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Co-ops tell story of rural Tennessee during day on the hill

More than 200 electric co-op leaders from across the state were in Nashville on Monday and Tuesday, Jan. 29 and 30, for the 2018 Tennessee Electric Cooperative Association Legislative Conference. During meetings with legislators on Capitol Hill, co-op members and employees stressed the important role that co-ops play in their communities and briefed lawmakers on issues that impact rural and suburban Tennessee.

Lt. Gov. Randy McNally opened the meeting on Tuesday morning. “I’d like to welcome you here to Nashville,” he said. “I appreciate the job you do.”

Tennessee’s electric cooperatives maintain a visible presence in Nashville and Washington, D.C., to protect the interests of co-op and their consumer-owners. “We are here to give a voice to rural Tennesseans,” says David Callis, CEO of the Tennessee Electric Cooperative Association. “We must tell the electric cooperative story and educate lawmakers about the impact of proposed legislation.”

“Advocating for our members doesn’t stop at the edge of our service territory,” said Michael Watson, president of TECA’s board of trustees and CEO of Duck River Electric Membership Corporation. “It is critically important that our elected leaders in Nashville keep cooperatives in mind when crafting laws and regulations that impact us. We have a responsibility to our communities to tell their story.”

Co-ops addressed three specific issues during their visits this year:

  • Co-ops asked lawmakers to support Senate Bill 1646 and House Bill 1591 that will speed the deployment of broadband by allowing co-ops to utilize existing easements for nonelectric purposes such as telecommunication services.
  • Co-ops expressed support for Senate Bill 1752 and House Bill 1773 that will elevate the charges of assaulting a utility worker and makes them consistent with penalties already in place to protect other first responders.
  • While legislation has not yet been filed, a final issue discussed was an effort by the Department of Revenue to apply sales tax to fees paid by utility consumers. Co-ops asked the General Assembly to enact legislation to protect utility consumers from these additional taxes.

“Educated and informed legislators are necessary for us to provide low-cost, reliable power, and our legislators listen when we come to visit,” said Callis. More than 100 legislative visits were made during the conference, and many legislators from across the state attended a reception honoring members of the Tennessee General Assembly.

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Tennessee electric cooperatives visit D.C. lawmakers

[WASHINGTON, D.C.] – Members from Tennessee’s electric cooperatives visited with Tennessee’s Congressional delegation on Thursday, June 23, in Washington, D.C. They joined more than 40 co-op leaders from across the state in the nation’s capital to discuss issues important to co-ops and co-op members.

“Elected representatives make decisions and pass laws that have serious consequences for Tennessee’s electric cooperatives and their members,” says David Callis, executive vice president of the Tennessee Electric Cooperative Association. “It is important that we tell the electric cooperative story and inform Members of Congress of the impact of proposed legislation.”

Co-op members discussed environmental and power supply issues with Members of Congress during their visits. “It is important that we communicate with how legislation affects rates and reliability for everyday Tennesseans,” says Callis.

The Tennessee Electric Cooperative Association is a trade group representing the interests of Tennessee’s 23 electric distribution cooperatives and the 1.1 million consumers they serve. The association publishes The Tennessee Magazine and provides legislative and support services to Tennessee’s electric cooperatives.

 

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Prevailing winds

By David Callis, executive vice-president, Tennessee Electric Cooperative Association

Despite a few high-profile scandals, I like to believe that most corporations abide by the law. Some do so because it’s the right thing to do. Others do so because of existing regulations and laws.

Along those lines, how do electric utilities respond when regulatory bodies force operational changes? If federal energy policy enacts changes that alter your strategy, sound business practice demands that you comply. Obeying the law ensures continued operation; doing the opposite invites fines, failure or possibly even incarceration.

It’s not an unusual happening in the energy industry. Our government is empowered to ensure that the economy functions well, and sound energy policy keeps the engine of industry running. Over the years, the federal government has taken action in a variety of ways: establishing and maintaining a Strategic Petroleum Reserve, restricting exports of fuels that are in short supply and even mandating that certain fuel sources be avoided.

That last point is a troubling one. Successful businesses plan for the future, doing their best to anticipate changing economic and market conditions. Most businesses plan strategically for the next two to three years; others take longer looks, three to five years and beyond, depending on their forecasting ability. In the electric utility business, routine planning for us means that we plan 20 to 30 years into the future.

The electric utility business is a very capital-intensive business. That simply means it costs a lot of money to build large electric generating plants and transformers and string wire. When you are constructing and maintaining a costly infrastructure, it requires meticulous long-term planning.

That’s particularly true for utilities such as the Tennessee Valley Authority that build facilities that generate electricity. In planning for the needs of our state and the surrounding area, TVA is currently in the midst of doing just that. Its Integrated Resource Plan (IRP) will be completed later this year.

Exploring the capital-intensive nature of our business, if a utility in, say, 1974, was planning for a 30-year future, one decision is what fuel to use. It needs to be a source that is abundantly available. The utility would make the best economic choice, taking into consideration the cost of the fuel, pollution standards and safety concerns.

What if one of those sources was taken off the table by regulators?

Around 1974, the 94th Congress passed S. 622, better known as the Energy Policy and Conservation Act. The law was signed by President Gerald Ford on Dec. 22, 1975. The official summary of the act reads: “Extends through June 30, 1977, the authority of the Administrator of the Federal Energy Administration under the Energy Supply and Environmental Coordination Act to issue orders prohibiting power plants and major fuel burning installations from using natural gas or petroleum products as fuel if they had been capable on June 22, 1974, of burning coal.” (emphasis mine)

The message delivered in 1975 was that burning natural gas is bad and burning coal is good. That’s a bit different than what we’re facing in 2014.

There were sound reasons for the decisions made in 1975, yet those decisions had consequences. We have a significant amount of coal-fired generation in this country that will be costly and difficult to replace.

Congressional action typically involves a thorough, deliberative process when setting energy policy. However, policy dictated by an agency without that process is subject to far less scrutiny.

As we’ve told you before, you have an opportunity to let your voice be heard. The Environmental Protection Agency is taking comments on its proposed Clean Power Plan until Oct. 16. TVA continues to invite comments on its IRP until Nov. 25.

Go to takeactionTN.com today and send a message. We need sensible solutions that provide for affordable and reliable power.

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Short start to a long process

By Mike Knotts, director of government affairs, Tennessee Electric Cooperative Association

Over the past year, you may have read in these pages about your local electric cooperative’s concerns about government regulations and how those regulations might affect electricity generation at new power plants that might need to be built to keep our homes cool and power our modern economy. Many of you have expressed your agreement or disagreement with my words — sometimes in colorful language — and I am appreciative of the feedback you have provided me.

Regardless of where we all may fall on the political spectrum, I think we can agree that our modern society demands a constant supply of reliable and affordable electric energy. Our world simply wouldn’t be the same without it. And the fine folks at your local co-op, for whom I work, are where “the rubber meets the road” on these important issues. It is serious and complex work.

In what is probably the most significant regulation ever proposed by an agency of the United States government, the U.S. Environmental Protection Agency (EPA) recently released a proposed rule that would limit the emissions of carbon dioxide from existing, rather than new, power plants all across America. These rules are far-reaching and unique. And since you own your co-op, you will be impacted in some way.

What the rule does

The Obama administration had previously proposed a national goal of reducing carbon emissions by 30 percent below 2005 levels by 2030. Instead of an across-the-board reduction, however, the proposed rule sets state-specific goals and creates guidelines to be used in making proposed methods to meet those goals. After approval of the rule, state governments will be required to develop detailed implementation plans that will determine what specific actions are taken to achieve the required reductions in carbon emissions. EPA will have the ability to approve or disapprove those plans.

Sources: Goals from “Clean Power Plan Proposed Rule” (p. 346-8); 2012 Emissions Rate from “Goal Computation Technical Support Document” (p. 25-6)

Sources: Goals from “Clean Power Plan Proposed Rule” (p. 346-8); 2012 Emissions Rate from “Goal Computation Technical Support Document” (p. 25-6)

There are significant differences in the requirements placed upon the states. Washington state, for instance, will be required to reduce its carbon emission rate by 76 percent while North Dakota will only be required to reduce its rate by 11 percent. Tennessee’s required reduction will be 39 percent, ranking 13th on the list of most impacted states. The accompanying chart shows the three most- and least-affected states as well as the required reductions for Tennessee and our neighboring states. It is unclear how states will be able to develop plans when a particular power plant serves customers in several states or is owned by the federal government instead of private company, as is the case for every power plant here in Tennessee.

How the rule works

Because of the nature of the rule, the nuts and bolts of what must be done to achieve the goals set by EPA won’t be clear for some time — possibly as far out as 2016. EPA set the state-by-state goals by developing a “best system of emission reductions,” and there are thousands of pages of technical details that accompany the rule and detail how these goals were set. At the time this article was authored, those details are still being evaluated, page by page. States will have several years to submit their plans to EPA for approval, and that is the point in time when the tough decisions will have to be made.

We do know, however, that this rule will force a significant number of coal-fired power plants to shut down or convert to using natural gas as fuel. We know that the rule encourages states or groups of states to implement a cap-and-trade model of carbon emission allocations. We know that in order to comply, actions will be required that are “outside the fence” of a power plant — actions like requiring utilities to implement energy-efficiency or demand-management programs. We also know that new nuclear generation will help states achieve their goals, as nuclear power does not emit any carbon into the atmosphere.

What can I do?

While it will be many years before the full scope of this plan could be implemented, there is short window of time in which the EPA will be actively soliciting comments from the public about the proposed rule. Starting with the day the rule is published in the Federal Register, there will be a 120-day comment period. As you become more educated about this rule, make your voice heard by visiting takeactionTN.com and submitting a comment to the EPA about your thoughts.

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Tennessee among states hardest hit by EPA regulations

Tennessee’s electric cooperatives call for consumers to take action.

NASHVILLE – Tennessee’s electric cooperatives express concern following the release of the U.S. Environmental Protection Agency’s proposed guidelines that will limit emissions from thousands of existing power plants, including 11 coal plants operated by the Tennessee Valley Authority.

“Estimates indicate that Tennessee will be among the hardest hit by the state requirements, calling for a 38 percent reduction in carbon dioxide emissions by 2030,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “These regulations will hurt Tennessee families, and we are just beginning to understand how severe the impacts will be.”

Tennessee has already taken significant steps to improve energy efficiency and reduce carbon emissions. “The average monthly residential energy use in Tennessee has fallen 16 percent since 2010, and TVA has reduced its carbon emissions by 30 percent since 2005,” says Callis.

“It is important that we make our voices heard. Affordable energy and a strong Tennessee economy depend on an all-of-the-above approach to energy generation.”

The EPA will hold a 120-day public comment period, and you can submit your comments to the EPA by visiting takeactionTN.com.

“The economic challenges faced by many cooperative members make it critical that EPA regulatory programs be cost effective and provide environmental benefits that exceed the implementation and compliance costs,” says Callis.

The Tennessee Electric Cooperative Association is a trade group representing the interests of Tennessee’s 23 electric distribution cooperatives and the 1.1 million rural and suburban consumers they serve. The association publishes The Tennessee Magazine and provides legislative and support services to Tennessee’s electric cooperatives. Learn more at tnelectric.org.

 

Contact:
Trent Scott | tscott@tnelectric.org | 731.608.1519

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Taking the co-op message to DC

More than 100 Tennesseans joined more than 2,500 co-op leaders from across the nation to participate in the NRECA Legislative Conference on May 4-6 in Washington, D.C. The conference provided CEOs, directors and co-op staffers with insights from Washington insiders and briefings from NRECA lobbyists to use during meetings with lawmakers.

Tennessee co-op leaders met with Senators Alexander and Corker as well as Representatives Black, Blackburn, DesJarlais, Duncan, Fincher, Fleischmann and Roe.

A number of issues important to electric co-ops were discussed during the legislative visits, including

“People will know that Co-op Nation is here,” NRECA CEO Jo Ann Emerson said at the first conference session May 5 at the Hyatt Regency Washington on Capitol Hill. “You do this because you know how important relationships are with your legislators and with your regulatory officials.”

View photos from the legislative conference here.

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The pace of change

Few issues seem more polarizing than climate change and renewable energy — even when trying to reach a level of mutual satisfaction. A point I’ve tried to make over the past few months is that you can’t effect change overnight. What I’ve discovered is that readers often interpret my comments through the prism of their own beliefs. I’m not being critical; that tends to occur when we’re passionate about an issue.

Some co-op members aren’t pleased when we voice support for coal-fired generation. One particular reader classified it as unrealistically clinging to the past. Some members aren’t pleased about our support for solar and wind power when we have abundant gas, oil and coal resources in the U.S.

Our position is not about mandating a particular power source but a call for diversity and stability. We don’t hate coal; we don’t want to wreck the environment. Our mission, quite simply, is to keep the lights on. And to do so safely and efficiently.

We make economic-based decisions grounded in reality, not partisanship. Over the years, we’ve had disagreements on energy policy with both sides of the aisle. Principled disagreement doesn’t equate with personal dislike or political opposition.

Some policy shifts are minimally disruptive. But when policy shifts dictate changing energy sources, it’s going to take a long time and a lot of money. And it’s not going to be happen overnight. For example, it can take more than a mile for a fast-moving supertanker to stop and turn around. It’s a matter of physics, not desire.

If we were to immediately shut down all of the coal plants in the U.S., it would make a negligible change in worldwide carbon dioxide levels. We’d also be in the dark. Yet, over the past several years, older coal plants have been shuttered. Huge financial investments have been made to scrub the emissions of those remaining. Investments have been made in renewable energy sources where and when it was economically wise.

Our power supplier, the Tennessee Valley Authority, has moved from having coal represent a majority of its generation to a long-term goal of a mix that is 40 percent nuclear, 20 percent coal, 20 percent natural gas and 20 percent hydropower and renewable sources.

An “all-of-the-above” energy policy isn’t just a slogan. It’s not “code” that means we don’t support renewable energy. Each power source has benefits and drawbacks. Fuel costs vary. Some sources are readily available; some are not. Any type of generation depends on transmission lines to carry the electricity from the source to your local power company. Just planning and building those lines can take years to accomplish.

The sun is free, but solar power isn’t. Wind power is a great option, but the wind does not blow in all the right places at all the right times. Nuclear power is dependable and a steady, long-term power source. It also creates long-term waste problems. Coal is a plentiful and cheap power source. Yet, as we’ve seen in the Valley, it isn’t easy to dispose of coal ash, and we have yet to master the handling of carbon dioxide. Hydropower is inexpensive, clean and totally dependent on the weather. Natural gas burns cleaner than coal, but when overused, supplies dwindle and prices increase.

As we’ve seen this past winter, there are times when all are needed.

Take your pick about which of those sources you dislike. But, if you remove it from the mix, do you have a workable plan to replace it? Changing policy is easy; making the changes required by that policy is not. As frustrating as the pace of change is for some, a change of pace on this level takes time and care.

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Not a training ground

I really missed the mark in my February column. While writing in early January that “little evidence is left of the record cold weather,” I had no doubt that winter’s cold wouldn’t last much longer. No one anticipated the Tennessee Valley Authority would set five of its top 10 record peak demands in the first few weeks of the year. Unfortunately, I was half-right: High bills continue to strain budgets throughout the region.

On those five coldest days, TVA and the local power companies generated and delivered 3,399 gigawatt-hours. Without delving into the math again (see inset), that’s enough energy to power Nashville for 10 months. Everything didn’t work to perfection, but the power stayed on. It’s quite an accomplishment to achieve once, but to meet the demand again and again is remarkable. And you don’t achieve the remarkable by accident.

Former Defense Secretary Donald Rumsfeld, when discussing the dangers troops were encountering in Iraq, created some new classifications for problems: “There are known knowns … there are known unknowns … there are also unknown unknowns.”

When you lead — whether it’s troops into battle, hikers on an outdoors excursion or utility employees keeping the current flowing — you need a certain amount of technical expertise. Good leadership also knows a thing or two about failure. It’s good to learn early what doesn’t work. Some ideas that look great on paper just don’t turn out so well.

For example, in the early 1990s, many of us in the electric utility industry were certain that fuel cells would eventually allow us to serve remote loads efficiently and inexpensively. The technology was “just a few years away.” A couple of decades later, it’s still just a few years away.

That’s just a small example of how “experts” can miss the mark. With new technologies, it becomes even more challenging. Longtime utility workers may not know that wind turbines can’t operate below certain temperatures or in extremely high wind speeds. There simply aren’t any simple answers. The steady hands at the helm of our utilities have years of seasoned experience. If there were an easier, less-expensive way to do what we do, that’s how we would be doing it.

For our nation to have a workable energy policy, we need experts with true subject-matter knowledge and a few battle scars. What we don’t need is policy designed by people who don’t know what it takes to keep the lights on.

It seems the political leaders driving our nation’s energy policy are following that path. Many simply don’t know enough about our industry to be discussing energy policy — much less drafting it.

In the utility industry, we have our share of “known knowns” and “known unknowns.” We’ve learned to work through those. But building the next century’s energy policy with “unknown unknowns?” Designing the electricity grid that powers our lives shouldn’t be a training ground.

To lean more and become part of the conversation focused on a sensible, balanced approach to the Environmental Protection Agency’s planned new rules for power plants, go to takeactionTN.com.

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NRECA Responds to EPA letter

Co-ops: Access to All Options in Energy Policy Critical to Reliability, Affordability

(ARLINGTON, VA) — Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association (NRECA), today drew attention to the important role access to all fuels plays in the reliability and affordability of electricity in America.

“We must be deliberate and purposeful with our energy policy to avoid depriving cost-conscious American families and businesses the affordable, reliable energy they count on as a basic component of everyday life. The competitiveness of the U.S. economy depends upon options when it comes to energy and the regional, economic and demographic differences demand flexibility and freedom when deciding which fuels will keep us moving forward.

“As not-for-profit organizations that serve members in 47 states, electric cooperatives recognize the necessity of a diverse fuel mix. And by leading the implementation of efficiency technologies and renewable fuels, especially in rural areas, we’re well aware that getting to a point where innovation is possible requires as strong a foundation as possible.”

The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.