Senate Agriculture Committee Issues Testimony From Arkansas Electric Cooperative President Hasten
- Jun 23, 2022 2:56 pm GMT
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On behalf of the Electric Cooperatives of
My name is
Also, I am grateful to be here to share the community-focused perspective of the nearly 900 electric cooperatives across the country. Electric cooperatives deliver power to 1 in 8 Americans in 48 states and 56 percent of the nation's landscape. We are owned by the people we serve, and we operate with a focus on people, not profits. Together, electric cooperatives share in the mission to provide reliable, affordable energy to rural America.
As the Committee considers the upcoming Farm Bill, there are three key points we respectfully request you consider as you work to reauthorize
* Recent warnings regarding grid reliability should be taken seriously and policymakers should approach energy policy with a primary focus on electric reliability.
* As higher than normal inflation persists, co-ops are advocating for policies to keep energy costs down for rural Americans.
Reliable Electricity in
Electric cooperatives are committed to keeping the lights on across rural America at a cost that families can afford. As we look to the future, we worry that federal and state policies, as well as market changes, are causing an imbalance of electric supply and demand that jeopardizes our ability to fulfill this commitment. In May, the 2022 Summer Reliability Assessment released by the
A concerning pattern is forming in which baseload generation is prematurely retired and then replaced primarily by intermittent generation like wind and solar. While these renewable sources of power are important components of responsibly delivering electricity to our member-owners, they have fundamentally different characteristics than the always-available, dispatchable sources we use for baseload generation. Meeting the needs of our members and maintaining high levels of reliability while increasing levels of intermittent wind and solar generation, will require an even greater focus on supporting baseload energy sources such as natural gas, coal, and nuclear energy.
To be clear, this is not about prioritizing one energy source over another. Our focus is whether we will have the diverse tools needed to keep the lights on for American families and businesses. The Electric Cooperatives of
Rural Utilities Service (RUS) Certainty
It would be difficult to overstate the importance of low-cost
Working to Reduce Costs for Rural Americans at the End of the Line
Last year, AECC's revenue surpassed
In rural America, like other places, the cost of everyday needs has increased over the last year. Our goal as electric cooperatives is to be the exception for our member-owners in times like these and provide predictable, affordable electric rates. This is a constant challenge as many of the rural communities we serve have just a few households per mile compared to other utilities serving more densely populated areas with 30 to 40 households per mile.
Repricing High-Interest RUS Loans
Comparable Federal Incentives for Energy Innovation
As non-profit businesses, electric cooperatives do not have access to the same energy innovation tax incentives as for-profit businesses which hinders our ability to implement innovative technologies. Many newer, cleaner technologies are attractive to rural utilities. We serve the areas where you are most likely to see expansive solar farms or clusters of wind turbines; however, we are handcuffed by the tax code and the significant capital expenses required to deploy innovative technologies.
Electric cooperatives should have access to the same incentives as our for-profit industry peers. Currently, to reap any of the federal incentives for clean energy investments, from renewables and energy storage to carbon capture and advanced nuclear, cooperatives must contract with third parties eligible to capture the tax incentives. This process is burdensome, expensive, and can carry risk. Ultimately it raises the risk and cost for cooperatives and supplants non-profit cooperatives from building and operating these technologies with for profit companies that ultimately raises the cost for rural Americans. If cooperatives had comparable incentives and could receive the full value of the tax credits through a direct payment, we could more aggressively pursue development of emerging energy source asset development.
Rural Energy Savings Program (RESP)
Created by the 2014 Farm Bill, RESP is a program for rural energy providers to finance energy efficiency upgrades in rural homes through zero interest loans from
RESP projects can be large undertakings for cooperatives. The administrative resources needed to oversee the retrofitting of a significant number of rural homes can be a barrier for some cooperatives. Especially, considering electric cooperatives serve 92% of the persistent poverty counties in America. As the Committee considers reauthorization of this program, consideration of adding a grant component of the program, like similar programs at
Electric Cooperatives Expanding Rural Broadband
Broadband access remains a top priority for many rural electric cooperatives as well. From supporting our farmers and ranchers as they utilize more precision agriculture technology, to ensuring that rural schools and businesses aren't left behind, a reliable, high-speed broadband connection is essential for modern life.
In response to growing demand, several electric cooperatives began deploying fiber to their members, drawing similarities in the need for an internet connection to when electricity was needed in rural areas back in the 1930s. Today, 14 of
Beyond just an internet connection, this fiber network will also support ongoing efforts to increase the reliability, sustainability, and safety of the electric grid. Electric cooperatives across the state deploy automated metering systems, energy efficiency and demand response programs, and grid monitoring systems that require real-time communication for electric utility management. By leveraging these smart grid features,
Both RUS electric program loans as well as ReConnect provide tools that cooperatives can use to continue the important work of deploying fiber broadband connections to rural Americans, while supporting the reliability, operational efficiency, and functionality of the electric grid. As
Rural Economic Development Loan and Grant Program (REDL&G)
Owned by the communities that we serve, electric cooperatives have a vested interest in the success and safety of our people and places. Programs like REDL&G allow for us to stretch our reach in the community with benefits beyond electrification. Through REDL&G, cooperatives identify certain community needs and opportunities like public services or small businesses and partner with the
Rural Energy for America Program (REAP)
The Rural Energy for America Program (REAP) provides loans and grants to develop renewable energy systems and implement energy efficiency measures to benefit rural economies. Electric cooperatives have used REAP grants to partially finance community solar projects. We encourage you to continue to provide robust funding for the REAP program in the next Farm Bill.
In closing, I would like to thank the Chair and Ranking Member for the opportunity to share the perspective of the Electric Cooperatives of
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Original text here: https://www.agriculture.senate.gov/download/farm-bill/testimony-hasten
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