LMRE GM takes aim at Clean Power Plan
Lorain-Medina Rural Electric Cooperative General Manager Markus Bryant took aim at President Obama’s Clean Power Plan (CPP) at the LMRE annual meeting in July at the Lorain County Fairgrounds in Wellington.
Bryant said the Environmental Protection Agency’s (EPA) CPP is “bad public policy” and is “all pain for no gain.”
In his annual address to the membership, Bryant said the cooperative’s mission is to provide reliable electric service, a superior customer experience, and innovative energy solutions.
“Keeping electric rates competitive is our greatest challenge, especially given that the president of the United States is on record as stating that his plan is to bankrupt any utility that burns coal to generate electricity.”
He said the Ohio cooperatives are grateful for the U.S. Supreme Court’s stay last winter of the CPP. The stay means the EPA has no authority to enforce the CPP until after the rule has been decided by the courts. A decision from the Washington, D.C., appeals court is expected this fall.
“We’re a little nervous because part of the 5-4 vote included Justice Scalia, who recently died,” Bryant said. “This election is going to tell a lot how this plan is going to go. We will see how all this mess plays out in Congress, the federal courts, and especially in this year’s presidential election, where we have one candidate who wants to throw out the Clean Power Plan and one who wants to keep it and has stated publicly she wants to put coal companies out of business and coal miners out of work.”
Bryant said the CPP is a threat to rate stability. He said the market has shifted greatly since Ohio electric cooperatives and Buckeye Power, their wholesale power supplier, made the decision more than 10 years ago to invest more than $1 billion to upgrade their coal-fired power plant with emissions-control equipment. At the time, natural gas rates were three to five times more than today.
Today, power production is cleaner than ever, Bryant said. The government’s goal is to reduce carbon dioxide emissions from 2005 levels by 30 percent by 2030. Without any federal regulations, Bryant said, carbon dioxide emissions are down nearly 20 percent over the past decade as the country transitions to a greater reliance on natural gas and renewable energy. In 2016, for the first time, the U.S. will produce more electricity with natural gas than coal, as coal production has declined from 50 percent in 2005 to 33 percent this year.
Bryant predicts natural gas costs will rise. “There are enough gas plants being built, and costs will rise due to supply and demand. Cheap gas is going to go away, and supply and demand will equalize, and that will result in higher prices at some point.
“Our co-op’s philosophy is reliable and stably priced electricity. That’s one of the reasons we have stayed with coal. In the long run, we believe coal, if properly scrubbed and pollution equipment installed, is a more stable priced fuel while gas traditionally is much more volatile in price and consequently risky.
“This is, frankly, bad public policy,” Bryant said, referring to the CPP. “These EPA regulations far exceed anything Congress permits in the clean-air laws. This is why we’re involved with Buckeye Power and our national association in lawsuits and are pleased with the Supreme Court’s stay.
“We know this plan costs too much for any results that it promises. We estimate it will affect U.S. electricity rates by at least 20 percent and, per the EPA’s own methodology, will only reduce CO2 (carbon dioxide) levels in the atmosphere less than 1 percent, reduce temperatures less than .016 degrees Fahrenheit, and sea-level rise less than 1/100th of an inch, or less than the width of three sheets of paper. It’s all pain for no gain.”
Bryant said the cooperative’s ongoing challenge is to keep rates affordable and still maintain
LMRE’s electric lines, especially with little growth in members since 2007.
“We need to invest about
$3 million a year in the system to maintain the quality of our electric service. The good news is about 60 percent of our major power lines are new since 2000.”
The cooperative has looked for opportunities to save. It took advantage of lower interest rates by refinancing $8.5 million in mortgage loans. Over the remaining life of these loans the cooperative will save about $2.2 million in interest, Bryant said.
He said the innovative shared management and services arrangement with North Central Electric Cooperative in Attica saves LMRE more than $800,000 per year, which has allowed the cooperative to invest in advanced technology to improve the reliability of its electric system.