Coal-fired rural co-ops dig in against EPA emission rules, but a few mavericks flirt with renewables

Source: Benjamin Hulac, E&E reporter • Posted: Thursday, August 14, 2014

After spearheading a 3 ½-year effort to build what is now the largest solar farm in Iowa, Warren McKenna is optimistic about his rural electric cooperative’s renewable energy goals in Frytown — a tiny, unincorporated town in the southeast corner of the state.

“Solar is coming on strong,” said McKenna, who is the general manager of the 650-member electricity co-op, formally known as the Farmers Electric Cooperative, and has been involved in solar energy since 2008. “Our goal is to have 15 percent of our power produced locally [with renewable energy] by 2025.”

The shiny 2,900-panel array will generate more than a million kilowatt-hours annually, enough to power approximately 120 member homes. McKenna said roughly 50 percent of the electricity his co-op provides comes from coal.

McKenna’s group is a member of the politically powerful, Washington, D.C.-based National Rural Electric Cooperative Association, or NRECA, that powers the country’s rural regions. It is a 47-state network of 905 cooperatives and keeps the lights on for more than 42 million consumers, roughly 13 percent of the U.S. electricity market.

Coal is NRECA’s fuel of choice. Seventy percent of the power from NRECA’s generation and transmission cooperatives is fueled by coal, and 58 percent of the fuel mix sold by distribution co-ops is coal-based, according to 2012 data. Meanwhile, the use of coal by most U.S. utilities has been falling. It generated about 37 percent of the electricity consumed throughout the country in 2012.

What’s going on in Frytown is running against the rural grain. Its solar array was installed by Eagle Point Solar — a Dubuque, Iowa-based company that recently won a legal battle over a regional utility trying to prevent the company from installing solar panels on a local government building.

Frytown’s solar farm will remain under Eagle Point’s control for the next decade, until McKenna’s co-op buys it back. “It’s an easy technology to put down,” he said, because there are no moving parts. “We’ll meet that 15 percent [renewable energy] goal by the end of next year.”

And McKenna wants to eventually double the size of the cooperative’s solar farm, adding, “We’ve got 4½ more acres to add to.”

Journey from FDR to the Chamber of Commerce

Before President Franklin Roosevelt established the Rural Electrification Administration in 1935 — a decision that brought electricity to the majority of American farms — utility companies did not want to spend the money to run long power lines out to rural areas. Farmers rose to work and went to bed with the sun.

To change that habit — and rural life in general — rural electrics became heavily invested in power plants that burned coal. The nonprofit NRECA is among those now digging in against U.S. EPA’s proposal to regulate the carbon exhaled by the country’s power plants.

President Obama’s plan “would increase electricity costs on all Americans,” Jo Ann Emerson, the CEO of NRECA, said in a video response to the proposed Clean Power Plan, or CPP, which was drafted to cut carbon emission levels by 30 percent from 2005 levels by 2030. “Energy independence is so critical for our economic security, our personal security and our national security. We’re almost there. Let’s not let anything set us back.”

EPA’s proposal would drive up costs for the cooperative’s members, according to NRECA figures, in part due to the organization’s continued investment in coal- and natural-gas-fired plants, said Mark Hayes, a NRECA spokesman.

Hayes noted that the organization cannot “write off the loss” like other businesses that could be impacted by the rule. “We built coal back then because that was the only option.

“We’ve had a lot of good meetings with the EPA, and we hope they’re listening,” Hayes added.

EPA projected the CPP would contribute billions of dollars of benefits to public and climate health — preventing 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks among children. The agency estimates electricity bills will drop by about 8 percent in 2030.

NRECA is lined up beside the U.S. Chamber of Commerce, which does not see such a sanguine picture, estimating the CPP will cost $28 billion on average annually until 2030.

But Frytown is not alone among NRECA members. Others have begun to consider non-coal energy alternatives.

Other experimenters

The Cloverland Electric co-op in Dafter, Mich., can produce up to 36 megawatt-hours with its hydroelectric plant, and the Peninsula Light Co. in Gig Harbor, Wash., operates a 20-megawatt wind-powered system. And the chapter with perhaps the most audacious renewable energy goals — the Kauai Island Utility Cooperative in Lihu’e, Hawaii — plans to generate half of the power it distributes from renewable sources by 2023.

But the likelihood that the currently tabled EPA rule would hurt rural America, at least in the short term, is considerable.

The organization distributes power to some of the country’s poorest counties, and NRECA maintains that thosecosts from the new rule would get passed down to 70 percent of the Americans living in persistent poverty, all of whom are NRECA customers.

If more than 20 percent of an area’s population has lived below the poverty line for the last 30 years, it is considered a persistently poor region.

Moreover, NRECA-backed cooperatives sell power to 93 percent of the country’s impoverished counties — home to approximately 4 million citizens.

Hayes said the solar farm McKenna and his cooperative colleagues just raised would not necessarily work for other co-ops.

“In this case, they were willing to invest in solar and renewables,” he said, adding that the Frytown cooperative was on track to break even on its investment in eight years. “They started small because they weren’t sure how popular it would be.”

Because of its sprawl across the U.S. and its big footprint in rural areas, NRECA has nurtured considerable clout in Congress. After replacing Glenn English, the former congressman from Oklahoma, as CEO of NRECA, Emerson vaulted from representing Missouri’s 8th District in D.C. to leading the nonprofit’s push against EPA’s development of carbon regulations.

“More than 500,000 Americans have united to oppose regulations that will constrain fuel types for new power plants because they’re rightly concerned about affordable and reliable electricity in this country,” Emerson said in a statement on May 7.

‘Every meter is a vote’

“Any proposal that relies on technology that is ‘technically feasible’ instead of ‘commercially viable’ belies common sense and threatens the reliability of electricity in this country. Electric co-ops operate in the real world and understand the importance of diversity for fuel sources when it comes to generating electricity,” she added.

During her 17-year tenure in D.C., Emerson has described climate change as a matter of debate, questioned the benefits of regulating carbon dioxide and EPA’s authority to regulate it, and formally called for EPA to withdraw a 2009 rule to measure greenhouse gases emitted by U.S. businesses.

She also has left her fingerprints on the group’s recent campaign contributions. The politician who has received the most money during this election cycle is Rep. Jason Smith (R), the representative for Emerson’s old district.

NRECA has donated 69 percent of its contributions to Republicans — though the group has donated a total of $2,336,547 to a variety of politicians from almost every state, according to the Center for Responsive Politics.

Members of Congress from Texas ($135,000), Illinois ($103,405), Ohio ($102,000), Missouri ($76,100) and Georgia ($75,600) are the top recipients from NRECA coffers. Out of the top 20 lawmakers who have received donations from NRECA, only one represents an entirely urban area — Rep. Danny Davis, a Democrat representing Illinois’ 7th District.

Cooperative members have votes in their local co-op’s decisions as long as they pay for an electric meter powered by the co-op, as Hayes said when asked about EPA’s proposed rule and its trickle-down effect on the NRECA constituents.

“Every meter is a vote,” he said regarding cooperatives’ choices to invest in renewable energy sources. “It really does come down to our members.”

The effort to roll back carbon oversight from EPA is not politically motivated, Hayes said, but based in economics. “It comes down to cost,” he said. “It’s not about any other issue.”