CoServ has a responsibility to keep you, our member-owners, informed about industry issues that affect your membership benefits (with low-cost energy being at the top of that list). As decisions hang in the balance on Capitol Hill and in the Texas legislature, affordable energy can be threatened by costs and unreasonable regulatory demands. As citizens of the largest energy-producing state in the nation, Texans must be on our toes. Please contact your federal/state legislators through Our Energy, Our Future – A Dialogue with America at www.ourenergy.coop.
If you are interested in being a part of CoServ’s Legislative Awareness initiative, please contact us at communications@coserv.com with your name, e-mail address, and service address. You will receive a monthly e-mail that provides legislative updates and information about how to participate locally. We may be contacting you personally to touch base with your state legislators in a variety of ways (i.e., attending forums, making phone calls, writing letters, commenting on political blogs, etc.). Please keep an eye out for your issue of Texas Co-op Power magazine each month for more information, and thank you for your participation and support.
October Update
On The Hill:
Cap and Trade Allowances: Windfalls or Wind Farms?
Co-Authored by Glenn English, CEO of NRECA, and Gregory E. Abel, President and CEO of MidAmerican Energy Holdings Company
The commentary No ‘Cash for Clunkers’ in Climate Bill (Sept. 15 issue of Energy Daily) creates a fictitious history of climate change and seriously harms good faith efforts within the industry to address the legitimate issues many utilities have raised with the Waxman-Markey bill.
Let’s be perfectly clear: the utilities calling for changes to Waxman-Markey support emissions reductions. The simple fact is that the switch to low- and zero-emission technologies won’t happen overnight, and it won’t be cheap. The problem is exacerbated by Waxman-Markey’s allowance allocation formula, which rewards companies with fewer CO2 emissions and leaves more coal-dependent utilities with significant allowance shortfalls. Our aim is to prevent a double cost to our customers: the cost of allowances (which will do nothing to reduce emissions), and the cost of the new infrastructure, including the renewable energy needed to actually reduce emissions.
We will not support the passage of legislation that causes our customers to spend their hard-earned dollars on unfair allowance allocation formulas that send millions of dollars to those who do not need them to address climate change. Moreover, the Edison Electric Institute made clear in letters to Senate leadership that they cannot support the bill without having a number of key changes made to it.
We and other utilities – both large and small – have raised questions about the bill’s allocation formula, which is split 50-50 between emissions and retail sales. Why? Because free allocations based on retail sales will create a financial windfall for companies with large nuclear or hydro resources. Those resources don’t emit greenhouse gases, so they don’t need allowances to comply with the law.
Moreover, giving away windfall allowances through an inequitable allocation formula reduces the available allowances for utilities that do need them to be in compliance with the law. This drives up customers’ costs and inappropriately transfers wealth from customers of primarily coal-based utilities to those of utilities that are less carbon-intensive. This situation was avoided under the successful Acid Rain Program, which did not distribute sulfur dioxide allowances to nuclear and hydro units – for the simple and obvious reason that these units did not emit sulfur dioxide, had no compliance obligations and, therefore, did not need allowances.
Let’s set the record straight: no nuclear plant was built to save the planet, and no coal plant was constructed to melt the ice caps. Utilities that built nuclear plants in the 1960s and 1970s did not do so to avoid greenhouse gas emissions, and there is no reason to provide them with a financial windfall. And as far as these self-declared “forward-looking power companies” are concerned, not one of the “Cash for Clunkers” authors has built a nuclear plant during their tenure with their utility.
Furthermore, so-called clunker coal plants in the Midwest were authorized by state utility commissions pursuant to laws existing at the time of approval. These plants were found to be in the best interests of our customers at that time, and they should not be penalized now for past prudent decisions that have resulted in low cost electricity. The authors assert that in the states where their customers live, a typical monthly electric bill averages $106, while in coal-burning parts of the country it is as low as $65. What’s the solution for their higher cost structure? Use the Waxman-Markey bill to moderate their customers’ bills. How? By raising our customers’ bills!
Let’s not rewrite history and pretend that the utility investments in low- and non-emitting power generation three and four decades ago anticipated climate change and should therefore be rewarded. A climate change bill should not pick winners and losers – and Waxman-Markey would do just that. It’s difficult to swallow the argument about industry compromise when one of the companies represented in the commentary will add about $750 million to its annual revenues for every $10 per metric ton increase in the price of carbon dioxide allowances under the bill.
Rather, let’s develop a fair allocation formula that avoids windfall profits, provides allowances to utilities that will be forced to take major actions to reduce their emissions, rewards early action once the program starts, avoids wealth transfers between utilities – and most importantly – actually ensures investment to reduce greenhouse gas emissions.
Gregory E. Abel is president and CEO of MidAmerican Energy Holdings Company, whose utilities serve more than 3 million retail electric and gas customers in 10 states. Glenn English is CEO of the National Rural Electric Cooperative Association. NRECA represents the nation’s consumer-owned electric cooperatives, which provide electric service to more than 42 million people in 47 states. The combined organizations serve greater than 14 percent of the United States electric market.
Climate Change Postcard Total Hits 600,000!
More than 600,000 Our Energy, Our Future™ climate change postcards have been collected, sorted and delivered to members of the United States Senate. And more continue to come in every day.
The postcards, which are signed by electric cooperative member-owners from across the country, urge senators to work with co-ops while crafting climate change legislation that is fair, affordable and achievable.
Last month, NRECA sponsored Climate Change Lobby Day on Capitol Hill, where nearly 100 representatives of electric cooperatives from 28 states brought boxes of the postcards to senators' offices. Visit www.ourenergy.coop and ask your legislators for an affordable climate change policy.
Smart Grid legislation
The Obama Administration is investing $3.4 billion through the American Recovery and Reinvestment Act, to help fund the largest single energy grid modernization in U.S. history. One-hundred private companies, utilities, manufacturers, cities and other partners received grant awards ranging from about $400,000 to $200 million to help build a nationwide smart energy grid that will cut costs for consumers, make the grid stronger and more reliable, and increase accessibility to clean, low-cost renewable energy sources for American homes and businesses. An analysis by the Electric Power Research Institute estimates that implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030, saving $20.4 billion for businesses and consumers across the country.
CoServ Electric was recently notified by the Department of Energy that its Smart Grid Investment Grant application has been one of only 100 selected for a $17.2 million grant negotiation process.
Senior Vice President Energy Services Curtis Trivitt stated, “The stimulus funds were offered to advance smart grid technology, and we are privileged to have the opportunity to help develop tools that allow CoServ members and other electric consumers nationwide to manage their energy use and save money. As a not-for-profit electric cooperative, exploring new technology that benefits our members was an opportunity we couldn’t pass up.”
To read more on our awarded grant with the DOE, visit our Newsroom.
In Austin:
Although there’s no new news on the Waxman-Markey (climate change) bill, Texans should still be focused on the upcoming general election for eleven good reasons. Eleven proposed amendments to the Texas Constitution will be submitted for voter approval at the general election on Tuesday, Nov. 3.
The most basic way to have power over your future is to vote. But it’s not just the act of voting—it’s about casting an informed vote for you, your family, your community, and your state. For information on voting in the general election, visit the elections administration Web site at the county in which you are registered to vote, Here are a few for easy reference: Denton, Collin, and Tarrant.
In addition to casting your informed votes on Nov. 3, we encourage you to visit www.ourenergy.coop to send a strong message to your representatives on state and federal levels about the need to support legislation that protects the price of electricity for hardworking Americans.
We've started an archive, click on a the links below to review.
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
For more information about CoServ and industry news, visit our other Newsroom features:
News Releases– Read cooperative news specifically geared toward the media.
Media Contacts – If you’re a reporter searching for CoServ- or industry-related details, we're happy to help.
Multimedia Gallery – Access company and industry videos, as well as high-resolution photos of our board directors and executive team.