(ARLINGTON, VA) — National Rural Electric Cooperative Association (NRECA) Executive Director for Environmental Issues John Novak delivered the following statement today at the Environmental Protection Agency’s (EPA) public hearing regarding the Clean Power Plan for Existing Sources in Washington, DC.
“NRECA is the national service organization dedicated to representing the national interests of cooperative electric utilities and the consumers they serve. NRECA is the national service organization for more than 900 not-for-profit rural electric utilities that provide electric energy to over 42 million people in 47 states or 12 percent of electric customers. Kilowatt-hour sales by rural electric cooperatives account for approximately 11 percent of all electric energy sold in the United States. NRECA members generate approximately 50 percent of the electric energy they sell and purchase the remaining 50 percent from non-NRECA members. The vast majority of NRECA members are not-for profit, consumer-owned cooperatives. NRECA’s members also include 65 generation and transmission (G&T) cooperatives, which generate and transmit power to 668 of the 838 distribution cooperatives. The G&Ts are owned by the distribution cooperatives they serve. Remaining distribution cooperatives receive power directly from other generation sources within the electric utility sector. Both distribution and G&T cooperatives were formed to provide reliable electric service to their owner-members at the lowest reasonable cost.
“More than any rule currently on the books, the proposed Clean Power Plan for Existing Sources will allow the EPA to fundamentally alter the way that electricity is generated and the way that Americans use electricity. We don’t believe that is the EPA’s job. The ramifications from EPA’s proposal will be felt all the way from the generating plant to the toaster.
“The EPA’s energy plan goes too far, too fast – jeopardizing the wellbeing of millions of American families in the process. Simply put, the EPA’s proposal will trigger higher prices for many consumers and local businesses. America’s electric cooperatives serve more than 90 percent of the persistent poverty counties across the nation – the same communities that are put most at risk by the EPA.
“While EPA acknowledged America’s not-for- profit, member-owned Electric Cooperatives are different than most utilities, EPA’s proposal doesn’t provide a workable solution to address cooperatives’ unique circumstances. Should a state choose to reduce the burden on cooperatives, under EPA’s approach the state would need to increase the burden on other utility providers since the state still must meet the EPA’s goal. We are not asking for relief at the expense of others. The solution is for EPA to rework their assumptions and set reasonable and achievable state goals.
“Cooperatives have a proven record of both supporting the environment and following a true all-of-the-above energy policy that has provided affordable and reliable electricity for our consumer-members. Since 2009, electric cooperatives have doubled their renewable energy capacity, and have made long-term investments in wind, solar and hydro energy production. Unfortunately, EPA’s proposal slams the door on an all-of-the-above strategy, hand-picking winners and losers and driving coal-fired generation out of the mix. Ultimately, EPA’s proposal to reduce CO2 will have a minimal impact on global CO2 concentrations.
“The proposal will likely result in the premature closure of a number of power plants owned by electric cooperatives – placing even greater financial burdens on the cooperatives and the consumers who own them. Many of these plants were built when our national policy encouraged the use of coal as a domestic resource and co-ops have invested billions of dollars since then on environmental controls. These plants have a useful life that extends well beyond 2030. Cooperatives have played by the rules, but moving the goalposts again – like this proposal would – will result in stranded assets and premature shutdowns. For co-ops, this outcome is unreasonable, unjustifiable, and arbitrary.
“The way we see it, only heat rate efficiency improvements under the first of EPA’s building blocks is lawful under the Clean Air Act to set the standard. EPA then exceeds its legal authority with three of their four building blocks. EPA essentially adopts a standard that cannot be met inside the fence which forces states to adopt environmental dispatch, renewable portfolio standards and end-use energy efficiency standards to meet their emission targets.
“Under EPA’s proposal, in order to implement the fourth building block co-ops and consumer owners would have to spend billions on energy efficiency. Co-ops support energy efficiency and have programs ranging from energy audits to appliance rebates to on-bill financing programs. But the level of investment here may well go beyond the abilities of our consumer-owners and co-ops to afford given our demographics. As we’ve said before, many of our consumer-owners fall below the average income level and 93 percent of the persistent poverty counties in the US are served by electric cooperatives.
“Since the 1930s, co-ops have provided safe, affordable and reliable electricity to rural America, and with it, economic opportunities. EPA’s proposal directly threatens these gains and is the wrong approach. Already, tens of thousands of our consumers from both sides of the aisle have made their voices heard against this proposal. I’m proud to add my voice on behalf of 42 million Americans served by electric cooperatives. Please go back to the drawing board.”
ADDITIONAL COOPERATIVE STATISTICS / “FACTS AT A GLANCE”
- Serve 19 million businesses, homes, schools, churches, farms, irrigation systems, and other establishments in 2,500 of 3,141 counties in the United States
- Own assets worth $150 billion (distribution and G&T co-ops combined)
- Own and maintain 2.5 million miles or 42 percent of the nation’s electric distribution lines, covering 75 percent of the U.S. landmass
- Serve an average of 7.4 consumers per mile of line and collect an annual revenue of approximately $15,000 per mile of line, as compared to the industry average of 34 customers and annual revenue of between $75,500 per mile of line for investor-owned and (48 consumers) $113,000 per mile of line for publicly owned utilities or municipals
- Generate nearly 5 percent of the total electricity produced annually in the US
- Employ 70,000 people in the United States
- Retire over $600 million in capital credits annually to their members
- Pay $1.4 billion in taxes annually to state and local governments
- The typical distribution co-op has 13,000 consumers and 46 full time employees
- The typical G&T has approximately 122 employees
- 93 percent of co-op customers have average household incomes below the national average
- One in six live at or below the poverty line
- Mean household income is 12% lower than the nation as a whole
- Nearly 15 percent live in manufactured housing vs. 7 percent nationally
- 40 of the 47 states in which electric cooperatives operate, have statewide associations that provide a unified voice on behalf of members
The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.