Why Public Policy Matters
More than 70 years ago, a fledgling network of locally controlled, member-owned, not-for-profit utilities tackled the massive task of bringing safe, reliable, and affordable electric service to America’s vast rural heartland. After meeting that initial challenge, electric co-ops have continued to expand operations, and now serve more than 40 million consumers in 47 states.
But a new challenge, as daunting as any faced since those early days, is putting electric co-ops to the test. Between now and 2030, consumer demand for electricity is expected to increase by 30 percent. To meet that, our nation must add about 264,000 MW in power plant capacity. However, road blocks–some out of our control, some not–are delaying this required boom in generation construction.
Economic growth around the world has produced record orders for basic construction materials such as steel, cement, and crushed stone. As a result, the average cost of building coal and nuclear power plants here at home has increased by 27 percent over the past year, and is up a full 130 percent from 2000.
Now a second factor, the need to develop climate change policy, has slowed desperately needed power plant construction even further. With uncertainty about potential costs of climate change policy, many lenders see the needed plants as too risky. Of 151 new coal plants announced since 2002, only 15 have been built–generation and transmission co-ops (G&Ts) have full or partial ownership in six of them.
Issues preventing development of coal and nuclear power facilities are forcing power suppliers to use fuels such as natural gas, which is subject to wide swings in price, to generate electricity. Coal itself, a once inexpensive fuel, has recently shot up in cost as well. The impact of these mounting fuel issues is being compounded across the country as dramatic electric rate hikes are announced, driven by steady cost increases.
But the economic effect of climate change policy has yet to be seen. Electric cooperatives are fighting to protect our members; fighting to minimize the cost impact of legislation currently being discussed by lawmakers – legislation that could otherwise go wrong for consumers, and go wrong for the country.
As your provider of safe, affordable, and reliable electric service, Indiana's ELectric Cooperatives are champions of the right policy, which meets its climate change goals while keeping bills affordable. What has been described as a perfect storm–the clash of growing demand, skyrocketing power plant construction and fuel costs, and climate change policy constraints–has hit home. It is no longer a far-away problem reserved for backroom discussions in Washington, D.C., or state capitals.
As you may know, electric cooperatives across the country have launched a grassroots campaign called “Our Energy, Our Future: A Dialogue With America” to ensure that your voice gets heard. This campaign seeks to engage elected officials on critical energy questions, such as how to balance growing electricity needs and environmental goals, and how much of all this will affect electric bills.
Please visit www.ourenergy.coop to join this important conversation. Let lawmakers know that what actions they take regarding our energy challenges have will carry enormous consequences for the folks back home.
It is time to make our voices heard.
