WASHINGTON, Jan. 31, 2017 - National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson welcomes the Trump administration’s commitment to “eliminating” the Clean Power Plan that was designed to limit power plant carbon emissions for the first time. But the former seven-term Utah congressman also tells Agri-Pulse that he expects NRECA member co-ops to continue investing heavily in renewable energy and energy efficiency.
Matheson explains that NRECA was “the key litigant on the Clean Power Plan, to go after it because we thought it was going to add to our costs” for providing reliable and affordable electric power to NRECA’s rural member/consumers spread across 47 states.
Matheson points out that NRECA hopes the new administration will eliminate not only the CPP but many other federal regulations as well. To speed that process, he says NRECA will work with the new administration “to provide a substantive roadmap for them in their effort to unwind a number of regulations that are difficult for our co-ops.” The goal, he adds, is to give NRECA co-ops “greater flexibility to do what’s right for their member/consumers.”
Because each co-op is different, Matheson says, “as a national organization, we want an all-of-the-above strategy where any fuel can be deployed and it’s up to our individual co-ops to decide what the right fuel mix is to best provide their consumers with reliable, low-cost power.” He concludes that “taking the Clean Power Plan off the books creates more flexibility and reduces some of the uncertainty that our co-ops were facing.”
Matheson lists two primary reasons to scrap the CPP and other regulations. First, he says, “having a greater opportunity for coal to be used over a longer period of time gives our members more flexibility.” His second reason is that because power plants are very capital intensive assets, “if we get shut down right away, we’ve got expensive coal plants that haven’t been fully depreciated, so having more time to depreciate those assets is important in terms of the financial well-being of our co-ops.”
Overall, Matheson says, rolling back regulations as proposed in President Donald Trump’s new executive order Monday and in the House-passed Regulatory Accountability Act (H.R. 5) “just fits with our desire to have greater flexibility and certainty in terms of costs of fuel.”
In supporting H.R. 5, currently being considered in the Senate, Matheson explained that “Regulations like the Clean Power Plan and the Waters of the U.S. rule will complicate the electric cooperative mission to provide safe, affordable, reliable power to 42 million consumers across the nation. Overreaching federal rules can have a devastating impact on electric cooperatives and consumers throughout rural America.”
As for coal’s future, Matheson says that while the Clean Power Plan “certainly disincentivized the use of coal,” low-cost natural gas has been another major factor undermining the economics of burning coal. He expects that once the CPP is eliminated, “a number of our co-ops” will continue to rely on coal “because that’s the best resource mix for those co-ops.”
Matheson adds that transitioning away from coal, as many co-ops are, is a complex process. He warns that “when you move away from coal to use natural gas or renewables,” both individual co-ops and the nation as a whole need to answer key questions such as “do you have the adequate gas pipeline infrastructure to get the gas to where you want to generate the power, do you have the transmission infrastructure to move the power from renewables to where the load is.”
Despite that warning and NRECA’s determination to overturn Obama’s Clean Power Plan and other regulations, Matheson insists that “NRECA actually has had a very aggressive role in looking at developing technologies for reducing emissions and having cleaner opportunities for power generation from coal or any other resource.”
Matheson considers it logical to reject the CPP while at the same time investing in energy efficiency and in solar, wind, biomass, hydropower, and other renewable energy sources. He explains that rejecting the CPP while supporting renewables is the natural result of “listening to our member/consumers” and representing “that more diverse view of what America is.”
For Matheson, it’s important that individual electric co-ops retain the flexibility to generate electric power from “a diverse resource mix” that can include coal and that’s decided by local circumstances rather than a one-size-fits-all federal mandate. Yet he stresses that NRECA and its member co-ops fully support “efforts to develop new technologies to make our resource mix even cleaner.”
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Matheson sees NRECA continuing to play a leadership role in developing renewable energy and energy efficiency. “On community solar,” he notes, “we have 75 percent of all the community solar in America and we’re moving to where our own or purchased solar capacity is going to quadruple in 2017 alone . . . We have some co-ops that are 100 percent renewable right now.”
Matheson looks forward to the new Trump administration rolling back regulations and providing more flexibility for individual co-ops to decide their own energy mix based on market forces regardless of which party controls Congress.
Matheson sees it as good news that the November elections, with decisive voter turnout in rural America in favor of Donald Trump, created “an opportunity right now where rural America is rightly receiving more attention in the policy world.” He adds that “the politics are probably shifting to where the market forces are going to be the more compelling factor on the decisions that electric co-ops make.” He expects positive results to include “a reduction in the overall severity of regulation that’s directing co-ops on what to do.”
Mel Coleman, the North Arkansas Electric Cooperative CEO who will complete his two years as president of the NRECA board of directors March 1, tells Agri-Pulse that for both his Arkansas co-op serving 36,000 member accounts and NRECA as a whole, representing 42 million electricity users, “we place critical importance on all parts of our generation mix, whether it be coal, gas or non-emitting resources.”
Coleman says that for Arkansas’s 17 electric co-ops and their generation provider, the Arkansas Electric Cooperative Corporation, coal capacity is 38 percent, natural gas 47 percent, and non-emitting clean resources capacity is 15 percent. Actual electricity generation in 2016 was 56 percent from coal, 27 percent from gas, and “17 percent from our resources like wind, hydro, biomass, and solar.”
As for predicting how this generation mix is likely to change, Coleman said “I could have answered that question six or seven years ago and I would have been absolutely and totally wrong.” He is, however, certain on two points, with or without Obama’s Clean Power Plan.
- “When it comes down to whether the majority of our energy comes from gas or coal, that depends on which fuel is cheaper at the time.”
- “We will generate as much as possible from our wind, hydro, biomass, and solar because those generation resources are in place.”