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Thursday, August 13, 2015

It's time to pay the piper: New EPA regs will raise rates for rural electric cooperatives

From the Osage Valley Electric Cooperative Facebook page:

Now that the Environmental Protection Agency has released its final rules regulating greenhouse gas emissions from new, existing, modified and reconstructed power plants, electric cooperatives will begin the task of sorting through the 1,560 pages to gauge the impact of the plan on members. What’s clear is that EPA ignored the hundreds of thousands of comments sent to them by electric cooperative members in Missouri, all saying “don’t raise our rates.”

The rules are expected to hit Missouri’s electric cooperative members especially hard because 80 percent of the electricity used by them comes from coal, the generation fuel source singled out by the new regulations. And that is troubling to electric co‐op leaders because they serve some of the poorest counties in the state.

“There is a lot at stake with these final rules,” says Barry Hart, CEO of the Association of Missouri Electric Cooperatives. “Electric cooperatives are not‐for‐ profit and member owned. We are focused on the affordability and reliability of electricity because that is what our members have told us to do. We have a responsibility to ensure their voices are heard. That is why 315,000 members sent comments to EPA. It’s clear EPA ignored those comments. In fact, the final rules make it far more likely electric rates will dramatically increase.” Added Jim Jura, CEO of Associated Electric Cooperative, which supplies wholesale power to electric co‐ops in Missouri and parts of Iowa and Oklahoma: “The final rule is much worse for Missouri than the draft rule was. Coal generation has been a significant factor in providing our members with reliable electricity at low rates. Unfortunately, these regulations will significantly impact that.”

He added that the rules penalize electric cooperatives for taking early action to reduce emissions by investing in 600 megawatts of renewable energy from wind farms prior to 2013. And it doesn’t take into consideration the millions of dollars in energy efficiency measures already provided to members to reduce demand for electricity.

Under the proposed regulations released in 2014, Missouri had to reduce emissions of carbon dioxide from power plants by 21 percent. The new rules increased those levels to 37 percent. Missouri was one of 22 states that now have to meet more stringent reductions than were proposed.

The rules also are expected to cost jobs, especially in rural areas. National Rural Electric Cooperative Association (NRECA) CEO Jo Ann Emerson made the following statement about the rules: “Any increase in the cost of electricity most dramatically impacts those who can least afford it, and the fallout from the EPA’s rule will cascade across the nation for years to come.

“While we appreciate the efforts intended to help offset the financial burden of rising electricity prices and jobs lost due to prematurely shuttered power plants, the final rule still appears to reflect the fundamental flaws of the original proposal. It exceeds the EPA’s legal authority under the Clean Air Act, and it will raise electricity rates for our country’s most vulnerable populations while challenging the reliability of the grid.

“We will continue reviewing this extremely complex rule and have additional comments on behalf of America’s not‐for‐profit, consumer‐owned electric cooperatives in the coming days.”
NRECA recently commissioned a study that underscores the devastating relationship between higher electricity prices and job losses. The study, Affordable Electricity: Rural America’s Economic Lifeline, measures the impact of a 10‐ and 25‐ percent electricity price increase on jobs and gross domestic product (GDP) from 2020 to 2040.

Even a 10 percent increase in electricity prices results in 1.2 million jobs lost in
2021 across the country with nearly 500,000 of those lost jobs in rural communities. And 20 years later, the economy fails to fully recover.

For more information and an interactive map, visit http://www.nreca.coop/nreca-on-the-issues/environment/climate-change/.