Defining Energy Affordability
Rising energy costs and climate change policies demand legislative solutions that keep consumers in mind
By Megan McKoy and Scott Gates
Electric co-ops nationwide meet roughly 62 percent of their power requirements from coal-based generation, 15 percent from nuclear plants, and 10 percent from natural gas. Hydropower and other renewable sources (like wind and landfill gas) make up 11 percent; the remaining 2 percent primarily comes from diesel fuel.
According to the U.S. Energy Information Administration, the nation’s electricity consumption is growing annually at a rate of 1.07 percent. Many electric co-ops are seeing even faster growth.
With demand for electricity rising and capacity maxed out, utilities across the country will need to build power plants once again. Over the next decade, co-ops alone must build 21,000 megawatts (MW) of new generating capacity just to keep the lights on.
Increasing demand worldwide has increased the cost of new power plants and the fuel to run them. Unfortunately, energy and climate change policies under consideration in Washington, D.C., may add another cost in the form of a carbon tax. This could present electric cooperatives and members with their greatest challenge in history.
“When you look at the Obama administration and the makeup of Congress, there’s not much question they’re going to take up a climate change bill, and they likely will pass one,” explains National Rural Electric Cooperative Association (NRECA) CEO Glenn English.
PJM Interconnection, a regional transmission organization representing the largest grid in North America, recently completed one of the few studies to examine the potential impact of climate change legislation. The study estimates show a wholesale price increase of ranging between $7.50 to $45 per MWh by 2013. That would add $5.9 to $36 billion to the cost of energy in the PJM market. The studies calculations are based on projected carbon prices ranging from $10 to $60 per ton.
“Our Energy, Our Future”
Affordability plays a key role in NRECA’s “Our Energy, Our Future”™ grassroots awareness campaign. The effort, which seeks participation from millions of co-op consumers, focuses on educating Congress about the need to craft energy and climate change policies that will support a diverse mix of power generation, while keeping electricity reasonably priced.
“We’ve always counted on our consumers being part of the solution,” relates English. “It’s not a case where you can sit back and expect somebody to take care of you. It’s a case in which we’ve all got to work together.”
This year, “Our Energy, Our Future” looks for co-op consumers to ask their U.S. representative and senators if Congress will work with electric cooperatives to make sure reliable power is available at a price consumers can afford.
Without our consumers’ help, local co-ops will not be able to stop it. The stakes are enormous, both from a standpoint of affordability and from a standpoint of availability.
To get involved with the campaign, visit www.ourenergy.coop.
Megan McKoy and Scott Gates write on consumer and cooperative affairs for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.
© 2014 Illinois Country Living Magazine.
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