The push to rapidly replace always-available energy sources could spark rolling blackouts across America, the leader of a Midwest generation and transmission cooperative warned a Senate panel Thursday.

“Lawmakers must support policies that include all energy sources to maintain reliability and affordability. Rolling blackouts cannot become the new normal,” David Tudor, CEO of Springfield, Missouri-based Associated Electric Cooperative Inc., told the Senate Energy and Natural Resources Committee at a hearing on electric system reliability.

“It is critical that policymakers recognize the need for adequate time, technology development and new transmission infrastructure before taking our nation down an energy path that prioritizes speed over successfully keeping the lights on.”

Tudor cited the North American Electric Reliability Corp.’s recent Summer Reliability Assessment, which warned that two-thirds of the U.S. could face energy shortfalls during periods of extreme heat this summer.

“Importantly, the 2023 NERC summer reliability assessment is just the latest in a series of alarming reminders about the new electric reliability challenges facing the nation,” Tudor said.

“Last month, Federal Energy Regulatory Commissioner Mark Christie warned this committee of threats to reliable electricity, stating ‘I think the United States is heading for a very catastrophic situation in terms of reliability.’”

Associated Electric Cooperative, which serves 935,000 meters across rural Missouri, northeast Oklahoma and southeast Iowa, was able to keep the lights on during severe winter storms the past two years that knocked out power to millions of Americans and led to the deaths of more than 700 people in Texas during Winter Storm Uri in February 2021.

“Associated relies on a balanced generation mix, with proven and reliable coal and natural gas generating plants as a valuable foundation for reliability and dispatched its units to full capacity in advance of the cold temperatures,” Tudor said, describing the co-op’s response to Winter Storm Uri.

“Despite significant outside pressure in recent years to move to other options, these fossil-fuel generating stations were the major factor in keeping the lights on for the 2.1 million people we serve. Hydropower allocated by the Southwestern Power Administration was a reliable energy source. Wind generation in Associated’s mix played a minor role.”

Last December, nine states experienced rolling blackouts as the demand for electricity exceeded supply during Winter Storm Elliott.

“Again, coal and natural gas generation carried the day, preserving reliability for Associated’s members when they needed power the most,” Tudor said.

He applauded the inclusion of some permitting reform provisions in the debt limit deal reached by President Joe Biden and House Speaker Kevin McCarthy, R-Calif. The House approved the deal Wednesday and the Senate is expected to vote on it soon.

NRECA has made permitting reform a top priority, as the lengthy and costly process for obtaining a federal environmental permit can derail crucial projects to improve service to co-op consumer-members.

“These reforms, including firm time limits for environmental reviews, greater applicant involvement in the process and more efficient reviews for recurring small projects we already know have minimal environmental impacts, will allow co-ops to build new generation and transmission infrastructure in a timely and cost-effective way,” Tudor said.

Erin Kelly is a staff writer for NRECA.

NRECA has joined with electrical unions, builders and utility groups in asking President Joe Biden to prioritize domestic steel production to help meet an unprecedented demand for electrification and grid modernization and resilience initiatives.

“We write to urge your administration to make it clear that electrical steel is critical to the national and economic security of the United States and to prioritize actions that will create a sustainable supply,” NRECA and eight other national organizations said in a May 22 letter to the president and copied to the secretaries of treasury, energy, commerce and labor.

“The limited availability of domestically manufactured electrical steel poses challenges to the widespread adoption of electric vehicles, delays timelines for utilities to restore power following natural disasters and is a contributing factor to an insufficient inventory of distribution transformers to meet the demand for new home and commercial construction,” the letter said.

The Department of Energy last year documented only one U.S. supplier of grain oriented electrical steel, and that “severely limits electrical manufacturers’ ability to source domestically and meet certain domestic content thresholds” set by the administration, the groups said. GOES and non-grain oriented electrical steel are essential components to electric motors, transformers, electric vehicle chargers, generators and other critical electrical equipment.

“Shortages of domestic electrical steel are contributing to significant and persistent supply chain challenges across our industries,” the groups told the president. “The federal government can guarantee purchase of GOES and NOES up to a defined amount, as needed by critical electrical industries, to serve a more electrified economy as well as incentivize expanded manufacturing capacity.”

The groups suggested Biden convene an Electrical Steel Summit with stakeholders, including electric utilities, electrical manufacturers, automakers, steel manufacturers, labor unions and homebuilders, to focus on the challenges to U.S. production and the supply chain crisis that threatens the economy and the administration’s electrification and decarbonization goals.

The White House also should recognize domestic electrical steel production as vital to its objectives in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act and prioritize the “critical importance of electrical steel and growing domestic manufacturing jobs by working with Congress to put requisite financial resources toward shoring up domestic supply,” the organizations said.

“We urge your administration to make developing a sustainable supply of electrical steel in this country a top priority now and going forward.”

The Alliance for Automotive Innovation, American Public Power Association, Edison Electric Institute, GridWise Alliance, International Brotherhood of Electrical Workers, Leading Builders of America, National Association of Home Builders and National Electrical Manufacturers Association joined NRECA in signing the letter to Biden.

Earlier this year, NRECA called on DOE to address the urgency of GOES production for domestic distribution transformers rather than pursue efficiency standards supporting amorphous steel, a less durable material that is largely sourced overseas and could create reliability issues.

Cathy Cash is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today issued the following statement after the North American Electric Reliability Corporation’s (NERC) summer 2023 reliability assessment.

“This report is an especially dire warning that America’s ability to keep the lights on has been jeopardized,” Matheson said. “That’s unacceptable. The decisions we make today determine whether utilities across the nation have the resources to power the American economy tomorrow. Federal policies must recognize the compromised reliability reality facing the nation before it’s too late.

“American families and businesses expect the lights to stay on at a cost they can afford. But that’s no longer a guarantee. Nine states saw rolling blackouts last December as the demand for electricity exceeded available supply. And proposals like last week’s EPA power plant rule will greatly compound the problem. Absent a major shift in state and federal energy policy, this is the reality we will face for years to come. It’s vital that policymakers work to prioritize reliability in every energy policy discussion.”

Five issues are currently impacting the reliable delivery of electricity across the nation. They include:

• Increasing demand for electricity as other sectors of the economy are electrified.
• Decreasing electricity supply due to the disorderly retirement and insufficient replacement of existing generation.
• Permitting delays that prevent new electric infrastructure from being built and connected to the grid.
• Supply chain challenges.
• Problems with natural gas availability.

The 2023 NERC summer reliability assessment is just the latest in a series of alarming reminders about the new electric reliability challenges facing the nation:

• Federal Energy Regulatory Commission: Earlier this month, several FERC Commissioners warned the Senate of threats to reliable electricity. “I think the United States is heading for a very catastrophic situation in terms of reliability,” Commissioner Mark Christie said.

• PJM Interconnection: In March, PJM CEO Manu Asthana said that the regional transmission organization needed to slow the pace of generation retirements to avoid reliability problems by the end of the decade. “I think the math is pretty straightforward,” Asthana said.
  
  The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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NRECA CEO Jim Matheson said new regulations proposed by the Environmental Protection Agency (EPA) to eliminate greenhouse gas emissions from the power sector will place reliable and affordable electricity at risk and threaten America’s energy security.

“This proposal will further strain America’s electric grid and undermine decades of work to reliably keep the lights on across the nation,” Matheson said. “And it is just the latest instance of EPA failing to prioritize reliable electricity as a fundamental expectation of American consumers. We’re concerned the proposal could disrupt domestic energy security, force critical, always-available power plants into early retirement and make new natural gas plants exceedingly difficult to permit, site and build.

“Nine states experienced rolling blackouts last December as the demand for electricity exceeded the available supply. Those situations will become even more frequent if EPA continues to craft rules without any apparent consideration of impacts on electric grid reliability.”

EPA on May 11 released its long-anticipated draft rules aiming to cut carbon dioxide emissions by up to 617 million metric tons by 2042 at both new and existing coal and natural gas power plants.

Depending on the use of the unit, whether baseload or intermediate, the agency said power plants must adhere to performance standards following “best system of emission reduction” (BSER) requirements identified as: co-firing with natural gas, using clean hydrogen in place of natural gas and installing carbon capture and storage (CCS). For existing units, the states have some leeway in determining individual unit performance standards based on certain factors.

Existing coal-fired units planning to operate after 2039 will be required to install CCS with 90% effectiveness by 2030, according to the proposal. The BSER for coal units retiring before 2040 will depend on their shutdown date.

Existing natural gas plants of at least 300 megawatts and a capacity factor above 50% are expected to install 90% effective CCS by 2035 or co-fire with 30% low-carbon hydrogen beginning in 2032 and almost entirely hydrogen by 2038.

New natural gas plants are categorized based on how often they run. Those plants providing baseload power will have to meet the same CCS or hydrogen standards as large existing natural gas plants. Plants that are used intermittently will have to co-fire with 30% low-carbon hydrogen by 2032, while peaking units must meet low-emitting fuels requirements.

Matheson said EPA’s proposal fails to acknowledge the five top issues affecting the reliable delivery of electricity in the U.S.:

• Increasing demand for electricity as more sectors of the economy are electrified.
• Decreasing electricity supply due to the disorderly retirement and insufficient replacement of existing generation.
• Permitting delays that prevent new generation and transmission electric infrastructure from being built.
• Supply chain challenges.
• Challenges with natural gas availability.

“American families and businesses rightfully expect the lights to stay on at a price they can afford,” Matheson said. “EPA needs to recognize the impact this proposal will have on the future of reliable energy before it’s too late.”

NRECA will participate in the EPA’s public comments phase of the proposed rule, which will open 60 days after its publication in the Federal Register. EPA will also hold a virtual public hearing at a date to be determined.

Cathy Cash is a staff writer for NRECA.

Congress must modernize the federal permitting process to allow electric cooperatives to build new transmission and generation capacity more quickly and cost-effectively to meet growing demand for electricity, NRECA CEO Jim Matheson said in a letter to Senate leaders.

The Senate is working on crafting legislation to address permitting reform, and Matheson’s letter is the latest effort by NRECA to push for improvements that will benefit co-ops and their consumer-members.

“On behalf of America’s Electric Cooperatives, thank you for your efforts to streamline the federal infrastructure permitting process,” Matheson wrote in a May 8 letter to Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky.

“As we strive to meet our consumer-members’ expectations in the coming years, while maintaining reliable and affordable electric service, electric cooperatives will need to build significant amounts of new electric transmission and generation capacity of all types.”

Many of those projects will require permits and environmental reviews from federal, state and local governments, he said. Major projects will need to complete an environmental impact statement under the requirements of the National Environmental Policy Act.

“Unfortunately, as just one indicator of the headwinds we currently face, it takes an average of 4.5 years to complete an EIS and issue a permitting decision,” Matheson said. “One quarter of EISs take more than 6 years.”

He urged senators to consider five key principles as they conduct hearings and draft legislation to improve the permitting process:

• Time limits of no more than two years for environmental reviews. “That should be enough time to conduct a rigorous review while providing project certainty.”

• Greater applicant involvement in the process. Member-owned co-ops “know the specific details of their projects and the unique needs and challenges facing their communities.”

• More efficient reviews for recurring small projects—such as trimming trees to prevent power outages and wildfires—that are known to have minimal environmental impacts. “Electric co-ops should not have to navigate a lengthy, bureaucratic process for actions where both co-ops and the agency already know the benefits are high and the impacts are low.”

• Limit lengthy, costly litigation that can delay projects indefinitely. “Litigation can result in excessive paperwork and unnecessary delays—holding up projects that communities badly need.”

• Ensure that transmission permitting and siting improvements reflect co-op and community needs. “The electric grid needs more electric grid transmission capacity to meet expected growth in the coming decades.”

Matheson said policies to spur additional capacity must not expand the Federal Energy Regulatory Commission’s authority over electric co-ops. He added that those policies must allocate the costs only to those who receive tangible and quantifiable benefits and “must ultimately serve the national interest of maintaining the reliability and affordability of the electric grid.”

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today issued the following statement in response to EPA’s latest proposed rule to regulate power plant emissions.

“This proposal will further strain America’s electric grid and undermine decades of work to reliably keep the lights on across the nation,” Matheson said. “And it is just the latest instance of EPA failing to prioritize reliable electricity as a fundamental expectation of American consumers. We’re concerned the proposal could disrupt domestic energy security, force critical always available power plants into early retirement, and make new natural gas plants exceedingly difficult to permit, site, and build.

“Nine states experienced rolling blackouts last December as the demand for electricity exceeded the available supply. Those situations will become even more frequent if EPA continues to craft rules without any apparent consideration of impacts on electric grid reliability. American families and businesses rightfully expect the lights to stay on at a price they can afford. EPA needs to recognize the impact this proposal will have on the future of reliable energy before it’s too late.”  

Five issues are currently impacting the reliable delivery of electricity across the nation. They include:

• Increasing demand for electricity as other sectors of the economy are electrified.
• Decreasing electricity supply due to the disorderly retirement and insufficient replacement of existing generation.
• Permitting delays that prevent new electric infrastructure from being built and connected to the grid.
• Supply chain challenges.
• Problems with natural gas availability.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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The nation is facing unprecedented challenges to the reliability of the electric power system, members of the Federal Energy Regulatory Commission warned at a recent Senate hearing.

Commissioner Mark Christie, echoing concerns expressed to Congress by NRECA, said the transition to cleaner energy is happening too fast and could have disastrous consequences. NRECA has been repeatedly pushing that same message to lawmakers and federal agencies for more than a year.

“I think the United States is heading for a very catastrophic situation in terms of reliability,” Christie told members of the Senate Energy and Natural Resources Committee at a May 4 oversight hearing focused on FERC.

“The core of the problem is actually very simple. We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and is threatening our ability to keep the lights on.”

In March 2022, NRECA CEO Jim Matheson warned the Senate Environment and Public Works Committee of the risks of energy shortfalls during extreme weather if too much baseload generation is retired prematurely.

“Such policies would have significant impacts on the reliability and security of the electric grid and could have an undue economic impact on co-op consumer-members, particularly as additional costs must be incurred for replacement generation,” Matheson said.

Christie said the problem is not the addition of wind, solar and other renewable resources to the energy mix.

“The problem is the subtraction of dispatchable resources such as coal and gas,” he said, underscoring NRECA’s message to policymakers.

All four of the commissioners who testified before the Senate committee agreed that coal is still necessary to maintain reliability.

“Do any of you believe that it’s possible to eliminate coal today or in the near future and still be able to maintain a somewhat reliable system?” asked Chairman Joe Manchin, D-W.Va.

“I believe in an all-of-the-above approach,” replied FERC Chairman Willie Phillips, who was appointed to lead the commission in January by President Joe Biden. “Whatever resources are needed to keep our grid reliable, we have to make sure they are available.”

Commissioner James Danly said, “as things stand, coal is required.”

“It makes up just under a quarter of all the installed capacity in America and it would be impossible, given the locations and the realities of the electricity system, to replace it,” Danly said.

Phillips said the grid is also being threatened by “foreign and domestic actors” who are “testing our cyber defenses every day.”

“Physical threats to the grid are on the rise,” he said. “And extreme weather of all kinds is threatening the power to our customers.”

Phillips emphasized that “reliability is, and must be always, job No. 1.”

Since the beginning of the year, he said, the commission has taken several actions to strengthen reliability:

• Finalizing a rule to require the North American Electric Reliability Corp. to develop enhanced cybersecurity standards for internal network security protocols.
• Directing additional enhancements to a series of winter preparedness measures filed by NERC that are designed to prevent a repeat of the massive power outages and grid failures that took place during Winter Storm Uri in Texas two years ago.
• Approving a new reliability standard to further protect the electric system supply chain from hostile actors.
• Issuing a final rule in April to create a system of incentives to reward certain cybersecurity investments.

Erin Kelly is a staff writer for NRECA.

Douglas Electric Cooperative in Oregon has been awarded a $9.1 million grant by the U.S. Forest Service to remove trees at risk of falling on power lines and sparking wildfires that threaten homes and businesses.

The number of dead and damaged trees that need to be removed has skyrocketed in recent years after severe storms in Oregon and drought throughout the West, said General Manager Keith Brooks.

“It’s a tinderbox filled with 200-foot trees lined up next to our right of way,” he said. “Just one wrong tree coming down and hitting our lines could spark a wildfire fueled by all those weakened trees.”

The funds will enable the Roseburg-based co-op to double its right-of-way crews from four to eight and complete its vegetation management cycle in three to four years instead of every five to six years, Brooks said. The co-op serves more than 10,000 members in a 2,300-square-mile territory of mountains and forest land.

The grant also will allow Douglas EC to remove dangerous trees from beyond its own rights of way. That includes private land owned by co-op members and federal land managed by the Forest Service and the Bureau of Land Management.

“The trees beyond our right of way are becoming more and more of a problem,” Brooks said. “For every 100 tree-related outages we’ve had, we saw that 95% percent were outside of our traditional right of way. We keep our right of way maintained well, but we’ve had to expand our focus.”

Without the federal grant, the co-op would have had to raise rates for members to pay for its expanded wildfire mitigation efforts, Brooks said.

“This grant has been a blessing for us because we were already stressing our tree budget,” he said. “This is a way to help tackle the problem without dramatic rate increases for our membership.”

The grants will complement the co-op’s already extensive fire management plan, which includes equipping each line crew with a 500-gallon firefighting wagon, new fire extinguishers and water cans to help suppress flames until firefighters arrive. The crews take this equipment with them everywhere during fire season, which is getting longer and longer because of climate change, Brooks said.

“It’s happening,” he said. “There’s absolute evidence that things are drier. There’s less rain falling from the sky and more trees competing for less resources, making them more susceptible to insects and disease. We’re trying to de-escalate the threat.”

The co-op’s territory was largely spared by the devastating wildfires that roared to their east, north and south in the fall of 2020, killing 11 people, destroying small towns and burning more than a million acres.

No wildfires started in Douglas Electric Cooperative’s territory that year, but there were a few that spread a short ways into its service area from other places, Brooks said. The co-op only had to shut down one line briefly, affecting about 100 members.

“We’re in a little bit of a bubble where we don’t get winds as high as they do in other areas,” he said. “But we have been surrounded by fire outside our territory. And our day will likely come. We’re doing what we can to stave that off.”

Erin Kelly is a staff writer for NRECA.

Electric cooperative supply chain concerns were a primary topic of discussion at a Senate Energy and Natural Resources Committee hearing last week on the Department of Energy’s 2024 budget. 

The hearing occurred on the heels of NRECA’s Legislative Conference, where over 2,000 co-op leaders advocated for the importance of electric reliability, including the significant impact of supply chain bottlenecks.  

During the hearing, a bipartisan group of four senators recognized electric co-op efforts to address supply chain shortfalls and pressed Energy Secretary Jennifer Granholm on how the agency plans to help. 

“Each of these senators noted they’d heard about this issue from rural electric cooperatives,” said NRECA CEO Jim Matheson. “This is a fantastic example of the power of the cooperative network.”

See what these senators had to say in the video below:

Electric cooperatives will soon have access to $9.7 billion in grants and loans to buy or build new clean energy systems, Rural Utilities Service Administrator Andy Berke told co-op leaders Monday at NRECA’s Legislative Conference.

Berke said the U.S. Department of Agriculture is poised to roll out the program in the coming days. It was approved last August when Congress passed the sweeping Inflation Reduction Act.

“This is huge,” Berke told 2,000-plus conference attendees. “We have to make sure that you can make the energy transition that is coming without breaking the bank.”

The voluntary program will provide funding for a wide range of projects, including renewable energy, carbon capture, battery energy storage systems, nuclear power and improvements to generation and transmission efficiency. Interested co-ops will be eligible to receive an award for up to 25% of their project costs, with a maximum of $970 million going to any one co-op.

“This is an enormous opportunity,” he said. “We don’t know when it is going to happen again. Please take this opportunity. It’s available because of your advocacy.”

Berke drew applause when he announced that RUS, beginning this week, is shrinking the size of environmental review paperwork that co-ops have to fill out when they apply for loans from a minimum of 70 pages down to just four pages.

He said he listened to concerns about the process from co-op leaders at NRECA’s PowerXchange in Nashville, Tennessee, in March and made the change based on their feedback. He said he hopes it will expedite co-op construction projects.

“We know that a project today is better—and more importantly cheaper—than a project tomorrow,” Berke said.

Sen. Boozman Honored With Distinguished Service Award

Also on Monday, Sen. John Boozman, R-Ark., received NRECA’s Distinguished Service Award, which honors members of Congress who make essential contributions to electric co-ops and the communities they serve.

“Sen. John Boozman, an electric cooperative member, has been a friend to the Electric Cooperatives of Arkansas throughout his years in public service,” said Buddy Hasten, president and CEO of the Electric Cooperatives of Arkansas. “Sen. Boozman’s dedication as an advocate for Arkansans clearly aligns with the mission of our state’s electric cooperatives.”

Boozman, the ranking member of the Senate Agriculture, Nutrition and Forestry Committee, said he is hopeful that Congress will be able to pass one of NRECA’s top legislative priorities this year: a new five-year Farm Bill that includes full funding for rural economic development and broadband programs. The current Farm Bill expires Oct. 1.

“Farm Bills aren’t about Democrats or Republicans,” he said. “They’re bipartisan. I think we’ve got a great chance of getting it done.”

DOE Official: ‘Reliability Is the Foundation’

Gene Rodrigues, assistant secretary of energy for electricity, said he shares NRECA’s goal of ensuring that the electric grid “remains reliable, resilient and affordable for all Americans.” The importance of grid reliability is the main message that co-op leaders are taking to Capitol Hill and federal agencies this week.

“We are all in agreement with every single one of you in this room that reliability is the foundation of everything we want to do,” he said.

Unfortunately, the American people and many of their elected officials “take it for granted” that the lights will always come on when they flip the switch, Rodrigues said.

“That’s a problem,” he said, urging co-op leaders to “advocate, educate and collaborate” to sound the alarm about the potential risks to reliability.

“If it’s taken for granted, then we won’t have the champions we need to keep electricity reliable and affordable over time. … Make sure they understand the absolute necessity of investing in a 21^st century power grid for the American people.”

Spanberger Lauds Co-op Role in Closing Digital Divide

“Rural communities feed and fuel the rest of Virginia and our nation,” Rep. Abigail Spanberger, D-Va., told conference participants. “Unfortunately, at times it seems like rural America can get left out of the conversations on infrastructure and economic development.”

She said that electric co-ops serve 40% of her constituents and are helping to bring essential broadband service to rural communities that for-profit internet providers ignore.

“I’m so grateful to your [NRECA] members for working to bring broadband,” Spanberger said.

The bipartisan infrastructure law’s $65 billion in broadband funding will help close the digital divide and “strengthen our rural economy for the next generation of Americans,” she said.

Freshman House Members Push for Bipartisan Solutions

Freshman Reps. Juan Ciscomani, R-Ariz., and Don Davis, D-N.C., were both elected in 2022 and represent electric cooperative members in rural communities. They told co-op leaders that they are frustrated by the fierce partisan divide in Congress and hope to work together as members of the bipartisan Problem Solvers Caucus.

“There’s too much extremism, and it comes from both sides—let’s be honest about it,” Davis said.

Ciscomani, who described his district’s voters as one-third Republican, one-third Democratic and one-third independent, said he has set up an advisory committee back home made up of local leaders with diverse political ideologies.

“There is an appetite in our country for people to work together to find solutions,” he said.

Erin Kelly is a staff writer for NRECA.

More Coverage From Legislative Conference:

What Electric Co-ops Need From Policymakers to Close the Digital Divide
NRECA CEO: Reliable Electricity Is Main Focus of Legislative Conference
Rep. Bob Latta: Rural Connectivity ‘Is Everybody’s Issue’

More than 2,000 electric cooperative leaders are gathering in Washington D.C., for NRECA’s Legislative Conference, and they will urge Congress and federal agencies to focus on maintaining reliable electricity for the American people, NRECA CEO Jim Matheson said at a media teleconference Thursday.

“Affordable and reliable electricity is an issue of growing concern among members of NRECA,” Matheson told reporters ahead of the April 16-19 conference.

“American families and businesses expect the lights to come on whenever they flip the switch, and we’re concerned that the reliability of the grid is at great risk.”

He pointed to rolling blackouts that took place in nine states last December as evidence of “a stressed grid.”

Electric co-op leaders will discuss five major issues that impact reliability with policymakers. They include:

• Growing demand for electricity as other sectors of the economy are electrified.
• Decreasing electricity supply due to the retirement and insufficient replacement of existing generation.
• Supply chain challenges.
• Permitting delays that prevent new electric infrastructure from being built.
• Problems with natural gas availability.

Recent reports by the North American Electric Reliability Corp. underscore the risks to electric reliability, Matheson said. NERC warned last year that the U.S. is experiencing a “disorderly retirement” of older electric generating plants without replacement power coming online fast enough to meet growing demand. NERC’s 2023 summer reliability risk assessment is due out soon.

“Demand is going up and supply is going down, and that’s not a good trend if you want to maintain system reliability,” Matheson said.

In addition to advocating for reliability issues, co-op leaders will push for robust funding for rural broadband and rural development in the new five-year Farm Bill that Congress is considering.

The bill is likely to include funding for the Department of Agriculture’s ReConnect Program, which provides loans and grants to electric co-ops and other groups to provide high-speed internet service to rural communities.

Erin Kelly is a staff writer for NRECA.

More Coverage From Legislative Conference:

Top Policymakers Address Electric Co-op Leaders at NRECA’s Legislative Conference
What Electric Co-ops Need From Policymakers to Close the Digital Divide
Rep. Bob Latta: Rural Connectivity ‘Is Everybody’s Issue’

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today applauded House passage of major energy legislation (H.R. 1), which includes critical permitting modernization provisions supported by electric cooperatives.

The bill includes the BUILDER Act (H.R. 2515) which would expedite environmental reviews under the National Environmental Policy Act (NEPA) and other federal processes.

“As threats to electric reliability mount and our nation increasingly relies on electricity to power more of the economy, it is critical that Congress streamline the process to permit, build and maintain the infrastructure that keeps the lights on across the country,” said Matheson. “Unless these obstacles are addressed, it will continue to be difficult to meet future energy needs while maintaining affordability and reliability.

“This legislation is a meaningful step forward as we work to maintain, improve and expand critical electric infrastructure.”

The BUILDER Act places targeted and reasonable limits on the environmental review of proposed major federal actions under NEPA. It establishes deadlines and other requirements to expedite the environmental review of such actions.

Co-ops must undergo NEPA reviews when they seek permits to build new energy projects and when they want to remove vegetation that is threatening power lines on federal land. They also are required to go through the NEPA process when receiving project funding and financing from the U.S. Department of Agriculture’s (USDA) Rural Utilities Service to expand, upgrade and modernize their systems.

Brent Ridge, CEO of Wisconsin-based Dairyland Power Cooperative, echoed Matheson’s strong support for the BUILDER Act, noting that the federal environmental review process takes too long, costs too much and makes it more difficult for co-ops to provide reliable, affordable power to their members.

“Dairyland strongly supports H.R. 1 and appreciates Congress’ effort to provide a pathway for more coordinated, consistent, and timely agency decision-making,” said Ridge. “It’s critical that we place reasonable parameters around the review process and limit unnecessary litigation. Simply put, NEPA modernization is necessary to advance future clean energy projects that will strengthen our economy and benefit the environment.”

Dairyland is a partner in the Cardinal-Hickory Creek transmission line that will deliver wind energy from the upper Great Plains to the Midwest in southern Wisconsin. The project was approved by federal agencies in winter 2020 but has been significantly delayed with costly litigation by environmental groups challenging the decision. It would deliver enough electricity from over 100 renewable energy projects to power millions of homes—but only if it can be built.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Electricity gets more essential to modern living every day, but electric cooperative executives are warning that without thoughtful policy decisions, future reliability challenges loom.

Demand for electricity is increasing for transportation, digital communications and other sectors of the economy while reliable baseload generation plants are being retired, NRECA CEO Jim Matheson said in a March 7 media teleconference in Nashville, Tennessee, as co-op leaders gathered for PowerXchange, NRECA’s annual meeting of members.

“We’re either replacing plants with less capacity, no capacity, or replacing them with renewables that are intermittent and not always available,” Matheson said.

Matheson, joined by representatives of distribution co-ops and generation and transmission co-ops, expressed broad concerns for consumers and businesses that rely on uninterrupted and affordable electricity.

“We are seeing capacity constraints across the board while we are in a rapid generation transition in our country,’’ said Chris Jones, CEO of Middle Tennessee Electric Membership Corp., a Murfreesboro-based distribution co-op that serves about 335,000 meters. “The meat and potatoes of our industry will remain affordability and reliability.”

Maintaining that reliability at costs consumers can afford is becoming increasingly challenging as the materials needed to meet production demands for essential components like transformers are diverted for electric vehicles and other new products. Co-ops are also among the utility interests urging federal regulators to consider near-term reliability before implementing standards that could exacerbate shortages of essential components.

“We’re shipping transformers out of stock faster than we can restock,” said Buddy Hasten, CEO of Arkansas Electric Cooperatives Inc. The Little Rock-based statewide cooperative association operates ERMCO, the nation’s leading supplier of transformers for electric cooperatives.

“We’re seeing a two-year lead time on orders for our most common transformers,” said Hasten, adding that before COVID-19-related disruptions, lead times of six to 13 months for large orders were common. “It can take two to three years to deliver large units” needed for substations and large industrial applications, he said.

Co-ops are industry leaders in developing renewable energy projects and research aimed at preserving existing generation resources while reducing their environmental impact. But there is growing concern that the early closure of existing generating assets could lead to shortages and disruptions rivaling those caused by extreme weather events.

“It has to be at a pace that makes sense,” said Suzanne Lane, CEO of Kansas Electric Power Cooperative, a G&T headquartered in Topeka. “Our members are very concerned about reliability.”

Co-ops leaders are also advocating for Congress to streamline the permitting process, as it currently can take a decade or longer under the National Environmental Policy Act process to obtain approvals to fully commission new generation or connect new sources to the transmission grid.

“Two years ought to be enough time to complete any review for siting,” said Matheson, adding that NRECA member co-ops are poised to take advantage of dozens of new federal programs designed to expand energy production or strengthen grid assets. One of those programs is a nearly $10 billion U.S. Department of Agriculture initiative to lower carbon emissions.

In addition to generation and transmission and supply chain issues, co-ops are also tackling cybersecurity and physical infrastructure threats aimed at portions of the grid under direct co-op control. That includes nearly 3 million miles of distribution lines and about 17,000 substations.

“Every utility in America is going through that right now,” Matheson said.

Derrill Holly is a staff writer for NRECA.

The federal environmental review process takes too long, costs too much and makes it more difficult for electric cooperatives to provide reliable, affordable power to their members, a Dairyland Power Cooperative leader told a House committee Tuesday.

“Electric cooperatives like Dairyland play a leading role in the ongoing transformation of the electric sector and often need to obtain permits or other authorizations from federal agencies to construct and maintain electric generation, transmission and distribution infrastructure,” John Carr, vice president of strategic growth at the Wisconsin-based generation and transmission co-op, told members of the House Natural Resources Committee.

“Dairyland and other electric co-ops support the appropriate consideration of potential environmental impacts of energy projects during the permitting process, but the existing process impedes our ability to deploy clean energy to meet the current and future needs of our consumers and communities. We simply must reform the process to enable the transition that is already underway and to ensure it can be done reliably and affordably for our customers.”

Co-ops must undergo National Environment Policy Act reviews when they seek permits to build new energy projects and when they want to remove vegetation that is threatening power lines on federal land. They also are required to go through the permitting process when they apply for Rural Utilities Service loans to expand, upgrade and modernize their systems.

“As Dairyland Power has experienced firsthand, lengthy NEPA reviews and litigation delay the completion of critical infrastructure projects, require significantly more time and resources, and have a direct negative impact on communities served by these projects,” Carr said.

The co-op’s efforts to build a transmission line that would cross a federal wildlife refuge to deliver wind energy from the upper Great Plains to southern Wisconsin has been delayed for more than three years because of litigation. It was approved by federal agencies in January 2020 but has been tied up in court by environmental groups challenging the decision.

“There are currently over 100 renewable generation projects depending upon the construction of the Cardinal-Hickory Creek transmission line,” Carr said. “These projects will generate enough electricity to power millions of homes with clean energy. But only if the line can be completed.”

He recommended four priorities for lawmakers as they look to reform permitting processes:

• Establish firm parameters for environmental reviews, including how long the reviews should take.
• Promote greater involvement by co-ops and other permit applicants in the process while still giving federal agencies the final word.
• Ensure faster, more efficient reviews for projects that clearly have minimal environmental impact.
• Limit unnecessary litigation of NEPA reviews. Put time limits on how long someone can wait before filing a lawsuit against a federal agency after the agency grants a permit.

Carr called on lawmakers to support the BUILDER Act, which contains many of those recommendations. The bill’s chief sponsor is Rep. Garret Graves, R-La.

“Meeting current and future energy needs is a major challenge,” he said. “Rising to meet this challenge will require collaboration, creativity and flexibility. Dairyland and our electric co-op brethren are ready to work with all of you and your colleagues in Congress and your federal agency partners to meet these needs.”

Erin Kelly is a staff writer for NRECA.

Electric cooperative leaders urged Congress to pass federal permitting reform legislation, warning that delays in approving projects to modernize electric power systems could threaten grid reliability.

“We’re looking at a significant electrification of the U.S. economy in transportation and other sectors,” NRECA CEO Jim Matheson told reporters Thursday at a media teleconference. “Is our electric infrastructure ready for that?”

To build or upgrade generation, transmission and distribution systems, co-ops must seek permits from federal agencies under the National Environmental Policy Act. But those approvals can take years to obtain and are often further delayed when groups sue the agencies that issue the permits, Matheson said.

“Everyone, even organizations that don’t always agree on a lot, recognizes the need for a more timely and predictable process in this transition to a much more electrified economy,” he said.

Matt Hanson, CEO of 4,600-member McKenzie Electric Cooperative in Watford City, North Dakota, said his co-op has had trouble bringing electricity to tribal members on the Fort Berthold Reservation because of lengthy delays getting permits from the Bureau of Indian Affairs.

“It prevents economic development on the reservation,” he said. “And it impacts the environment. Our consumers there are running their power off generators until we can connect them to lines. It costs 30% to 50% more to connect homes on BIA-governed land.”

Brent Ridge, president and CEO of Dairyland Power Cooperative in Wisconsin, said the delays in federal permitting are making it tougher for the large generation and transmission co-op to reduce carbon dioxide emissions as quickly as it would like. The co-op’s goal is to use 40% renewable power by 2035.

Two separate energy projects—one to deliver wind power and another to build a natural-gas plant that would reduce the use of coal—have been stalled by litigation and other permitting delays, Ridge said.

“If we are to lower carbon emissions as quickly as possible, we need a process that is efficient and nimble,” he said. “The current process is delaying progress and raising costs.”

Ridge, Hanson and Matheson all urged Congress to support the BUILDER Act. The legislation, sponsored by Rep. Garret Graves, R-La., would limit how long various environmental reviews must take, encourage greater involvement by co-ops and other permit applicants in the process and create deadlines for filing lawsuits after permits have been granted.

Matheson said he thought it was encouraging that the House Natural Resources Committee was focusing on the legislation at a Feb. 28 hearing, which includes testimony from Dairyland Power Vice President of Strategic Growth John Carr.

“I think the bill is a good first step,” he said. “I hope there’s a full-fledged bipartisan discussion in Congress. NRECA would certainly support that. We hope to build some momentum going forward.”

Erin Kelly is a staff writer for NRECA.

The U.S. Department of Agriculture recently announced $2.7 billion in loans for rural electric cooperatives and utilities to expand and modernize their electric infrastructure and increase grid security.

The latest round of Electric Loan Program funds will go toward 64 projects benefiting nearly 2 million people in 26 states.

“This funding will help rural cooperatives and utilities invest in changes that make our energy more efficient, more reliable and more affordable,” said Agriculture Secretary Tom Vilsack. “Investing in infrastructure—roads, bridges, broadband and energy—supports good-paying jobs and keeps the United States poised to lead the global economy.”

The loans include $613 million for installing and updating smart grid technologies, and nearly half of the awards will help finance improvements in underserved communities.

One of the largest awards will go to Withlacoochee River Electric Cooperative, which serves a high-poverty but fast-growing five-county area near Tampa, Florida. The Dade City-based co-op will use its $212 million loan to build and improve 580 miles of transmission line.

About $32 million will be used for substation and transmission projects, and another $17 million will strengthen smart grid technologies, the co-op said. The largest portion, $58 million, will go toward new underground electric infrastructure to serve new residential subdivisions.

Last year, the co-op added 9,000 new accounts, and it expects to exceed that this year, said David Lambert, WREC’s manager of member relations.

“We’re growing substantially,” he said. “These new loan funds will be used for system expansions in those areas.”

Other sizable co-op loans include:

• Clark Energy Co-op, Winchester, Kentucky: $26 million to build and improve more than 250 miles of power line in 12 central Kentucky counties. The loan also includes about $500,000 for smart grid technologies.
• Marshall County REMC, Plymouth, Indiana: $10 million to build and improve 75 miles of line in six counties in northern Indiana and nearly $1 million for smart grid technologies.
• Rusk County Electric Cooperative, Henderson, Texas: $24.6 million to connect an estimated 2,000 new members and build and improve 91 miles of line in five counties spanning 4,000 square miles. Projects include voltage conversion upgrades, a new transmission feed and substation construction. The loan also includes about $1.4 million for smart grid technologies.

View the full list of recipients and projects.

Victoria A. Rocha is a staff writer for NRECA.

When Winter Storm Uri hit Texas in February 2021 and historic electricity demand sent wholesale power prices above $9,000 per megawatt-hour, NEC Co-op Energy was among the retail electric providers in the state that managed to keep power flowing and member prices steady through the crisis.

Varzavand “Avan” Irani, CEO of Nueces Electric Cooperative, which runs NEC Co-op Energy, credits that to a 20-year commitment to reliability and the work of their generation and transmission co-op, South Texas Electric Cooperative.

“Our board has always prioritized the long-term reliability of our members’ power supply needs over short-term gains. With this clear directive in mind, we took early steps to limit our exposure to volatile retail electric pricing through investments in diverse sources of power and long-term power purchase agreements,” Irani said. “South Texas Electric Cooperative, our generation partners, have been extremely responsive to this approach and have played a vital role in the success of NEC Co-op Energy.”

During Uri, it was STEC’s broad portfolio of generation assets, including lignite, natural gas, wind, solar and hydro, that helped keep power flowing and prices in check for NEC Co-op Energy customers.

“STEC’s investments allow us to protect our members from major impacts to their electric bills during events like Winter Storm Uri,” said Frank Wilson, Nueces EC’s chief retail officer.

“STEC’s facilities were winterized, and precautionary measures were taken beforehand. Their plants continued generating throughout and minimized our exposure to high market prices.”

Nueces EC is unique among U.S. distribution cooperatives, managing a retail energy marketing company that serves members hundreds of miles outside its own territory. It created NEC Co-op Energy in 2002 in response to state legislation passed in 1999 that allowed ratepayers to choose their own power provider.

In most states, cooperatives and municipal utilities are exempt from retail choice. In Texas, retail choice is mandatory for utilities that operate within the footprint of the Electric Reliability Council of Texas, which covers most of the state, but co-ops and municipal utilities can opt out of participation in such programs.

“NEC’s retail choice program is yet another example of electric cooperatives listening to their members and providing them with solutions that meet their needs,” said Venkat Banunarayanan, NRECA’s vice president of Business & Technology Strategies for integrated grid services. “The retail choice program offered by NEC is innovative and brings the advantages of a trustworthy and credible cooperative utility partner for the supply of electricity to retail consumers across the state of Texas.”

Those who sign up for NEC Co-op Energy become members, and the co-op procures electricity on their behalf through ERCOT and delivers it through the local power line provider.

“With access to surplus, low-cost coal-fired generation, NEC Co-op Energy was competitively positioned to enter the market and successfully compete against higher-cost natural gas-supplied providers,” said Wilson.

In 2002, Nueces EC served about 12,000 meters, but an agreement with an investor-owned utility to resolve territorial issues added about 5,000 former IOU accounts to the co-ops’ rolls. It also gave NEC Co-op Energy access to market its services for retail choice and allowed the co-op to pursue sales in areas served by IOUs.

Participation has continued at a relatively steady pace, with overall annual growth of about 2%. Over the years, NEC Co-op Energy has gained new IOU members across the state, including several thousand in Dallas/Fort Worth, Houston, Corpus Christi and south Texas.

NEC Co-op Energy’s growth is attributed to a robust marketing campaign and members’ recommendations based on customer care, said Wilson.

“NEC Co-op Energy is consistently recognized as one of the top retail electric providers, with very high American Consumer Satisfaction Index scores,” Wilson said.

The co-op also gives members access to other benefits, including a Halo Flight helicopter ambulance transport program for $1 a month, about half the price offered for the service. And members enrolled in the retail choice program are eligible to receive capital credits distributions based on the co-op’s operating margins.

“In 20 years of making this work, it’s taken a lot of cooperation from our directors, managers, and staff and a lot of input from vendors and other service providers,” said Irani. “But the payoff has been an increase in overall load for the co-op and distribution of its operating costs over a larger membership pool.”

While some retail electric providers rely on marketing gimmicks like large sign-up bonuses or very low short-term rates, NEC Co-op Energy emphasizes reliability and consistent services, said Wilson.

“When the bonus is gone and the low-rate term is over, [consumers] often get an unpleasant surprise. That’s brought many members who left for other power providers back to us.”

Derrill Holly is a staff writer for NRECA.

ARLINGTON, Va. – As President Biden prepares to deliver his State of the Union address later today, National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson urged policymakers to pave the way to a brighter energy future by maintaining a core focus on affordability and reliability.

“The decisions we make today are critical to determining whether there are sufficient resources to meet tomorrow’s energy needs. Above all, American families and businesses expect an electric system that is reliable and affordable. It is crucial that policymakers approach national energy policy with this fundamental expectation in mind,” said Matheson.

“As we continue to electrify the economy, the electric grid will continue to be even more important and all the more stressed. Mapping our energy future will require technology innovation, a modernized system to move power from where it’s produced to where it’s used, and time to accomplish new investments in an orderly fashion. Failure is not an acceptable option for the American families and businesses we serve.”

Electric cooperatives remain focused on working toward meaningful solutions to address reliability challenges spreading across the nation. This includes pressing for substantive action to reform the process for permitting and siting new electric generation and transmission infrastructure.

At the same time, NRECA is advocating for the U.S. Department of Agriculture to fully utilize $9.7 billion in new funding specifically for electric co-ops to implement energy innovation technologies.  Electric co-ops are prepared to make significant investments in carbon capture, renewable energy production, energy storage, nuclear technologies, and electric generation and transmission efficiency.  However, restrictions or limitations on the program would significantly hinder deployment of the funds.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Exciting new grid investments lie ahead, thanks to significant support from the federal government, but policymakers must be sure to prioritize reliability to ensure a successful energy transition, NRECA CEO Jim Matheson told industry leaders Thursday in Washington, D.C.

“We talk about all of the change in the energy industry, but I’ll tell you something that hasn’t changed for us—job one is keeping the lights on,” Matheson said in his address before the U.S. Energy Association’s 19th Annual State of the Energy Industry Forum. “I fear that people in the policy world are not recognizing the importance of reliability.”

Rolling blackouts in nine states during the December holidays demonstrated how vulnerable the grid and power supplies are to weather spikes and why any transition to new energy resources must be properly managed, he said.

NRECA raises the issue of reliability at every turn, he added, because federal agencies can draft rules that inadvertently harm the grid.

“This is something my membership is concerned about,” Matheson said. “We understand the opportunity of new technologies that are available for the future, and we are excited about them. But when you talk about a transition, they are never totally smooth.”

Matheson also lauded historic wins in Congress last year, including direct-pay tax incentives for co-op energy investments and a $9.7 billion voluntary grant and loan program exclusively for co-ops to buy or build clean energy systems. The program will be administered by the U.S. Department of Agriculture.

NRECA has urged the government to structure those programs to account for “the diversity of circumstances of co-ops across the country,” he told the group. “Keep it simple. Keep it flexible.”

Matheson noted that the $1.2 trillion Infrastructure Investment and Jobs Act contains some two dozen initiatives of interest to co-ops, which led NRECA to set up a resource hub for members to learn the latest details and consortia on five areas: electric vehicles, microgrids, cyber and physical security, smart grids and data, and natural hazards.

“As we continue to electrify the economy, the grid is going to be even more important and all the more stressed,” said Matheson.

“We pride ourselves in the co-op world as being the truth tellers, and we don’t gloss over the words ‘affordability’ and ‘reliability.’ It’s our mission every day and what we do for our members.”

Cathy Cash is a staff writer for NRECA.

Federal energy policies that rush to replace fossil fuel power plants with renewable energy are threatening grid reliability at a time when people need dependable power more than ever to carry them through extreme weather events, the CEO of Ohio Rural Electric Cooperatives told House lawmakers Thursday.

“Wind and solar are great, but their intermittent nature and lack of responsiveness to changing electric demand make these resources less valuable and less reliable than conventional fossil fuel generation,” Patrick O’Loughlin told Republican members of the House Energy and Commerce Committee at a roundtable discussion on energy security.

O’Loughlin is also the CEO of Buckeye Power, a generation and transmission cooperative that supplies power to 25 distribution co-ops. Its generation mix includes coal, natural gas, hydropower, bio-gas and solar.

In Ohio, the number of coal-fired generating plants has plunged from 21 facilities with over 20,000 megawatts in 2009 to five plants with less than 8,000 megawatts today, O’Loughlin said.

He pointed to the 2022-23 Winter Reliability Assessment by the North American Electric Reliability Corp., which warned that increased demand for electricity and reduced generation capacity present unprecedented threats of power shortages and disruptions this winter, especially in areas with extreme, prolonged cold.

The report urged state regulators to “manage the pace” of fossil-fuel-powered plant retirements to ensure an adequate supply of electricity. It also recommended “including extreme weather scenarios in resource and system planning.”

Power plant pollution has decreased substantially during the past 20 years, with carbon dioxide emissions from U.S. power generation falling 33% from 2005 levels, O’Loughlin said. Electric production rose slightly while those emissions dropped, he said.

The need for reliable power will continue to grow, O’Loughlin said.

“Electrification of transportation and buildings will further increase electric demand, allow for further expansion of renewable generation and other technologies, but will require more reliability, not less.”

While new technologies are being developed, proven power sources must continue, he said.

“Our electric power system works on the principles of physics and engineering, not aspirational goals. And today more than ever, people are counting on us to get that right.”

Erin Kelly is a staff writer for NRECA.

Electric cooperatives have yet again risen to the top of the J.D. Power rankings, taking four of the top five spots in the annual survey measuring residential electric customer satisfaction.

Sawnee EMC, headquartered in Cumming, Georgia, was the top-ranking electric utility overall with 809 points out of a maximum 1,000. Georgia co-ops were well-represented at the top of the rankings, with Jefferson-based Jackson EMC placing second with 799 points, followed by Douglasville-based GreyStone Power Corp. (796) and Marietta-based Cobb EMC (792).

The two non-co-op utilities in the top five were SRP, a public utility in Arizona that earned the same score as GreyStone Power, and Tennessee-based EPB of Chattanooga (791).

The 2022 J.D. Power Electric Utility Residential Customer Satisfaction Study is based on responses from 102,879 online interviews conducted from last January through November. The survey targeted residential customers of the nation’s 145 largest electric utilities, representing more than 105 million households. Utility performance was measured in six areas:

• Power quality and reliability
• Price
• Billing and payment
• Communications
• Corporate citizenship
• Customer care

Overall residential satisfaction with electric utilities has dropped steadily since a record high of 751 in 2020. That figure fell to 748 in 2021 and 731 in 2022. Customers gave lower marks because of higher monthly electric bills and “feeling worse off financially,” according to the latest survey.

Electric utilities can improve overall customer satisfaction by as much as 72 points by providing more information on financial assistance and energy efficiency programs, said John Hazen, managing director of utility intelligence at J.D. Power.

“Utilities need to be sensitive to the financial challenges that some customers are experiencing,” Hazen said.

For Sawnee EMC, it’s the second time in three years that it’s taken home the trophy for the top spot. Even so, this year’s score of 809 was lower than the 826 it earned in 2020.

“Scores were lower across the board for all utilities, which doesn’t surprise me,” said Blake House, the co-op’s vice president of member services. “People are getting hit everywhere they turn, at the grocery store and at the gas pump.”

Last August, inflation and supply chain issues forced Sawnee EMC to raise wholesale power costs, which resulted in higher monthly bills for members.

“We delayed it as long as we could, but we were forced to increase our wholesale power cost adjustment on our bill to make up for cost increases we were experiencing,” House said. “We were lucky enough to delay that, and I think that helped. A lot of people got hit for all of 2022.”

Member satisfaction has been boosted by the co-op’s longtime emphasis on reliability by sticking to aggressive right-of-way and preventive maintenance schedules and other measures, said House. Sawnee EMC earned the highest scores among co-ops in the J.D. Power survey for power quality and reliability, price and customer care.

“You can’t be the cheapest and be the best at reliability,” he said. “You can’t have it both ways. But I think our members recognize that we have a great balance of affordable rates, extremely good reliability and second-to-none response time.”

Victoria A. Rocha is a staff writer for NRECA.

NRECA is diving into 2023 with a long list of policy goals that range from shaping a new five-year Farm Bill to helping electric cooperatives prepare for catastrophic wildfires.

“All of our priorities are aimed at helping our members maintain reliable and affordable power and giving them tools to help meet the challenges of the future,” said Hill Thomas, NRECA’s vice president of legislative affairs.

Thomas and Ashley Slater, NRECA’s vice president of regulatory affairs, said their teams will work closely together to help pass legislation that benefits co-ops and then ensure that those new laws are implemented as intended.

Co-ops saw major policy wins in 2021 and 2022 with passage of the bipartisan infrastructure law and key co-op provisions in the Inflation Reduction Act, and NRECA will continue its efforts this year to ensure that members benefit fully from the programs created by those laws.

In a recent Q&A session, Thomas and Slater outlined what’s ahead for co-op policy goals.

What are NRECA’s top regulatory priorities for 2023?

Slater: I have a long list!

• Implementing NRECA’s two priority provisions in the Inflation Reduction Act: direct-pay energy tax credits and the $9.7 billion U.S. Department of Agriculture program to assist co-ops with the energy transition.

• Shaping agency funding opportunity announcements for co-op programs included in the $1.2 trillion bipartisan infrastructure law. Those programs include rural broadband, electric vehicle programs to build a network of chargers, grid resiliency and modernization, physical security and cybersecurity, and clean energy programs.

• Protecting co-op access to an affordable, reliable power supply as the Environmental Protection Agency looks to regulate greenhouse gas emissions and air pollutants.

• Ensuring sound transmission policy as the Federal Energy Regulatory Commission contemplates first-in-a-decade transmission reform.

• Ensuring that the Department of Energy uses its presidentially directed Defense Production Act authority appropriately to ease supply chain shortages.

• Ensuring that any new cybersecurity or physical security reporting requirements by the Department of Homeland Security are optimized for co-ops to enhance their security posture and improve their ability to protect against, detect and respond to—or recover from—threats to the electric system.

• Modernizing environmental permitting. The existing processes take too long, are too expensive and are an impediment to co-ops’ ability to meet future energy needs. They need to be modernized to give more certainty in the energy transition.

• Working with co-ops to prepare for and respond to catastrophic wildfires. Co-ops that want to do vegetation management are running into inconsistent guidance from the Bureau of Land Management and the Forest Service. We need to work with the agencies to streamline the process.

• Working with co-ops to ensure that the broadband maps produced by the Federal Communications Commission are done correctly to provide the best picture of where broadband is and isn’t available across the country. The FCC has released a pre-production draft of its latest broadband maps.

What are NRECA’s top legislative priorities for 2023?

Thomas: For the first couple of months, our top priority will be holding Co-op 101 sessions to meet the 81 new members of Congress and educate them about electric cooperatives. Beyond that, we want to make sure Congress is engaged when they need to be to ensure the legislation that has already passed is implemented the right way to benefit co-ops and their members.

A new five-year Farm Bill is being written by Congress that will affect electric co-ops and all of rural America, so that will be a priority. And we support a bipartisan permitting modernization conversation. Also, we’re going to continue to face supply chain problems, and we’re going to continue to work to solve that.

We’ve already had co-op leaders come and testify to Congress about the upcoming Farm Bill. How will it affect electric co-ops specifically?

Thomas: The Farm Bill is the only piece of legislation that Congress does that is uniquely and specifically aimed at rural America. It is designed to support rural America and we share that goal. It’s important for us to talk about our priorities, including many of the USDA programs that we use such as rural development financing, the home energy efficiency program and clean energy deployment financing. These programs can be reauthorized in the new Farm Bill, and we want to make sure they’re operating as effectively as possible and are good to go for the next five years.

The other big conversation will be about broadband. There’s an opportunity to rewrite and improve the USDA ReConnect broadband program, which has provided opportunities to many of our members but could also operate more efficiently. It’s a fairly new program that has received lots of money, but some of our members haven’t been able to get access to it because it’s just too bureaucratic. We need to streamline the program so we can serve the communities that need it most.

Is the environment in the Biden administration and in Congress, with divided government, conducive to accomplishing NRECA’s goals?

Thomas: On the congressional side, with the House majority and the president being from different parties, it is going to be a tough environment for big, game-changing legislation. But we have a good reputation for being able to bridge gaps and find partnerships and bipartisanship. I think there will be lots of opportunities for us to engage in these important conversations.

Slater: We recognize that resource planning decisions are unique to the needs of the specific co-op and the communities they serve. The administration understands that if they want their policies to have a real impact, they have to reach rural America. And they can’t get there without electric co-ops.

That presents a real opportunity for our members who want to participate. In order to push an energy transition across the country, if you want to get there, you have to go through electric co-ops. If there’s no uptake, you’re not going to be successful in getting these dollars utilized…To the extent that we can be a conduit, that’s our edge.

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association CEO Jim Matheson called the North American Electric Reliability Corporation’s latest reliability assessment a “clear and constant warning about the nationwide consequences of continuing a haphazard energy transition.”

“This assessment paints a stark and disheartening picture of the reliability challenges facing much of the United States this winter,” Matheson said. “As the demand for electricity risks outpacing the available supply during peak winter conditions, consumers face an inconceivable but real threat of rolling blackouts. It doesn’t have to be this way. But absent a shift in state and federal energy policy, this is a reality we will face for years to come.

“The pursuit of an energy transition that prioritizes speed over practicality has jeopardized America’s ability to keep the lights on. Today’s energy decisions will determine whether there are sufficient resources for the lights to come on tomorrow. Failure is not an acceptable option for the American families and businesses we serve.”

A recent report from the National Renewable Energy Laboratory concluded that in order to reach the Biden administration’s goal of a zero-carbon grid by 2035, U.S. power generation capacity would have to triple from 2020 levels. Electric transmission infrastructure would need to double or triple as well.

“Electric cooperatives remain focused on working toward meaningful solutions to address reliability challenges spreading across the nation,” Matheson said. “This includes pressing for meaningful action to reform the process for permitting and siting new electric generation and transmission infrastructure.”

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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A resilient, reliable electric grid that provides affordable power is crucial for rural communities as America transitions to cleaner energy, the CEO of an Illinois electric cooperative told a Senate committee Tuesday.

“Diversity of electric generation is essential to our commitment to a lower carbon future,” Mike Casper, president and CEO of Jo-Carroll Energy, told the Senate Agriculture Committee at a hearing on the 2023 Farm Bill.

“As cooperatives look to the future, we are exploring all options, technologies and ideas to work to meet the evolving energy needs of the local communities we serve.”

Casper testified that electric co-ops are facing three key challenges:

• Responding to consumer-members’ desire for a diverse energy mix.
• Maintaining reliable baseload power as part of a lower-carbon future.
• Providing services beyond electrification, including rural broadband.

“Unlike the rest of the electric sector, electric co-ops sell the majority of their power to households rather than businesses,” Casper said. “Keeping rates down for rural families at the end of the line is especially important for JCE.”

The Elizabeth, Illinois-based co-op serves about 26,500 electric and natural gas accounts in four counties and provides high-speed internet service to more than 3,000 subscribers through its broadband division, Casper said.

The distribution co-op gets its power from two generation and transmission co-ops, Dairyland Power Cooperative and Prairie Power Inc., both of which have made substantial investments in renewable energy.

“Dairyland recently completed a large wind power purchase agreement to power 16,000 homes in addition to their current renewable portfolio that makes up over 20% of their generation mix,” Casper said. “Prairie Power is similarly investing in renewable energy through solar farm ownership and power purchase agreements for solar and wind energy.”

Jo-Carroll Energy is supplementing that power by developing three community solar arrays, which resulted from feedback the co-op received from member surveys, Casper said. The U.S. Department of Agriculture’s Rural Energy for America Program provided more than $89,000 in grants to help create one of those solar farms.

A new $9.7 billion USDA program created by Congress this year as part of the Inflation Reduction Act will also help interested co-ops build new clean energy systems by providing grants and loans for projects that include renewable energy, energy storage, carbon capture, nuclear power, and generation and transmission efficiency, Casper said.

“These programs will help co-ops meet the future energy needs of the communities they serve while providing important flexibilities to maintain reliable, affordable power in rural America,” he said.

Electric co-ops rely on funding from USDA’s Rural Utilities Service Electric Program to help pay for essential electrical infrastructure projects, Casper said. But too often, he said, RUS loan approvals are “needlessly lengthened by environmental reviews and decision delays.”

“To meet our nation’s growing electricity needs,” Casper said, “electric cooperatives would benefit greatly from reforms to the federal permitting process that maintain robust environmental protections while ensuring determinations are made in a timely manner.”

Co-ops want to continue to collaborate with Congress to help develop the next Farm Bill, Casper said.

“JCE and the rest of our nation’s electric cooperatives look forward to working together in our shared goal of powering and improving the lives of rural Americans,” he said.

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association CEO Jim Matheson today issued the following statement regarding the midterm elections.

“Keeping the lights on and bolstering the rural American economy are goals that transcend party lines,” Matheson said. “As the nation works towards a future that depends on reliable electricity to power the economy, policymakers must recognize the vital role they play in setting policies that enhance electric reliability and preserve affordability for rural families and businesses.

“America’s electric cooperatives are focused on people, not profits as they work to power stronger communities. That community focus and the millions of voices from those rural and suburban communities will continue to define our congressional outreach as we work in a nonpartisan way to move legislation that builds a brighter future for America.”

Among the priorities for electric cooperatives in the 118th Congress:

• Pressing lawmakers to approach energy policy with affordability and reliability at the core. Today’s energy decisions will determine whether there are sufficient resources for the lights to come on tomorrow.
  
• Advocating for meaningful reforms to the process for permitting and siting new electric generation and transmission infrastructure as well as accelerating approval of multi-agency permits for vegetation management that will help prevent wildfires.
  
• Expanding access to rural broadband and ensuring the accuracy of Federal Communications Commission service maps so that federal funds are dedicated to projects that most efficiently close the digital divide.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Transitioning to a lower-carbon electric grid will place electric reliability at risk unless there is sufficient always-available generation and infrastructure to support the nation’s growing electricity demand, NRECA CEO Jim Matheson said at a Sept. 30 press briefing held by the United States Energy Association.

“We’ve been very firm as a national association that the notion of the electric sector hitting zero net carbon emissions by 2035 can’t happen without severely compromising the reliability of the electric grid,” Matheson said at the USEA virtual event.

With demand for power sharply increasing, always-available generation—nuclear, natural gas or coal—must remain essential elements of the generation portfolio to ensure a reliable and affordable electricity supply. Intermittent renewables alone will not get the job done, he said.

“We’re concerned about reliability,” Matheson said. “You need to have always available, dispatchable resources to maintain the grid. It can’t be 100% intermediate resources and work.”

In addition, substantially more time will be required to build transmission and other infrastructure to tap low-emission energy resources, he said.

“Siting a transmission line is really difficult,” he said.

Matheson praised Congress for its recent passage of the Inflation Reduction Act with direct-pay incentives and the 2021 infrastructure law with funding provisions that will provide “significant opportunities for electric cooperatives to access funds to make real investments in their systems.”

“These pieces of legislation have helped level the playing field and given cooperatives more opportunity,” he said.

David Naylor, president of Rayburn Country Electric Cooperative, a generation and transmission wholesaler based in Rockwall, Texas, also participated in the USEA event and underscored that “our members drive a lot of what we do.”

“As we look to the transition, you know it’s about more than just the commodity itself,” Naylor said. “What’s that value proposition for that member, the consumer at the end of the line? Because that’s ultimately what drives us. We have to be able to show that we’re providing value to those folks.”

Cathy Cash is a staff writer for NRECA.

As America moves to electrify more of its economy, electric cooperatives and other utilities will need to generate more electricity. But that’s difficult to do as plants fueled by always-available power shut down, NRECA CEO Jim Matheson said Wednesday during an Axios event focused on the future of energy.

The event was sponsored exclusively by NRECA and is part of the association’s ongoing effort to elevate the reputation of electric cooperatives inside the Capital Beltway.

“Lowering the overall carbon footprint in this country means we’re going to electrify more and more of our economy,” Matheson said during the virtual event, which also featured Sen. Michael Bennet, D-Colo., and Rep. Bob Latta, R-Ohio. “We need to be making a lot more electricity, but instead, we are reducing our capacity with the shutdown of power plants.”

Solar and wind power can be an important part of a broader energy portfolio, but they are only available part of the time, Matheson said. “At the end of the day, you need power that is there all the time, and that’s going to be nuclear or coal or natural gas.”

The North American Electric Reliability Corp., in its recent long-term grid reliability assessment, said that aggressive government efforts to reduce carbon emissions are among the factors increasing the risks to grid reliability.

“The report said we’re facing greater risk in 2022, and those risks are only going to increase in future years as demand grows, partly driven by extreme weather events,” Matheson said. “And, at the same time, the report said the country is experiencing, in their words, ‘the disorderly retirement of baseload power plants.’

“Electric cooperatives have worked to amplify the NERC report to make sure policymakers, both at the federal and state level, understand that the policy decisions that people are going to make have an impact on the grid … We want to make sure they understand that reliability should be a key focus in all of their policy recommendations.”

Matheson said electric co-ops will benefit greatly from two major pieces of legislation passed by Congress.

The Infrastructure Investment and Jobs Act passed last fall “has so many different programs that offer funding to build better resilience into the electric system, both on the generation side and on the transmission and distribution side,” he said.

And just last month, Congress passed a budget bill that provides direct-pay tax credits for electric co-ops to deploy energy technologies, including carbon capture, nuclear, energy storage, renewables and more. For-profit utilities have had access to tax incentives for decades, but the credits had been out of reach for co-ops since most don’t pay federal income taxes.

“Those two pieces of legislation give us new tools, more flexibility, more investment capacity for our systems,” Matheson said. “And if we project out 10, 20, 30 years from now, people are going to look back at these two pieces of legislation as having tremendous significance in terms of building out a more reliable electric grid.”

Erin Kelly is a staff writer for NRECA.

The ongoing global supply chain crisis, brought on by COVID-19 pandemic disruptions and exacerbated by other factors like the Russian invasion of Ukraine, has spurred double-digit inflation, frustrated companies and consumers and driven the U.S. economy to the brink of recession. Electric cooperatives are feeling the brunt of the impact, facing unprecedented challenges in procuring key grid components like transformers, conductor and power poles.

How are co-ops leading the industry in finding ways to manage and mitigate this supply crunch? Hear from Martha Duggan, NRECA’s senior regulatory affairs director, and Buddy Hasten, president and CEO of Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives Inc.

Listen to the episode below:

You can also listen and subscribe to Along Those Lines on your preferred podcast service:
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Related Content:

Tiger Team: Electric Co-op Leaders Join Effort to Ease Supply Chain Problems
Co-op Forum: Supply Crunch
Infographic: Trouble With Transformers

Find out more about NRECA’s podcast. Questions or suggestions? Email us at AlongThoseLines@nreca.coop.

A group of electric cooperative executives is collaborating with power industry leaders and the federal government to find solutions to supply and logistics challenges that are threatening the nation’s energy needs.

The Electricity Subsector Coordinating Council’s new Tiger Team, created in June, will be chaired by a co-op representative and includes co-ops, public power providers, investor-owned utilities and key federal agencies that are working together to address current shortages and develop strategies to prevent recurrent challenges. Panel members are sharing their operational expertise, identifying alternative vendor sources for essential products and making recommendations to the government on potential solutions.

“The COVID-19 pandemic caused everything to stop or slow down for about 18 months,” said Buddy Hasten, president and CEO of Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives Inc. and chairman of the Tiger Team. “When the world emerged from the worst of the pandemic and got back to business, there was a lot of pent-up demand in the economy.”

Stepped-up activity in residential and commercial construction, labor shortages, and increased federal and state investments in power and broadband infrastructure have contributed to scarcity of certain essential parts and materials. Electric transformers, utility poles, electrical conductor and fiber optic cable are among the products in short supply or facing shipping delays.

Many utilities were forced to deplete their warehouses and staging yards to meet construction demand or handle repairs while manufacturing was stalled.

“This has eroded the traditional reserve inventory of critical infrastructure. Given the supply chain constraints, there are long lead times making it almost impossible for utilities to restock to normal levels of inventory for storm seasons,” Hasten said.

The structure of the Tiger Team ensures that all members, regardless of customer base, revenue or the size of their service territory, will have a voice in policy discussions. It also offers opportunities to share information on emerging issues before they become major problems.

“Addressing ongoing supply chain challenges requires an understanding of the diverse impacts, exceptional collaboration and an openness to creative solutions,” said NRECA CEO Jim Matheson. “It’s great to have electric co-op leaders play a leading role on this Tiger Team, which will be key to identifying potential solutions and ensuring our government partners help take appropriate steps to address the problem.”

Ten members of the Tiger Team were selected by NRECA, the American Public Power Association and the Edison Electric Institute, the association representing investor-owned utilities. In addition to Hasten, co-op representatives are Tim Mills, president and CEO of ERMCO, a manufacturing enterprise owned and operated by Arkansas co-ops; Chris Perry, president and CEO of United Utility Supply, a logistics co-op headquartered in Louisville, Kentucky; and Bob Bisson, vice president of electric system development at Northern Virginia Electric Cooperative, a Manassas-based distribution co-op.

According to the National Association of Manufacturers, there are currently 850,000 full-time manufacturing jobs available in the United States, and a significant percentage of those openings are entry-level positions requiring only high school diplomas. NAM projects a need for 4 million new workers to fill manufacturing positions through 2030.

“An expanded labor force is the only possible near-term solution at ERMCO. Further investments in capacity for both raw materials and transformer production is the long-term solution,” said Mills.

The Tiger Team will meet weekly over the next few months to consider recommendations developed by its members to address near-term challenges and sustainable solutions to meet current and future supply needs.

“The supply chain disruptions are not the same for all manufacturers, and given the random nature of the disruptions, there can be a corresponding randomness to how each manufacturer is impacted,” said Hasten. “Having more than one option to obtain the needed supplies provides a cooperative a higher probability of getting what is needed. However, there are certain limitations to this in that there are some sectors where demand has outpaced supply across the board. These challenges are what we are trying to solve.”

Derrill Holly is a staff writer for NRECA.

Congress must heed recent warnings about grid reliability to ensure that electric cooperatives can continue to provide rural Americans with reliable, affordable power, an Arkansas co-op leader told a Senate panel Friday.

“Electric cooperatives are committed to keeping the lights on across rural America at a cost that families can afford,” said Buddy Hasten, president and CEO of the Arkansas Electric Cooperative Corp., in testimony before the Senate Agriculture, Nutrition and Forestry Committee at a field hearing at Arkansas State University.

“As we look to the future, we worry that federal and state policies, as well as market changes, are causing an imbalance of electric supply and demand that jeopardizes our ability to fulfill this commitment.”

He noted that the North American Electric Reliability Corp. warned in its 2022 Summer Reliability Assessment that parts of the Midwest could face outages during periods of peak demand.

“Put simply, this is because generation capacity has been reduced while peak demand is projected to increase—decreasing supply while increasing demand,” he said. “A concerning pattern is forming in which baseload generation such as natural gas, coal and nuclear energy is prematurely retired and then replaced primarily by intermittent generation like wind and solar.”

It will take a diverse energy mix to provide the power that Americans depend upon, Hasten said.

“To be clear, this is not about prioritizing one energy source over another,” he said. “Our focus is whether we will have the diverse tools needed to keep the lights on for American families and businesses.”

When the electric grid fails, “it almost always results in financial catastrophe and loss of human life,” Hasten said. “It’s important for lawmakers to understand the pivotal role they play in this conversation.”

Hasten also urged Congress to streamline the U.S. Department of Agriculture’s ReConnect Loan and Grant Program, which provides funding for electric co-ops and others to bring high-speed internet to rural communities with little or no broadband service. The Senate agriculture committee is looking to reauthorize the program in the 2023 Farm Bill.

In Arkansas, 14 of the 17 electric co-ops provide broadband service to their members and greatly appreciate the funding provided by ReConnect, Hasten said. However, he said the program is unwieldly and is designed for a traditional telecommunications company, failing to take into account the co-op business structure that has been used successfully for more than 80 years. He said the ReConnect requirements can be especially difficult for small co-ops to navigate since they don’t have large staffs to administer the program.

“As Congress begins to think about the next Farm Bill, ensuring that these programs are flexible and streamlined will allow electric cooperatives to deploy fiber resources as quickly and efficiently as possible,” Hasten testified.

Congress could also help electric co-ops reduce costs for rural Americans by passing key legislation to refinance federal loans and provide direct payments for energy innovation, Hasten told the senators.

In Arkansas, almost every co-op borrows from USDA’s Rural Utilities Service to build and maintain their infrastructure, he said.

“Unlike a private business loan or typical home mortgage, these RUS loans are unable to be refinanced to current market rates without facing a significant prepayment penalty,” he told the senators.

Without relief, co-ops will have to pass expensive debt costs along to their members, Hasten said. He urged senators to support the Flexible Financing for Rural America Act, which would allow co-ops a one-time rate adjustment to current market rates without penalties.

“For electric cooperatives in Arkansas, this would yield over $100 million in future savings for our member-owners,” he said.

Hasten also asked senators to support direct federal payments to not-for-profit co-ops as incentives to help pay for developing new energy resources and technologies, including renewable energy, battery storage projects, nuclear energy facilities and carbon capture and storage.

“Many newer, cleaner technologies are attractive to rural utilities,” he said. “We serve the areas where you are most likely to see expansive solar farms or clusters of wind turbines; however, we are handcuffed by the tax code and the significant capital expenses required to deploy innovative technologies.”

Erin Kelly is a staff writer for NRECA.

ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson issued the following statement on President Biden’s action today to invoke the Defense Production Act to accelerate the production of energy technology and equipment:

“For several months, America’s electric cooperatives have raised serious questions about supply chain disruptions to materials necessary for reliable operation of the nation’s electric infrastructure. In particular, shortages of transformers pose a risk to normal electric grid operations as well as recovery efforts for systems disrupted by a natural disaster. The Biden administration’s use of the Defense Production Act to shorten lead times for supplies of electric transformers is a much-needed step to support reliability and resilience, and NRECA urges inclusion of all stakeholders in the implementation process as well as additional measures to avoid unnecessary interruptions to electric grid operations.

“Numerous assessments have revealed the potential challenges to electric reliability in several states, and NRECA and its members have sought relief for supply chain shortages across the electric sector. That’s particularly true in fast-growing areas of our country and where severe storms threaten our commitment to reliable electricity for 42 million electric cooperative members.

“America’s electric cooperatives look forward to continuing to work with the Biden administration and Congress to reduce supply chain vulnerabilities in the short term while we increase domestic capability to meet our future needs. American families and businesses rightfully expect the lights to stay on at a price they can afford. A diverse energy mix that includes adequate baseload supply and an assured supply chain are essential to meet those expectations.”

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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ARLINGTON, Va. – The National Rural Electric Cooperative Association (NRECA) today said that President Biden’s “permitting action plan” fails to deliver the necessary reforms to streamline environmental reviews and permitting of electric transmission and other projects to modernize America’s electric infrastructure. Such projects are essential to maintaining the safe, affordable and reliable delivery of electricity across the nation.

“The administration’s plan fails to address the root of the environmental review and permitting problems plaguing the electric sector,” said NRECA CEO Jim Matheson. “As we plan for a future that depends on electricity as the primary energy source for most of the American economy, the streamlined siting and permitting of electric infrastructure projects will be a key success factor. Robust reforms are needed to remove barriers and accelerate the construction of modern energy infrastructure.”

For years, electric cooperatives have encouraged policymakers to support solutions that modernize the National Environmental Policy Act (NEPA) and facilitate coordinated, consistent, and timely agency decision-making. Lack of federal coordination, inconsistent processes, and protracted litigation have forced communities to endure costly project delays, some of which led to project cancelation, and threats to electric reliability.

The 102-mile Cardinal-Hickory Creek Transmission Line Project is one example of the need for significant reforms. Work on the project began in 2014 to bring renewable energy online in the upper Midwest. Nearly 115 renewable energy projects are dependent upon the completion of this transmission line. The project’s timeline was jeopardized after a court ruling blocked it from crossing the Mississippi River, which could significantly delay and drive up the project’s costs.

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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Supply chain disruptions plaguing the electric industry are a top focus for the Department of Energy, the principal deputy director of the agency’s Office of Policy told electric cooperative leaders Monday at NRECA’s Legislative Conference.

The COVID-19 pandemic created global supply chain problems that have been exacerbated by the fact that many crucial components for the energy industry are not made domestically, said Carla Frisch, who is also the acting executive director of the policy office.

NRECA has held a series of briefings with the White House and DOE on supply chain challenges and has encouraged the administration to take action to limit the impact of equipment shortages on electric co-ops. Among the equipment shortages affecting co-ops are a scarcity of transformers, conductor for power lines and fiber optic cable.

DOE officials want to continue to partner with electric co-ops to help solve the supply chain problem in both the short and long term, Frisch said.

“Our focus is: How can we help communities build the economic prosperity that they need?” she said. “You’re at the heart of that.”

Frisch said DOE is already working closely with NRECA and through the Electricity Subsector Coordinating Council. The council serves as a liaison between the federal government and the electric power industry on how best to prepare for, and respond to, large-scale natural disasters and threats to critical infrastructure.

DOE has a new network of “regional specialists” that co-ops can now reach out to for help and advice, Frisch said.

“The door is open to co-ops,” she said. “We really want to understand the work you’re doing.”

Frisch also said she hopes that co-ops will take full advantage of the funding opportunities in the $1.2 trillion bipartisan infrastructure bill passed by Congress last year.

The law provides billions for broadband deployment, EV charging networks, electric transmission, energy storage, carbon capture and other clean energy technologies.

“The bipartisan infrastructure law is a very significant investment in the U.S. energy sector,” Frisch said.

Erin Kelly is a staff writer for NRECA.

Electric cooperatives are increasing their investment in renewable energy, but baseload resources like coal and natural gas must continue to be part of the mix to ensure reliable, affordable power for rural America, the leader of Central Iowa Power Cooperative told a House panel Tuesday.

“As we look to the future, intermittent resources such as wind and solar must continue to be complemented and supported by always-available baseload energy resources like coal and natural gas,” Bill Cherrier, executive vice president and CEO of the generation and transmission co-op, testified before the House Agriculture Committee. “System reliability depends on the ability to blend intermittent sources like wind and solar with firm, flexible and dispatchable electric capacity.”

CIPCO, which serves nearly 300,000 residents and more than 13,000 commercial and industrial accounts, has a diverse portfolio that includes wind, solar, hydropower, landfill gas, natural gas, coal and purchases on the market.

“CIPCO’s generation portfolio has evolved significantly, with wind growing from 4.1% in 2010 to 29.9% in 2021 and coal dropping from 58.4% to 29.3% during that same time period,” Cherrier said at a hearing reviewing the 2018 farm bill’s impact on renewable energy opportunities in rural America.

Moving ahead, the co-op recently deployed the 100-megawatt Wapello Solar LLC and the 54-MW Independence Wind power purchase agreements. CIPCO is investing in an additional 100-MW solar project. At the same time, CIPCO recently invested $85 million in its existing Summit Lake generation plant, adding efficient reciprocating natural gas engines that serve peak electric demand, Cherrier said.

“This investment complements our intermittent wind and solar resources while ensuring the baseload generation necessary to meet the 24/7 power needs of Iowans and businesses in CIPCO’s service territory.”

As co-ops add more renewable energy, it’s “critical that policymakers work constructively with industry to achieve these objectives while maintaining the exceptional reliability and affordability that American families and businesses expect and deserve,” Cherrier said.

He urged Congress to approve direct federal payments to co-ops to put them on a more equal footing with for-profit utilities, which have long received tax incentives to invest in renewable energy projects. Co-ops cannot access those incentives because they do not pay federal income taxes.

“The federal tax-credit structure prevents not-for-profit electric cooperatives like CIPCO from taking advantage of the tax benefit to directly build and own wind and solar generation assets,” Cherrier testified. “For cooperatives to reap any benefit for this transition, we must work with third parties that develop and own these assets.

“Direct-pay tax incentives would level the playing field for all electric providers, allowing co-op-member systems and member-owners down the line to have equal access to a diverse power supply mix.”

Congress could also boost rural America’s economy by passing legislation to allow electric cooperatives to refinance federal Rural Utilities Service loans at lower interest rates without penalty, he said.

NRECA and its member co-ops are calling on lawmakers to approve the Flexible Financing for Rural America Act, which permits co-ops to refinance their RUS electric loans without facing costly prepayment penalties. An average co-op with typical RUS debt could save $2 million per year in interest payments at today’s interest rates.

“This essential step will give co-ops the flexibility to best manage their financial circumstances while focusing on cooperatives’ long-term stability and that of the communities they serve,” Cherrier said.

Erin Kelly is a staff writer for NRECA.

Achieving 100% carbon-free electricity generation by 2035 is an overly ambitious goal that could threaten grid reliability and requires technology that is not yet available, NRECA CEO Jim Matheson told a Senate panel Wednesday.

The Biden administration has set a goal of a carbon-free electric sector by 2035.

“As our nation works to strengthen energy security and reliability while also protecting the environment, we must realize that it is not an all-or-nothing choice,” Matheson testified before the Senate Environment and Public Works Committee. “We can address these priorities—but it requires technology and time beyond what is currently available and what many have called for.”

Matheson said lawmakers should focus on three key points as they consider the nation’s energy future:

• A resilient and reliable electric grid that affordably keeps the lights on is the cornerstone of American energy security and the national economy.

• The ongoing energy transition must recognize the need for time and technology and be inclusive of all energy sources to maintain reliability and affordability.

• The bipartisan infrastructure bill made important investments to support an energy transition, but additional actions on tax credits, permit streamlining and coordination on electrification will be required to meet future energy needs.

Matheson urged senators to oppose efforts to “mandate energy sector transformations over unreasonable or unrealistic timelines and that fail to account for regional differences in energy resource availability or the potential for stranded assets.”

He pointed to a recent long-term reliability assessment by the North American Electric Reliability Corp. warning of the risks of energy shortfalls during extreme weather if too much baseload generation is retired prematurely.

“Such policies would have significant impacts on the reliability and security of the electric grid and could have an undue economic impact on co-op consumer-members, particularly as additional costs must be incurred for replacement generation,” he said at a hearing focused on American energy security and investments in clean energy technologies.

Electric cooperatives are accelerating energy innovations and investments in clean energy to reduce carbon emissions, Matheson said. Co-ops lowered their CO2 emissions by 23% between 2005 and 2020—the equivalent of taking nearly 9 million cars off the road.

“As electric co-ops continue to reduce CO2 and other emissions, it is critical that policymakers work with industry in a constructive manner that achieves these objectives while maintaining the exceptional reliability and affordability that American families and businesses expect and deserve,” Matheson said.

The electric sector is poised to play a major role in reducing carbon emissions through increased electrification of the transportation, agricultural and industrial sectors, he said.

“Electrifying other sectors of the economy, however, will require a three-fold expansion of the transmission grid and up to 170% more electricity supply by 2050, according to the National Academies of Sciences,” Matheson testified.

“The increasing role of electrification will place more demands on the electric grid and generation portfolio, and measures to enhance grid reliability are essential to maximize emission reductions and keep costs affordable.”

The bipartisan Infrastructure Investment and Jobs Act passed by Congress last November “included significant opportunities for electric co-ops and the communities they serve through programs supporting clean energy deployment, grid resiliency and modernization, physical and cybersecurity, electric vehicles, and rural broadband,” Matheson said.

But he said more must be done to provide tax incentives, streamline the permitting process and coordinate electrification efforts.

“Policymakers must continue to balance realism with aspiration while recognizing that any energy transition will require additional time and technology and must be inclusive of all energy sources to maintain the reliability and affordability that is the cornerstone of American energy security.”

Erin Kelly is a staff writer for NRECA.

A year after a prolonged severe winter storm caused the near-collapse of the Texas power grid and left more than 4 million households without electricity, state lawmakers, regulators and power providers have worked to assess the causes of the outages and harden critical infrastructure. When another cold snap hit the state early this February, those measures were tested in real-time.

Julia Harvey is vice president of government relations and regulatory affairs at Texas Electric Cooperatives, the statewide association that represents 76 co-ops serving more than 4 million members. She recently discussed steps that have been taken over the past year to shore up the energy grid and what still needs to be done.

The widespread outages last year have been largely attributed to failures in the state’s natural gas infrastructure, is that right?

Harvey: Yes. There was some interplay between natural gas assets and the electric utility system that we had not seen to this extent before. When some aspects of the natural gas transmission system were affected by sustained freezing temperatures, multiple electric generation resources were not able to operate at full capacity because their fuel supply was constrained.

The loss of fuel access for electric generation became a multiple-day event. Because so much generation was unavailable and demand was so high, ERCOT [the Electric Reliability Council of Texas], which manages the statewide grid, had to invoke load shedding operational rules to help stabilize the system.

What have you learned in the past year, and what tangible steps have been taken to reduce the chances of such extreme disruptions from happening again?

Harvey: The susceptibility of certain infrastructure to freezing was central to changes in both legislation and Texas Public Utility regulations. More than 4,000 access points on key utility infrastructure have been inspected since September, and enhanced weatherization measures have been implemented to support increased resiliency during extreme weather.

According to ERCOT, on-site inspections have been completed at 302 generation facilities and 22 transmission facilities, and 321 of those sites now meet winterization requirements imposed by the legislature and the PUC. As important as generation weatherization is, a reliable grid can only be achieved when the gas system is also weatherized.

In regard to the [natural] gas system, an additional reform relates to a new critical infrastructure map being created by the PUC and the Texas Railroad Commission, which regulates the oil and gas industry. This map will reflect current and future operational needs related to the gas supply chain. That allows certain gas transmission assets to be designated as essential so they are prioritized by electric utilities during a load shed event. Gas facilities identified on the map will also be required to weatherize, which will support increased resiliency on the system.

Are you confident that all the relevant state agencies are working together effectively on this issue?

Harvey: Last February’s freeze highlighted the importance of coordination and communication between both the electric and natural gas industries and the regulatory agencies that oversee various aspects of their operations.

The Texas Legislature has now formalized a framework to make that work. It’s a council of oil and gas representatives, the PUC, the railroad commission, and ERCOT that establishes a venue and a forum for communications during emergency events to help ensure that the electricity supply chain operates reliably during emergencies.

How confident are you that co-op voices are being heard as the nature of Texas energy markets and industry oversight evolves?

Harvey: Leading up to the freeze event during the first week of February [2022], the PUC, ERCOT and the new Texas Energy Reliability Council created by the legislature were very good about communicating with all segments of the industry—including cooperatives—regularly and consistently. We feel like we have a seat at the table from the cooperative perspective and our concerns are being heard and addressed. Part of the framework of ERCOT, reaffirmed since the 2021 event, has been the importance of effective communications on market issues, and regulators recognize this.

What challenges remain for the state’s grid?

Harvey: We are fully expecting more changes to be made to the electric system, both to infrastructure and market aspects of the business. Those include the need for weatherization of natural gas components. That’s why advancement and completion of key infrastructure mapping is so important. Portions of those systems need to be weatherized so they can better withstand extreme weather. We also expect additional weatherization requirements to be adopted for electric utility and generation infrastructure.

One of the highest-profile consequences of last year’s event was the run-up on the price of natural gas, which directly affects the price of electricity. Some customers in retail choice areas were directly exposed to those prices. Has that been addressed?

Harvey: In certain retail markets not served by co-ops or public power providers, there is retail choice. During the 2021 freeze, certain providers indexed retail rates to $9,000 per megawatt-hour of electricity, and that led to enormous bills for some consumers. That practice has now been prohibited. The legislature also took steps to ensure that retail choice providers have a higher standard of accountability. Further, the maximum wholesale price has been reduced by the PUC to $5,000, so prices will not rise to the level seen last February.

What do consumers need to know about the changing nature of electric markets and how they can affect reliability?

Harvey: Extreme operating events like the 2021 cold snap underscore the importance of maintaining diversified “all options” generation portfolios that provide service and pricing flexibility.

We support an all-of-the-above energy strategy that allows the evolution of our market design to make sure that with that growth of renewables, that conventional thermal dispatchable generation still has a place in Texas to back that up.

Derrill Holly is a staff writer for NRECA.

The electric industry is facing one of the most challenging and disruptive times in its history as changes in policy, energy markets and consumer expectations drive fundamental changes in how utilities generate and deliver electricity.  

Electric cooperatives recognized this trend more than a decade ago and have been adding wind and solar to their generation portfolios as well as leading innovation in the development of microgrids and carbon capture and sequestration. Today, increasing social, economic and political pressure to accelerate the timeline for this transition is causing concern among electric co-ops and other utilities over how it will affect their ability to reliably and affordably provide electricity.

To delve into this important topic, we’re joined by Lisa Johnson, CEO and general manager of Seminole Electric Cooperative in Florida, and Pat O’Loughlin, president and CEO of Ohio’s Electric Cooperatives and its generation and transmission co-op, Buckeye Power.

Listen to the episode below:

You can also listen and subscribe to Along Those Lines on your preferred podcast service:
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ARLINGTON, Va. – National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson today issued the following statement on House passage of the budget reconciliation bill.

“As electric co-ops work to reliably meet future energy needs at a cost that consumers can afford, they must have equal access to energy incentives and programs,” Matheson said. “The House bill would give co-ops access to direct-pay incentives for energy innovation and create a $10 billion program to support co-ops’ voluntary clean energy transition. This is appropriate recognition of the need to level the playing field for not-for-profit cooperatives, reduce costs and open new doors for innovation.”

The House bill includes two provisions relevant to co-ops:

Direct Pay Energy Innovation Tax Credits: Because electric co-ops are not-for-profit, consumer-owned businesses, they do not pay federal taxes. As a result, co-ops have not been eligible to receive federal tax incentives to promote renewables and other innovative technologies that for-profit utilities have enjoyed for years. The House bill addresses this inequity by providing direct payments to co-ops and municipal utilities to promote investments in new technologies.

USDA Voluntary Energy Transition Program: The bill includes $10 billion that can be used by electric co-ops to help defray the costs of voluntarily retiring coal plants or investing in renewable energy and other technologies that reduce carbon emissions. 

The National Rural Electric Cooperative Association is the national trade association representing nearly 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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An executive representing generation and transmission cooperative interests is urging Congress to help clear bureaucratic and legal barriers that add burdensome delays and increase costs for transmission projects connecting population centers to new sources of renewable energy.

“There is tremendous opportunity to utilize federal lands for both generating renewable electricity, and moving that electricity to load centers,” said Pius Fischer, Basin Electric Power Cooperative’s vice president of transmission, during Tuesday’s virtual hearing of the House Natural Resources Subcommittee on Energy and Mineral Resources.

“We support the role that federal lands can play in expanding the deployment of renewable energy,” Fischer said. “If beneficial electrification is the goal, driving up the cost of electricity due to increased time and costs for transmission is self-defeating.”

Fischer cited Basin’s deployment and operation of 2,500 miles of high voltage transmission and its 1,800 megawatts of owned or contracted wind power as evidence of its support for renewable energy and noted that the G&T now has approximately 300 MW of solar generation under development. He added that systemic challenges complicating transmission design and deployment could be resolved by Congress.

“The federal government should approach transmission development with a coordinated interagency approach,” Fischer said, after recounting the three years it took for Basin Electric to complete the environmental impact statement needed for an essential transmission project serving oil and gas fields in the Bakken Formation.

Fischer said meeting National Environmental Policy Act requirements can take years, in contrast with state siting requirements that can be met in a matter of four to six months. He also cited Basin’s experience with permitting challenges brought under the Endangered Species Act and the Migratory Bird Treaty Act as factors complicating vital transmission projects.

“The additional time and cost of constructing transmission on federal lands becomes a measure of last resort for electric utilities and transmission developers,” he said.

Fischer offered the committee several recommendations to minimize barriers to linking renewables with energy-hungry population centers:

• Provide clear guidance and analysis timeframes for NEPA compliance and encourage the use of categorical exclusions for projects with minimal impact.
• Provide regulatory protections for utilities engaging in lawful activities, such as power transmission for bird strikes subject to endangered species or migratory bird regulations.
• Ensure that the costs of transmission development are borne by users commensurate to the benefits from development of renewable energy projects and the transmission connecting the projects to those areas.

Derrill Holly is a staff writer for NRECA.

As electric cooperatives contend with global supply chain disruptions caused by the COVID-19 pandemic, they’re working with their suppliers, vendors and logistics providers to meet demand for parts and other key components essential to keeping power flowing.

“We’re facing long lead times for pad-mounted transformers and PVC pipe used for conduits for underground distribution,” said Tim Gibson, purchasing agent for Wauchula, Florida-based Peace River Electric Cooperative. “Digital meter availability has also been a big problem due to the worldwide shortage of microchips, so we’ve projected six-month demand and ordered them for staggered delivery to meet our needs.”

Long lead times for some parts, like polyvinyl chloride pipe and fittings, have been extended due to feed stock shortages or curtailed operations at petrochemical plants in Texas and Louisiana caused by weather or staffing challenges. Pandemic-related concerns and shipping delays have also prompted some warehouse managers to increase reserves on hand by doubling and even tripling up on their inventories.

“We’re routinely looking at the usage history of our customers so we can anticipate their actual demand for 2022 and the following year,” said Bret Curry, sales manager at Arkansas Electric Cooperatives Inc. The Little Rock-based logistics and service arm of the Arkansas statewide association serves as the principal parts and equipment supplier for about 400 utilities, including co-ops in five Mid-South states.

AECI also regularly consults with members of the Electric Utility Distribution Association, which includes nine member-owned logistics suppliers serving member-owned and public power interests. Several members of EUDA are reporting similar concerns across their client bases.

“Long lead times have caused inventory levels to fluctuate greatly—making it very hard to manage stockouts,” said Johnny Andrews, chief operating officer of Texas Electric Cooperatives’ manufacturing and distribution services division.

Among the strategies TEC has employed to address the supply shortage has been meeting demand with reconditioned equipment, like meters and transformers.

“This approach has worked extremely well for TEC due to the support of companies like Emerald Transformer and Allegiant Utility Services, which manufacturers and refurbishes meters,” said Andrews. “Both of these organizations have stock of refurbished equipment, offer product warranties that are similar or better than the original equipment manufacturers and can also refurbish and repair the co-ops’ equipment as well.”

While several EUDA members are advising clients that logistics challenges could linger well into 2023, the end of the 2021 Atlantic hurricane season may provide a bit of relief. Storm activity along the Gulf and Atlantic coasts has been less damaging than normal this year, and seasonal reserves of parts and equipment built up since the spring will begin flowing back into inventories in December.

Still, co-ops are being encouraged to work with local developers on major projects to divide larger jobs into several phases, allowing for delivery of essential parts and components over extended periods.

“The key is planning, particularly for large developments or subdivisions slated for construction over the next three to four years,” said AECI’s Curry. “Talk to your builders and developers and tell them just what we’re telling our distribution co-ops. If they tell you they need to build out infrastructure for 100 new homes tomorrow, that’s not likely to be possible in this environment, and there are no hard expectations of that improving anytime soon.”

Derrill Holly is a staff writer for NRECA.

Findings in a new study from the Massachusetts Institute of Technology about decarbonization of the electric industry are raising concerns for one electric cooperative leader about the reliability of the nation’s electricity supply.

“We are alarmed by a rush to renewables without technologies available today to ensure reliable power at affordable prices,” said David Tudor, CEO and general manager of Associated Electric Cooperative Inc., a generation and transmission cooperative headquartered in Springfield, Missouri.

“First, generation and storage technologies do not exist today to responsibly decarbonize our country 50% by 2030 and 100% by 2035. Second, the transmission system in our country will need costly and time-consuming upgrades that face significant obstacles in that timeframe.

“Our mission is to provide an affordable and reliable energy supply; that’s what our member-owners want and expect,” Tudor added. “The people who depend on electricity at the end of the line shouldn’t be forgotten as policymakers debate the impacts of these current proposals. Paying higher bills for unreliable electricity is not an outcome that benefits them or anyone else.”

The study, “Challenges and Opportunities for Decarbonizing Power Systems in the U.S. Midcontinent,” was published this month by MIT’s Center for Energy and Environmental Policy Research.

The report, which looks at transmission capacity, dispatchable generation and electricity use across 18 regions in the Midwest, comes as the Biden administration has committed to decarbonizing the nation’s power system by 2035.

“This ambitious goal will require an accelerated substitution of fossil fuel with renewable generation over the next decade,” the report states.

The study details challenges associated with early retirement of coal and natural gas generation; the impact of various renewable energy standards; and the costs and deployment rates for new and emerging renewable and energy storage technologies, among other developments.

“Our results suggest that by 2030, based on widely used price forecasts, demand projections and planned electricity resources, gas- and coal-based technologies still prevail in the system,” the report notes. However, “coal and fuel oil are expected to be displaced by wind and solar as long as decarbonization is stimulated through further policies. [Natural] gas resources are still needed to help accommodate the significant amount of renewable generation.”

More aggressive carbon policy is needed to reach the administration’s goals, which will require significant capital costs and, ultimately, agreement by a fragmented Congress.

“Policymakers need to choose among policies with an eye to these costs, and address who should pay them—taking into consideration, for example, the impact on low-income households, on industrial competitiveness, among other things,” according to the report.

AECI supplies electricity to six transmission and 51 distribution co-ops, serving 2.1 million consumer-members in Missouri, Iowa and Oklahoma. It uses a diversified portfolio of electric generation resources to meet demand, and AECI increasingly is concerned about pressures to limit or eliminate fossil fuels from that mix. “We cannot sacrifice reliable electric supply or affordable rates,” Tudor said.

He cautioned that the technical means to use renewables to meet 100% of energy demand for the studied area does not exist, and achieving that goal affordably is unlikely for several reasons. Tudor cites the pace of technology development; the current and projected condition and deployment of transmission assets; and the timeframe outlined in public policy initiatives among the disruptive impacts of rapid decarbonization.

“Development that maintains reliable and affordable energy and the ability to move large volumes of renewable energy via transmission system investments will take significant time,” said Tudor.

Derrill Holly is a staff writer for NRECA.

The U.S. Department of Agriculture has approved $598 million in loans for 11 projects, most of them at electric cooperatives, to improve and modernize rural electric infrastructure for delivery of affordable, reliable power to thousands of residential, commercial and agricultural consumers.

Low-interest loans will go to nine co-ops across the country, in addition to the Navajo Tribal Authority in Arizona and ASP2 Rural LLC in Maine. About 460,000 rural residents and businesses will benefit from this round of funding.

Several loans will help expand smart grid technologies, “a catalyst for broadband and other telecommunications services in unserved and underserved rural areas,” the USDA said in its March 16 announcement.

“Now is the time for our nation to make significant investments in infrastructure—roads, bridges, broadband and energy—to improve quality of life and support good-paying jobs, transition to a clean energy economy, and keep the United States poised to lead the global economy,” said Agriculture Secretary Tom Vilsack.

Minnkota Power Cooperative, headquartered in Grand Forks, North Dakota, will receive about $80.5 million in loans to fund 98 generation and power delivery projects, specifically rebuilding power lines and substations and upgrading aging infrastructure.

“We have power lines and substations on our system today in very rural areas that are in some cases 50 to 60 years old,” said Ben Fladhammer, the director of communications for the generation and transmission co-op, which serves 11 member co-ops spread throughout 35,000 square miles in eastern North Dakota and southwestern Minnesota.

“We’ve reached a point where those resources have served us well, but it’s time for us to rebuild or replace them and integrate new technologies and really position our area and our system for the future.”

Smart technologies will modernize many of those substations, Fladhammer noted. “We will have access to more data in the field so that when we go out into our service territory for an issue we will know ahead of time where to start.” 

In Missouri, Intercounty Electric Cooperative Association received a $15 million loan, which it will reinvest in its system for maintenance and upgrades over the next five years. The loan includes $432,000 in smart grid technologies.

“The availability of these loan funds lowers the required amount needed from co-op members through electric rates,” said Heather Satterfield, director of communications at the Licking-based co-op.

Victoria A. Rocha is a staff writer at NRECA.

More than two dozen utility executives, including leaders of two electric cooperatives, testified at two marathon hearings in the Texas legislature last week to examine what went wrong during a February cold snap that paralyzed the state’s electric grid and left millions without power for days.

Residents of hundreds of Texas communities are still struggling to recover two weeks after one of the longest and most widespread power outages in the state’s history, and lawmakers are demanding assurances that the problems never happen again.

“This is the largest train wreck in the history of deregulated electricity,” said state Sen. Brandon Creighton of Conroe.

During the Feb. 13-19 event, Texas’ electric grid was impaired by the loss of generation from wind and solar energy, coal, natural gas and nuclear sources. Just under half of the state’s electric generation sources were offline at one point during the week.  

“When you lose almost half your generation, you are going to have a problem,” Bill Magness, president and CEO of the Electric Reliability Council of Texas, told a state Senate committee last Thursday.

ERCOT is the grid operator overseeing the generation and transmission assets of dozens of utilities in the state, including electric co-ops. Collectively, those utilities serve 26 million Texans in 70% of the state’s territory. Of the 620 generation units on the ERCOT system, at least 185 reported problems.

A combination of ice storms, subfreezing temperatures, mechanical failures, fuel challenges, stakeholder miscommunications and unprecedented demand compromised grid stability and left 4 million consumers without power. Had demand been allowed to outpace the available generation, damage to power plants, substations and other assets would have been extensive.

“We never want to black out the system, so that’s the problem, and there’s nobody that wants to solve it more than me,” Magness said Feb. 25 during a grueling and often contentious 10-hour committee hearing.

During the emergency, ERCOT called on transmission operators to implement controlled outages to prevent catastrophic failures.

“Even though we had sufficient generation to meet the needs of our members, we had to shed load like any other transmission provider,” said Mike Kezar, CEO of South Texas Electric Cooperative, a G&T owned by eight distribution co-ops.

STEC’s five power plants, two wind farms and a pair of hydroelectric facilities, owned or under contract, performed well throughout the emergency, he said. But the G&T’s transmission was still subject to ERCOT-ordered cyclical power interruptions, which averaged 3.5 hours each.

The loss of generation, particularly from natural gas pipeline failures and curtailments of industrial generation sources, prompted ERCOT to activate a $9,000-per-megawatt-hour price cap mandated by the Texas Public Utility Commission. The typical cost of power on the ERCOT grid is around $26 per MWh.

Similar control measures have been used previously for short periods of time to help manage peak summer demand costs, but extended application of the capped rate is unprecedented.

A $2.1 billion February power bill forced Waco-based Brazos Electric Power Cooperative to file Chapter 11 bankruptcy on March 1, citing the need to insulate its 16 distribution co-ops and their members from “unaffordable electric bills,” said CEO Clifton Karnei in a statement.

“This court-supervised process will provide us with the protections and mechanism to protect and preserve our assets and operations and satisfy obligations to our creditors,” he said.

Amarillo-based Golden Spread Electric Cooperative belongs to both ERCOT and the Southwest Power Pool and saw costs balloon in both power markets during the cold weather event.

“Estimates are that the power bill for the month of February 2021 will exceed the cost of power paid in previous years,” said D’Ann Allen, the G&T’s manager of member relations. “Whatever Golden Spread’s share of that expense is will be high and, unfortunately, borne by our members.”

Allen said the co-op is working with its board to determine how to soften the blow for member co-ops. “More than likely, it will take years,” she said.

Some Texas co-ops are adopting measures to ease the impact on consumers, including suspending late fees and disconnects for non-payment, relaxing deposit requirements, offering deferred payment plans and delaying planned electricity rate changes that were scheduled to go into effect this spring.

Derrill Holly is a staff writer at NRECA.

Massive storms can ravage the electric grid, leaving tens of thousands of utility meters stalled until distribution systems are repaired. But the damage caused to transmission systems can present far different challenges for the people who restore power.

That’s why more than two weeks after Hurricane Laura made landfall on the Louisiana coast, two electric cooperatives are still telling members they may not have power fully restored for weeks.

The investor-owned utilities that control transmission assets in western Louisiana began damage assessments and the process of rebuilding their systems within hours after Laura came ashore on Aug. 27 near Cameron. 

While the Louisiana distribution co-ops are not involved in rebuilding the regional transmission system, two generation and transmission cooperatives have had recent experiences with widespread damage, prompting emergency system reconstruction well beyond the scope of routine storm repairs.

When a derecho swept across the Midwest on Aug. 10, Central Iowa Power Cooperative reported outages affecting 58,000 homes and businesses. The storm’s 130-mph winds cut a path of destruction across the state estimated at 70 miles wide and 200 miles long.

“We found miles of line strewn over highways and pole after pole blocking roads,” said Dan Burns, vice president of utility operations for the Cedar Rapids-based G&T. “You couldn’t get trucks in to begin rebuilding the lines, so the first thing we had to do was clear all of that out.”

About 600 of CIPCO’s transmission structures were knocked down, said Burns. “We had damaged infrastructure in 11 counties, and more than 100 of our member co-ops’ distribution substations were offline.”

The damage was comparable to losses experienced by Andalusia, Alabama-based PowerSouth Energy Cooperative during Hurricane Michael. The G&T lost 264 transmission structures after Michael made landfall as a Category 5 storm on the Florida Panhandle in 2018.

“Michael came through the Panama City area, and the devastation was complete,” said Gary Smith, PowerSouth’s president and CEO. “The path of destruction was about 60 miles wide, centered right at Tyndall Air Force Base, and extended about 120 miles deep.”

Specialized Help

The electric power grid is a sophisticated system of complex parts, deployed and installed over many decades.

The basic parts include generation assets like power plants, solar arrays and wind farms; transmission systems that carry high-voltage electricity along conductors supported by tall poles, steel towers or wood-framed structures; and distribution systems that include substations that reduce and divide high-voltage electricity into lower-voltage amounts to safely distribute power to homes, farms and businesses.  

Each element of the grid requires personnel with specific skills. Those involved in building, repairing and maintaining them have their own work procedures, as well as specialized tools, vehicles and equipment.

That can become particularly challenging when major disruptions prompt emergency rebuilds. The pool of available workers who can safely and quickly respond to a transmission provider’s needs is relatively small compared to those trained to help a distribution operator.

“Our guys work on high-voltage lines, and they do it a certain way,” said Smith. “There are not a lot of co-ops in our region of the country that build and maintain their own transmission, so we got help from Cooperative Energy, a G&T out of Hattiesburg, Mississippi, and we used contractors.”

PowerSouth divided personnel so that a representative of the G&T, familiar with its systems and procedures, was paired with each contract or mutual aid crew.

With 20% of PowerSouth’s transmission system down, it quickly became clear that damaged segments could be rebuilt faster than they could be repaired.

“With a normal storm, like a tornado, you can straighten structures, replace cross arms and straighten and rehang conductor and keep moving,” said Smith. “This was all destroyed, so we just rolled it up and put everything back new. That made it a total rebuild.”

CIPCO was in a position to harness more mutual aid when the derecho tore through Iowa, so when preliminary damage assessments turned up widespread problems, CEO William Cherrier contacted his counterparts at four other G&Ts to begin coordinating a collective response.

Iowa’s Corn Belt Power Cooperative and Northwest Iowa Power Cooperative, Northeast Missouri Electric Power Cooperative and Wisconsin’s Dairyland Power Cooperative were happy to help.

“We had not called for mutual aid help before, and we were wondering exactly how that worked as far as having agreements and such, but that turned out to be the easiest part of the entire event,” Burns said. “We just called them and said we need help, and they came, with crews, trucks and any materials they had on hand. By the time they got here, we knew where we needed them most. But the hours required for an emergency rebuild when everybody’s power is out can be tough on crews. They worked 16 to 17 hours a day for 12 days in a row, which is far more intense than a normal rebuild.”

Managing Movements and Many Parts

Big projects always require a lot of planning, and when that’s undertaken in response to major system failures, engineers and logistics planners look for ways to quickly meet the challenges.

“The first three days are complete chaos, and then things start coming together,” recalled Smith, describing the rebuild required after Hurricane Michael.  “There are photos and mapping data gathered from helicopter and drone flyovers to analyze, parts inventories to compile and review, basecamp locations to plot, and lodging and meal services to arrange.”

“You are always prepared for the smaller repair jobs, but you are never fully prepared when systems have to be totally rebuilt,” said Smith.

To expedite restoration, work plans are plotted to allow reconnection to less damaged sections of the grid that often restore service to the most densely populated areas.

“When your crews and contractors get stretched out, they’re moving quickly and putting up a number of structures simultaneously,” said Smith. “You’ll have two or three crews on the same line working on structures. When they get finished, they’ll leapfrog, often moving right behind the crews laying out the matting and cribbing needed to support heavy equipment in wet cross-country areas.”

Keeping those crews moving requires a supply chain designed to work with military precision.  That means starting with what’s on hand and then identifying sources that can guarantee fast resupply and delivery to temporary yards often set up at 50-mile intervals.

“We had some planned rebuild projects that were just about to begin construction, and so we robbed a lot of that material,” said Burns, recalling the first few days following Iowa’s derecho.

CIPCO’s vendor management team contacted suppliers, who shipped more poles, insulators and other components. But, at times, there never seemed to be enough.

“We ran short on most materials, because our needs were 10 times greater than the inventory we had,” said Burns. “On a normal planned rebuild, you know from the plan and profile designs the exact quantities needed of each pole class and length. In an emergency response situation, you need to expedite delivery of poles, and you can’t always be specific. You often shoot from the hip just to keep the rebuild going.”

CIPCO restored transmission service to all distribution substations within 12 days of the derecho, but crews will be involved in follow-up work for months. 

Emergency rebuilds present ongoing maintenance challenges that can impact operations for years. New parts and poles are comingled with assets deployed decades ago, and all the changes and updates must be noted and confirmed in the transmission asset database. More visual inspections than would take place under a scheduled rebuild may also be needed.

“We decided to defer some things in order to get power back on as quickly as possible,” said Burns. “For example, we put up the poles, insulators and conductor, but we decided to defer the pole grounds until a later date. That sped up restoration time considerably. Now that the system is back to normal, we can go back and install them without interrupting service to members.”

Just as every storm presents unique challenges, emergency rebuilds are seldom routine.

“You cannot comprehend the devastation and the chaos,” said Smith. “I’ve been CEO 21 years and, for me, Michael was the worst storm we have seen, and you’re never prepared for your worst storm.”

Derrill Holly is a staff writer at NRECA.

Second of two articles. Read Co-op Voices, Part 1

America’s national pastime has been benched by COVID-19, and the boys—and girls—of summer won’t be coming to play baseball in Cooperstown.  

That’s bad news for members of Otsego Electric Cooperative, who rely on money from renting out their homes to tens of thousands of visitors gathered to watch the annual Baseball Hall of Fame induction and the youth baseball camp games that take place nearby all summer.

With retired Yankee great Derek Jeter scheduled to be inducted in July, about 100,000 visitors had been expected to pour into the upstate New York area. But the event—and most of the camps—were canceled because of the pandemic, costing the region at least $20 million to $30 million in estimated lost revenue, said Tim Johnson, CEO of the Hartwick-based co-op.

“Some of our members live on money from those summer rentals all year long,” Johnson said. “Now that’s gone.”

The coronavirus is affecting not-for-profit electric co-ops and their members differently. Some co-ops, especially those in areas that depend on agriculture, oil or manufacturing, are already facing severe budget shortfalls from falling electricity sales and members’ inability to pay their bills. Others, like Otsego, could be hit hard this summer as tourism plummets amid COVID-19 travel restrictions and cancellations.

NRECA and its member co-ops have launched a grassroots campaign to urge Congress to provide a financial safety net for struggling co-ops and their members as lawmakers negotiate the latest coronavirus relief bill.

Here’s a sampling of what co-ops are facing:

Tourism Losses

Falling tourism is also a problem in Walla Walla, Washington, where wineries, hotels, resorts and restaurants are suffering and about 2,000 jobs have been lost, said Scott Peters, CEO of Columbia Rural Electric Association.

“In April, every hotel would have been filled and all the restaurants would have been booked for wine weekends,” Peters said. “Instead, it was a ghost town.”

The co-op is getting calls from members who have lost their jobs and are asking for help because they don’t have enough money to pay their monthly bills, he said.

“We’re going to have members who aren’t going to be able to dig out of the hole they find themselves in,” Peters said. “I just think Congress is going to have to come up with some kind of needs-based bailout. Co-ops still have to pay our bills, even when our members can’t pay theirs.”

Oil Slump

In Oklahoma, Kiamichi Electric Cooperative CEO Brett Orme says he’s concerned that the declining demand for oil and gas during the pandemic could hurt the co-op’s wholesale power provider by reducing its sales, which could in turn raise prices for the co-op to buy power. The cost of purchasing power represents 60% of the Wilburton-based co-op’s costs, Orme said.

“This could ultimately result in higher energy rates for Kiamichi Electric members who are already suffering from this pandemic,” he said.

In Wyoming, High West Energy has also been affected by the oil industry slump. The co-op’s biggest account, Whiting Petroleum, filed for Chapter 11 bankruptcy protection in April, and the co-op is working with the bankruptcy court to ensure that Whiting will still pay its electric bills. The oil company accounts for more than 10% of the co-op’s annual revenues, said Brian Heithoff, CEO and general manager of the Pine Bluffs-based co-op.

“My fear is that this is a longer-term issue,” he said. “If there is a second or third wave of coronavirus, it could be a permanent loss of oil-related load for us.”

Farm Woes

Corn growers whose crops go to make ethanol are also hurting from depressed oil prices, said Bob Hunzinger, president and CEO of Eastern Illini Electric Cooperative.

Hog producers, who are among the Paxton, Illinois-based co-op’s biggest customers, are having trouble getting the animals to market because of supply-chain breakdowns and may have to euthanize them.

Members whose electric bills were 60 days past due were up 68% from March to April while members whose accounts were 90 days past due were up 50%, Hunzinger said.

“We expect those increases will likely continue,” he said. “We just don’t know how long it will last.”

Manufacturing Declines

At Oregon Trail Electric Cooperative, there are 10 times the normal rate of payment collections as members struggle to pay their bills. Like most co-ops, eastern Oregon-based OTEC has suspended disconnections and late fees during the pandemic, said CEO Les Penning.

Electric sales to local industries have fallen about 20%, Penning said. Eastern Oregon’s timber industry had already suffered decades of decline when the pandemic struck and caused more harm. Regional manufacturing also has been impacted. A local recreational vehicle and camper manufacturer reported decreased production due to supply chain delays and social distancing requirements in the workplace. However, sales have been strong with more people planning to travel within the region after the pandemic.

“I just hope they can ride this out and we as a community can recover stronger than ever,” Penning said.

Poverty Getting Worse

In the Southern California desert, Anza Electric Cooperative serves an area that suffered from high poverty and unemployment even before the pandemic. In the past couple of months, members have increasingly struggled to pay their bills, said Kevin Short, the co-op’s general manager.

Electric sales have also dropped as schools closed early, the nearby casino temporarily shut down, and the opening of a new hotel was put on hold.

Co-ops have kept the lights on during the pandemic, and they’re going to need assistance from the federal government going forward, Short said.

“My message to Congress would be to please put the partisan bickering aside and help people.”

Erin Kelly is a staff writer at NRECA.

Related Content:

Read More on the electric co-op response to the COVID-19 Pandemic

NRECA CEO Jim Matheson told a House Energy and Commerce subcommittee on Wednesday that diversity of electric generation options, including baseload sources, is essential to meeting co-op members’ expectations in a carbon-constrained economy.

Electric co-op members can ill afford energy cost increases during the transition to a lower carbon electric portfolio, Matheson said. That and other factors “make it especially important for co-ops to keep electric rates affordable, maintain reliability and improve sustainability as they explore all ideas to meet the evolving energy needs of their communities.”

Matheson urged lawmakers to recognize that co-ops need a diverse mix of fuels—including coal and natural gas—to provide affordable electricity to rural communities in high-poverty areas. “Knowing that both coal and natural gas will continue to play an important role in providing affordable and reliability electricity in a carbon-constrained future, electric co-ops are actively engaged in carbon capture research and development,” he said.

Testifying before the committee on which he served for eight years, Matheson discussed steps that electric co-ops have taken to expand and diversify their generation portfolios. From 2009 to 2016, the share of renewable energy that electric co-ops provided to their members increased from 13% to 17%.

Carbon dioxide emissions from cooperative-owned generating facilities dropped 12% from 2005 to 2017 as they increased energy efficiency and replaced some coal-fired power plants with lower-emitting natural gas plants or renewable energy, he said. Co-ops’ solar capacity alone has more than quadrupled since 2016.

“Every cooperative’s resource mix is unique to the needs of that co-op and will continue to vary greatly depending on existing resources and assets, the impact on electricity costs for its member-consumers, reliability implications, and the availability of alternative electric generation,” he said.

Matheson was one of six witnesses testifying at a hearing titled “Building a 100 Percent Clean Economy: Solutions for the U.S. Power Sector.” The power sector produces about 28% of America’s total greenhouse gas emissions, making it the second-largest source after the transportation sector, committee leaders said.

Committee Democrats announced in July that they want to pursue legislation to zero-out all carbon dioxide emissions from the U.S. economy by 2050.

Matheson noted that the Department of Energy recently chose NRECA—in partnership with the Pacific Northwest National Laboratory—to research small-scale, community-based wind energy solutions that can be deployed by co-ops.

“Interest among electric co-ops in deploying energy storage is also growing and should accelerate as more experience is gained, costs decline, and battery performance improves,” Matheson said. “Hydropower and nuclear energy also remain an essential source of zero-emission generation for electric cooperatives in certain regions.”

Forcing co-ops to prematurely shut down coal-fired plants or natural-gas facilities would raise rates for consumer-members, many of whom can’t afford to pay more, he said.

Matheson encouraged lawmakers to visit their local co-ops to better understand their unique situations.

“A technology, program or policy that works for one co-op might not work for another,” he said. “Having the flexibility to implement energy solutions across the many regions where cooperatives serve is a critical factor today and for the future of our members.”

Matheson urged lawmakers to “ensure that any proposals that this committee considers provide long-term certainty and flexibility that maintains energy diversity for electric co-ops, supports reliability of the electric grid and minimizes undue harm for consumers.”

ARLINGTON, Va.—Lawmakers should consider the needs of electric cooperative members when exploring ways to continue reducing power plant emissions, NRECA CEO Jim Matheson told the House Energy & Commerce Committee’s Energy Subcommittee today.

“America’s electric co-ops are engines of economic development focused on responsibly delivering affordable, reliable electricity in communities across the nation,” Matheson said. “Diversity of electric generation, including baseload sources, is essential to meeting co-op members’ expectations. Consistent with that approach, electric co-ops thoughtfully explore all ideas that promote these core principles as they work to meet the evolving energy needs of their local communities.”

Electric co-ops have and will continue to diversify their energy portfolios, with a majority of their power now coming from low and no-emission resources. Moreover, by electrifying processes in other sectors of our economy, the electric sector can help reduce emissions across the entire economy.

“Having the flexibility to implement energy solutions across the many regions where cooperatives serve is a critical factor today and for the future of our members,” Matheson said. “Electric co-ops have invested in a variety of measures to reduce emissions, such as renewable sources, energy efficiency, storage options, and research on carbon capture technologies.”

Matheson stressed that every cooperative’s resource mix is different and will continue to vary greatly depending on existing energy resources and assets, the impact on energy costs for member-consumers, reliability implications, geographic location, and other local circumstances.

“Policymakers should be mindful of this and ensure that any energy policy proposals provide long-term certainty and flexibility that maintains energy diversity for electric co-ops, protects reliability of the electric grid, and minimizes undue economic impacts for consumers – especially those in rural and persistently poor communities,” Matheson said.

Matheson’s written testimony to the committee is available here.

The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.

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