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A look ahead at 2010

New year brings more debate over what's best for our consumers, our world.

Basin Electric Power Cooperative - January 29, 2010

Ron Harper, CEO and general
manager

Can you believe it: the year 2010? Not too long ago, I was sitting down to write my column for the start of 2009. You have to admit, 2009 seemed to fly by faster than normal, but maybe it was because the entire Basin Electric family was extremely busy and barely had time to look up.

These are exciting times to be in the electric utility industry. Some question my sanity when I say that, but I'm an optimist, and it's true. The whole industry is being plunged - and in some cases forced – headlong into considering dramatic changes in how electricity is produced, transmitted and distributed to the person at the end of the line. Are these changes right or wrong? It depends on who is talking about them. In our case, some make sense from a system utilization standpoint, but others I am really having to question. As in any debate, people talk above their knowledge level in their attempt to persuade policymakers to go their way, when in reality the outcome may have grave and dramatic consequences to the economy and us individually.

In December, thousands flocked to Copenhagen, Denmark, to discuss a climate change framework. I read, watched and listened with great interest to the events leading up to, during and following this two-week long worldwide meeting of 192 countries. A Dec. 6 article written by the Associated Press stated two key building blocks were necessary for success of the U.N. climate summit. One was setting targets for controlling emissions of carbon dioxide and other global warming gases, and the second was agreeing on how much rich countries should pay to support poor nations' clean energy technology, and for seawalls, irrigation and other projects to counter a changing climate.

At the end of the two-week summit, many were disappointed in the outcome, but most concerning for me was the United States' commitment to participate in funding a $10-billion annual fund to support the poor and developing countries by 2012, and $100 billion by 2020. My thoughts immediately centered on where all this money is going to come from. From what I have seen in the different drafts of legislation before Congress, it will come from those who use fossil fuels to produce energy. I am not just talking about the production of electricity; I am talking about increased costs and taxes associated with any means of transportation that use fossil fuels. The bottom line is, we will see our costs to use fossil fuels increase by varying degrees, but they will certainly increase.

We have projected in one scenario the impact on our members in 2012 to be $497 million in that year alone. But until actual legislation is passed, the ultimate outcome is uncertain. What we do know is, even though we have been deploying a carbon strategy since 2001 by diversifying our generation portfolio with renewable and natural gas generation, we are still heavily dependent upon coal - rightfully so; it is abundant and has historically provided low-cost energy to rural America and others.

A surprising fact on fossil fuel consumption: California's use of fossil fuel-produced electricity increased by 35.5 percent between 2006 and 2008, according to the California Energy Commission 2008 Net System Power Report. It seems to me fossil fuels are very important to the state, but their public actions would lead one to believe otherwise.

I offer the above as my thoughts on the challenges that lie ahead. I know some will disagree with my message, but I believe 2010 will be filled with extremely emotional debates on this issue and yet filled with tremendous opportunities for mutual success if we work together. Again I'm an optimist; the glass is always full!
One example of success: I received from a friend some quality California wine that included a certificate that states, “This shipment is carbon balanced. All CO2 emissions attributed to the delivery of this product from the winery to your hands have been offset on your behalf with renewable energy products." Now that's what I call mutual success; I get good wine, and they get to brag about being carbon balanced!

Best wishes for safe and prosperous New Year!