Why the CPP Is So Bad for Rural America
IN AUGUST, THE U.S. Environmental Protection Agency unveiled the final version of a plan to reduce carbon dioxide emissions 32% by 2030. Dubbed the Clean Power Plan, EPA’s blueprint is one of those ambitious initiatives — a big overreach, some say — that will have extensive and long-term consequences, some of which we haven’t yet begun to understand.
But we know enough to know that the plan won’t be good for our country’s rural regions. On the day in October that EPA published the Clean Power Plan in the Federal Register, a group of 39 generation and transmission cooperatives (G&Ts) led by the National Rural Electric Cooperative Association filed suit in the U.S. Court of Appeals for the D.C. Circuit seeking relief from the Clean Power Plan. Minnkota Power Cooperative, headquartered in Grand Forks, N.D., and other co-ops believe the new rules exceed the legal and regulatory authority granted EPA by the Clean Air Act. It was the first of numerous lawsuits challenging the CPP, including legal efforts by 27 states to block or suspend implementation of the rule.
According to a new industry analysis by the National Economic Research Associates, the cost of EPA’s plan could approach $300 billion. It’s a big number that begs a big question: Who will pay for it?
Well, you and me and every person or entity that relies on electricity to heat a home, turn on the lights at a local hardware store, power a dairy farm’s milking machines or enable your school’s smart boards. For Minnkota’s member-users, electricity is economic lifeblood.
When frigid winter temperatures arrive, co-op power goes from being a modern convenience to an absolute necessity. Just ask one of our members who was around before the co-op provided electricity more than 75 years ago.
If you happen to reside in an area served by an electric co-op, a designation that covers 75% of the country’s land mass, it’s likely that you’ll shoulder a disproportionate share of the burden. That’s because not-for-profit electric co-ops only receive revenue from one place: their member- users. Rural citizens are now on the front lines of the EPA’s power play without a fallback position. They’ll dig into their own pockets to pay for EPA’s plan, and they’ll have to dig deep.
The CPP will usher in an era of escalating electric bills and stifled economic growth that will harm the people least able to afford sharp increases in utility bills: the farmers, small business owners and families served by the country’s more than 900 electric cooperatives. Hardest hit will be families living on fixed incomes or in poverty.
Indeed, America’s electric cooperatives serve 93% of the nation’s persistent poverty counties. On average, 23% of coop households nationwide earn an annual income of less than $25,000. That’s 11.5% below the national average.
The CPP will cause some co-op power plants to shut down, including plants still repaying loans for construction or upgrades. Some co-ops’ member-owners will pay twice for their electricity; once for the shuttered plant and again to buy power from somewhere else. At Minnkota, more than $425 million has been invested recently in emission control projects on our coal-based power plants. Stranding that investment would put significant upward pressure on Minnkota’s rates.
The trouble doesn’t stop there. Those responsible for ensuring the reliability of our nation’s electric power system have raised red flags about the plan’s impact. They believe the EPA underestimated the amount of time it would take to build new power plants and the necessary power lines needed to comply with the rule. The North American Electric Reliability Corporation noted that “constructing the resource additions, as well as the expected transmission enhancements, may represent a significant reliability challenge given the constrained time period for implementation.”
Similarly, the Midcontinent Independent System Operator, which supplies power in 15 states, worries that grid reliability could be overloaded or severely overloaded in several states in which it operates. In short, the EPA’s aggressive timeline for implementing the plan, and the steepness of the emissions cuts, could jeopardize the affordable, reliable supply of electricity that helps power rural economies.
Lost in the debate over the Clean Power Plan is an acknowledgment of the major financial contributions already made by the country’s co-ops in the advancement of practical clean power initiatives. The NRECA and America’s electric cooperatives have developed and implemented a broad range of clean initiatives, from multipollutant controls that have sharply cut emissions of sulfur dioxide, nitrogen oxide and mercury at power plants to the SUNDA project, which promotes community solar projects.
Minnkota takes great pride in its efforts to lessen its environmental impact and advance renewable energy production. Nearly 30% of our electric generation capacity comes from wind – one of the highest percentages among all utilities in the United States.
Minnkota also administers some of the nation’s most successful demand-response and energy-efficiency programs.
But these proactive efforts and investments matter very little in complying with the CPP. Instead, the EPA’s rule set our nation on a path of picking winners and losers.
Unless something changes significantly, America’s electric cooperatives will most certainly be the latter.
Mac McLennan is the president and CEO of the Minnkota Power Cooperative.
See the article here.
- On January 14, 2016