.
- 96 percent of electric cooperatives nationwide operate an efficiency program
- 70 percent of co-ops offer financial incentives to promote greater efficiency
- 73 percent of co-ops plan on significantly expanding existing efficiency programs in the next two years
Sources: NRECA Market Research Services; NRECA Strategic Analysis Unit
In 2009 Touchstone Energy® Cooperatives, the branding program for electric co-ops, launched the only utility-driven national efficiency campaign, “Together We Save,” with hundreds of TV spots, scripts, print ads, web banners and other materials to promote efficiency. The centerpiece of the campaign, TogetherWeSave.com, offers an interactive energy audit feature, as well as a library of energy-saving how-to videos.
Where we stand:
- Electric cooperatives strongly support federal energy efficiency incentives to promote energy efficiency, such as consumer tax credits, and increased federal investments in advanced efficiency technologies.
- NRECA is working with Congress and the Rural Utilities Service to develop a national loan program that would provide electric cooperative consumers with low-cost financing for energy efficiency improvements to homes and businesses. These loans would be paid back through energy savings on the electric bill.
- NRECA believes that any plan to address carbon emissions should include provisions to increase and promote efficiency and conservation.
- As a member of the National Action Plan for Energy Efficiency and its off-shoot, the State Energy Efficiency Action Network, NRECA works is helping to create a sustainable, aggressive national commitment to energy efficiency.
Natural gas is an important part of the cooperatives’ fuel portfolio, accounting for approximately 7 percent of the electricity cooperatives generate and purchase for consumers. Natural gas is a clean, reliable and efficient fuel for electric generation.
Natural gas is obtained through drilling, often in the same locations, both onshore and offshore, as oil production. The raw gas product is chemically processed to remove impurities and then transported across the nation via an elaborate network of interstate pipelines. Cooperatives purchase the fuel from local natural gas distribution companies, directly from gas producers or through gas marketers.
Domestic production accounts for most of the natural gas our nation uses today. While domestic supplies had been dwindling while demand grew, new technology in the form of economical extraction of natural gas from shale and oil sands has produced a surplus of natural gas. Indications are that this is a vast potential for future gas supplies, however, the environmental aspects of developed are being reviewed.