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This is NOT the answer

Administration proposes budget cuts for RUS, imposes even more moratoriums on energy development

Basin Electric Power Cooperative - June 8, 2010

I’ve spent considerable time in my previous columns writing about what poorly crafted climate change legislation could do to the utility industry and consumers’ electric bills. Now we’re facing another challenge as the Environmental Protection Agency (EPA) plans to regulate carbon dioxide emissions under the Clean Air Act. These rules would make new fossil fuel facilities nearly impossible to build and existing ones difficult to maintain, and will raise our electricity rates, jeopardizing thousands of jobs in our region.

But, taking a step back, we have another significant issue that, if not addressed, will impact our ability to generate and affordably deliver electricity to our members’ homes.

Many rural electric cooperatives, including Basin Electric, have relied on the U.S. Department of Agriculture’s Rural Utilities Service (RUS) Electric Program to ensure affordable access to electricity for their customers. Unfortunately, the administration’s proposed Fiscal Year 2011 budget request cuts the RUS program by $2.5 billion. Building on the previous administration’s moratorium on loans for baseload units, it also prevents RUS from lending for natural gas peaking plants, as well as environmental upgrades to existing power plants. These restrictions remove the option of building cleaner-burning natural gas units and also make it more difficult to build renewable wind power. Wind energy is paired with natural gas to ensure electricity supply is uninterrupted. These limitations on RUS do not save taxpayers a dime since the Electric Loan Program actually brings money into the U.S. Treasury – more than $50 million a year.

This comes at a time when large tax benefits continue to flow to investor-owned and municipal utilities. This just doesn’t make sense to me.

I was reminded of our roots – and the reason for the Rural Electrification Act – on Good Friday when a bizarre “thundersnow storm” wreaked havoc on central North Dakota and northwest South Dakota. Mor-Gran-Sou Electric alone lost 12,000 poles and 600 miles of line resulting in power loss to 1,800 members. While cooperative crews and contractors throughout the country responded within hours, many members were without power for weeks. Launching a full-fledged cooperative force, crews worked tirelessly to rebuild lines to some of the most rural areas of the state.

Today, as we build on our mission to serve rural America, we still face challenges. The average household income in rural electric cooperative service territories is about 14 percent below the national average. The task of delivering this electricity is further complicated because cooperatives serve 2.5 million miles of line, covering 42 percent of the nation’s electric distribution lines and three-quarters of the nation’s landmass.

Let’s put this into perspective. Today, we face impending climate change legislation and regulation of carbon dioxide by EPA. We are diversifying our energy portfolio by adding more than a thousand megawatts of wind and natural gas generation. We are engaged in a front-end engineering and design study exploring the capture of carbon dioxide from the Antelope Valley Station. Even with these challenges, we continue to serve some of the most remote locations of the country. Why is the federal government imposing even more restrictions that make it hard to develop low-carbon electric generation options?

Several members of Congress recognize this inequity and have launched a letter-writing campaign to House and Senate Appropriations Committee members. I thank those who have signed on to this letter, and I encourage those who haven’t yet to join their colleagues.

Basin Electric has a history of searching for innovative solutions, and taking action on those solutions. That legacy will continue. But, it takes American ingenuity and a partnership with the federal government to develop viable solutions to some of our most vexing energy challenges. Diminishing a strong program that has done so much good by curtailing our ability to even develop renewable energy is not the answer.