by Bruce Graham
CEO of Indiana Statewide Association of RECs, Inc.Several significant Capitol Hill actions this year have garnered the attention of your electric cooperative.
Benefit costs will likely increase due to health care legislation, and the financial reform bill has a mixed verdict on the tools electric cooperative power providers and lenders use to manage risk. Still not done, the upcoming agriculture budget bill includes authorization for the Rural Utilities Service Electric Loan Program which is an important source of funding for cooperatives across the nation and actually makes money for the federal government.
While there are relatively few days left in the congressional calendar before the 2010 elections, we also may be affected by growing momentum in the Senate to cobble together an energy/efficiency/carbon bill for potential floor debate. Titles to watch could promote renewable and alternative energy sources with a goal to create “green jobs,” reduce fossil fuel consumption and address the Gulf oil spill.
Far reaching cap-and-trade proposals appear to face a high hurdle to get 60 votes, but Senate leaders are shopping a utility-only carbon limit. Unfortunately, such an approach unfairly picks on Indiana and other regions that built perfectly acceptable and allowable generation plants years ago. If we are going to address carbon, we shouldn’t target a single industry. It will raise your electric bill but do nothing of significance to address greenhouse gases in the world and climate change.
You have been reading about our concerns with carbon and/or cap-and-trade legislation for more than a year. In the last issue of
Electric Consumer, one of our readers asked a fair question – what proposal do we support?
We support legislative proposals that assure fair, affordable and reliable energy supplies in the future. We aren’t debating the science of climate change. There are plenty of groups weighing whether global warming is a real threat or not — and we encourage the public’s participation in those groups. Meanwhile, the issue has moved from climate science to political science.
Carbon is being regulated already by the Environmental Protection Agency. The EPA, using Clean Air Act authority granted by the courts, released rules for the transportation sector earlier this year. Regulations are expected in early 2011 to curb carbon emissions from stationary sources such as power plants.
Indiana’s electric cooperatives support renewable generation. In fact, the state’s two generation and transmission cooperatives — Wabash Valley Power Association and Hoosier Energy — are industry leaders in developing alternative energy. Sources from waste to wind already fuel green power initiatives for Indiana cooperatives. In addition, both power suppliers are charter members of the National Renewables Cooperative Organization. Its goal is to economically develop additional large scale alternative energy resources.
We do not support a renewable portfolio standard (RPS) that is unachievable and fails to give credit for efficiency and other greenhouse gas reductions. Many states have set lofty mandates which can result in higher costs when the market is circumvented and the incentive for innovation is removed. Plus, a recent study states that a 20 percent wind RPS by 2025 may require as much as 15,000 miles of new high-voltage transmission lines impacting 30 states in the eastern interconnection alone. Just a 5 percent wind RPS would require 10,000 miles of new transmission. Planning, siting and cost allocation issues for transmission infrastructure must be addressed, or achieving even a 5 percent wind RPS is unlikely to be met.
We support energy efficiency which has the best potential to help both utilities and consumers reduce their carbon impact. Efficiency provides relatively quick and affordable savings and may be one of the ways utilities can meet growth in demand until more transmission is built and the rules are clear for new generation.
We support proposals that provide some certainty for future generation, encourage alternative resources, and permit all generation options, including clean coal. However, we know that most consumers aren’t willing to pay more on their electric bill during the transition to new generation. Therefore, we can’t support proposals that dramatically raise rates.
We support the market’s current effort to transition to a carbon-lite economy. Ideas such as small scale modular nuclear reactors have promise as safe, clean, sustainable and cost-efficient options. Electric cars are on the way, and adoption of such technology can significantly reduce greenhouse gases from the transportation sector and make efficient use of available off-peak electric generation.
We can’t support carbon legislation that doesn’t include all sectors of the U.S. economy and makes an effort to include other countries. Indiana would bear an unequal burden. Furthermore, a carbon cap only on utilities will not achieve the targeted greenhouse gas reductions of 17 percent by 2020 and 83 percent by 2050 sought by climate bill proponents.
There are many legislative ideas out there. As the debate unfolds, Indiana’s electric co-operatives will use these principles as guides in determining whether legislation is fair, affordable and achievable.