Transcript Client Report Title

Our Energy, Our Future:
A Dialogue with America
Mobilizing 40 million electric cooperative consumers to ask their
elected representatives tough questions about the future of energy.
Types of Utilities
• The REC’s are member-owned. Many of our members are
Farm Bureau members. We serve primarily in the rural areas
and our density (number of services per mile of line) is only
2.7. Avg. Iowa REC has over $17,000 invested per mile of
line.
• One member, one vote – members elect the directors
• Assign margins to the members in the form of patronage
• As we discuss the positions we are advocating today, we
want to stress that we are looking out for the interests of our
member-owners. We have no other priority. Providing an
adequate, reliable, safe & environmentally responsible source
of power at the lowest possible cost, is our primary objective.
Types of Utilities
• Municipals are public power
systems that many of the
smaller communities in Iowa
own and operate
• Density of municipals is
typically much higher than
the REC’s
• Investor Owned – (IOU’s)
• Owned by the shareholders
• Much larger systems than
REC’s and municipals
• Significantly higher density
than the REC’s – often over
30 services per mile of line
• One of the IAEC’s 37 member
RECs
• Consolidated organization
• O’Brien County REC and
Sioux Electric Cooperative
consolidated operations in
1993 to form North West REC
• January, 1998 – Plymouth
Electric Cooperative, Ida
County REC and North West
REC consolidated
Power Supply Update
• Power supply costs account
for 65 percent of the typical
REC’s total operating
expenses.
• Hydro – a valuable
renewable and no carbon
resource – accounts for
approximately 25 percent of
NWREC’s power supply.
• Nuclear is another no carbon
resource that some of the
state’s RECs have in their
power supply portfolio mix.
Power Suppliers Supporting
Wind Energy Development
• Wind energy also is an
important renewable and
no carbon resource that
has been used by the RECs
and will play an even
bigger role in the future
(Example – Iowa Lakes
wind project).
• Important to be aware that
wind needs to be backed up
with another resource such
as coal or natural gas.
Green Pricing Programs
• All of the generation and
transmission electric
cooperatives and their
member RECs offer green
pricing programs.
• Our program is called Prairie
Winds.
• The cost is ½ cent per KWh
and was 3 cents when the
program began in 2001.
• Have promoted the program
for seven years, but get little
participation from the
members – less than 1
percent.
Coal is still the predominant resource for us.
Importance of Coal Generation
• Coal is most abundant nonforeign source of fuel for making
electricity.
• It is becoming more challenging to get new coal plants
approved (Example – Sutherland plant near Marshalltown).
• Technology continues to improve.
• We need to continue to build new coal plants to ensure a
reliable and affordable source of electricity so the nation can
compete in the global marketplace.
• Federal leadership is needed – Congress and the next
President need to adequately fund research and development
of new technology that will enable the capture and
sequestration of C02.
Projected Wholesale Costs for New Coal Plant
9
8
7
6
5
4
3
2
1
0
Cents per KWh
9 - 10
6.0
3
Cents per KWh
Coal
New Coal New Coal
w/o C02
with C02
Capture & Capture &
Storage
Storage
Our Current Energy Situation
• The atmosphere around energy policy is politically
charged as polarized positions dominate the debate.
• Today, Americans are sensitive to global climate
issues.
• The availability of affordable, reliable power has never
been more in doubt.
• There is a leadership vacuum in the energy debate—
finding a balance in meeting energy needs and climate
goals must be a priority.
The Current Political Landscape
• The presidential election is setting the agenda with
climate change issues.
• Special interest groups are continually lobbying
Congress on energy and climate change issues.
• We are concerned that the voice of the consumer is not
being heard.
Challenges Ahead
• Address the issue of greenhouse gases.
• Increase generating capacity by 30 percent to keep up
with projected demand over the next 20 years.
• Prevent the possibility of an electricity shortage, which
could be here as soon as 2011 in some parts of
America.
• Keep electricity affordable.
U.S Capacity Margins Decline…
18%
16.6%
15.6%
16%
14.6%
14.1%
13.4%
14%
12.6%
11.6%
12%
10.8%
9.9%
10%
9.4%
8%
6%
4%
2%
0%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Capacity Margins include planned resources (summer) and demand-side
management (but not uncommitted resources)
Source: NERC 2007 Long-Term Reliability Assessment (ES&D database)
Load/Resource Balance
Deficit
Surplus
2020
2010
2004
Existing
Resources
Can We Act Fast Enough?
“We’re very close to the edge. We operate under
tight conditions more often than ever. We need
action in the next year or two to start on the path
to having enough electricity 10 years from now.”
--Rick Sergel, CEO of NERC, LA Times Jan. 18, 2008
• What is NERC?
The North American Electric Reliability Corporation is a non-profit, self-regulatory
organization whose mission is to ensure that the bulk power system in North
America is reliable. It is subject to direct oversight by the U.S. Federal Energy
Regulatory Commission.
Some Would Argue That We Don’t Need To
Build Anymore New Baseload Generation
• They believe through energy efficiency/conservation
and by building more renewable energy, that new
baseload generation won’t be needed.
• We strongly support an increased emphasis on energy
efficiency and renewables, but we don’t believe it’s
realistic that we won’t have to build new generation.
• How would this adversely impact the continued growth
of Value Added Agriculture if we didn’t have an
adequate supply of electric power?
NWREC’s Sales Are Increasing Significantly –
Primarily Due to Value Added Ag Loads
600000000
500000000
400000000
Historical
Projected
300000000
200000000
100000000
0
1999
2001
2003
2005
2007
2009
Ethanol
Projects Like Bison Renewable Energy
Dairy Expansion
Poultry, Cattle and Pork Production
To Be Successful We Need to Do It All
To meet future demand we must:
• Restrain the rate of demand growth through energy
efficiency,
• Increase energy generation from renewable energy sources,
• Increase our reliance on nuclear energy,
• Make our current coal-fired plants more efficient,
• Figure out how to capture and store carbon dioxide from
power plants,
• Bring plug-in hybrid electric vehicles to market, and
• Improve the viability of consumer-generated energy.
Each of Us Has a Role to Play In…
• Influencing this debate – U.S. climate change policy
may be voted on or even passed soon after the new
administration and new Congress begin their work in
2009. The Lieberman-Warner bill, which would have
caused significant electric rate increases, did not pass
– but it’s likely new legislation will be proposed early
next year.
• Making sure elected representatives remember their
obligations to protect the public’s interest in
maintaining affordable, reliable electricity.
What We Need…
• Leadership and sustained commitment by Congress
• Public-private partnerships
• Partnerships with groups like Farm Bureau
• Our 40 million members/consumers in one unified
voice demanding legislators strike a balance between
our electricity needs and climate change goals
We Need True Leadership
• The New Deal
o President Roosevelt set the goal of electrifying rural America, bringing the
benefit of electric light and modern conveniences to the entire nation.
• The Apollo Program
o To ensure U.S. supremacy in space, President Kennedy committed all
necessary U.S. talent and resources to putting a man on the moon.
• Climate Change Policy
o If addressing climate change becomes the great mission of our
generation, then lawmakers must do more than issue arbitrary emissions
reduction targets for some future date—they must address the tough
questions and build consensus.
Overview
Divider Slide
Our Energy, Our Future:
A Dialogue with America
www.ourenergy.coop
Our Energy Our Future –
Campaign Perspective
• Electric Cooperatives have a direct stake in the outcome.
• Electric Cooperatives are well positioned to lead the debate
about our energy needs and influence opinion.
• Electric Cooperatives are community leaders serving 40
million member/consumers, and that engenders credibility
and political clout.
• The time is right and the time is now for this campaign to
educate consumers and get them involved, talking to their
elected representatives – later will be too late.
Core of the Campaign
• Our campaign is about keeping the lights on and
electricity affordable.
• We are facilitating a consumer movement for a
balanced responsible energy future as Congress sets
climate change goals.
• We are speaking for consumers not special interests.
Objective
• Bring co-op members/owners and their elected
officials together to talk about what needs to be done
to ensure a reliable and affordable supply of electricity
Join the Campaign
Key Questions for Elected Officials
• Ask your elected officials the following questions:
o Experts say that our nation’s growing electricity needs will soon
go well beyond what renewables, conservation and efficiency can
provide. What is your plan to make sure we have the electricity
we’ll need in the future?
o What are you doing to fully fund the research required to make
emissions-free electric plants an affordable reality?
o Balancing electricity needs and environmental goals will be
difficult. How much is all this going to increase my electric bill and
what will you do to make it affordable?
We would appreciate your support
• We believe it’s important for Farm Bureau
to be aware of the seriousness of this
issue.
• We have many of the same members and
it would be good for the members of both
organizations to hear a similar message.
• Any support Farm Bureau could give us
through your Resolutions process and in
communicating with our legislators, would
be appreciated.
• As an example - is this a topic that could
be highlighted in your Iowa Minute
program?
To Be Successful & To Keep Electric Rates
Affordable, We Need to Do It All
• Restrain the rate of demand growth through energy
efficiency.
• Increase energy generation from renewable energy sources.
• Increase our reliance on nuclear energy.
• Make our current coal-fired plants more efficient.
• Figure out how to capture and store carbon dioxide from
power plants so we can continue to build new coal
generation.
• Bring plug-in hybrid electric vehicles to market.
• Improve the viability of consumer-generated energy.
The Bottom Line
• To effectively address the nation’s energy issues and to
keep electricity affordable, we need a balanced
approach that includes diverse fuel sources – including
renewables - for generating electricity plus energy
efficiency and research to develop new carbon free
energy technologies.
For additional information on this issue . . .
• Basin Electric has a website –
www.findabettersolution.com
• NRECA’s web site – www.ourenergy.coop
We Are Asking our Members to Join
the Campaign
www.ourenergy.coop
We would like to Partner with you in the
energy debate
• Many of your members also are our members.
• The outcome of the energy debate will be very
important to all of our members.
• We believe we can both be more effective in
participating in this debate and having an impact on
the outcome, if we coordinate our messages as much
as possible.
Thank you for the Opportunity to present
this information to your Committee
• Please contact us if you have any questions or are
interested in receiving additional information
• Tim Coonan, IAEC
[email protected]
800-798-7037
• Brian Kading, IAEC
[email protected]
800-798-7037
• Lyle Korver, North West REC
800-383-0476
[email protected]
Questions?