Planning Our Energy Future
Co-ops Working to Keep Electric Bills Affordable
By Scott Gates
While it’s easy to take electric power for granted, that may not always be the case. Today’s economic crisis makes it all the more critical that work begins soon to address growing issues in the energy industry. Otherwise, electricity could quickly become less of an affordable staple and more of a pricey luxury.
In recent years, the collision of several factors increasing demand for electricity, rising fuel and construction costs, and climate change – has created what’s been called the energy industry’s “perfect storm.”
The U.S. Energy Information Administration (EIA) forecasts the need for electricity will climb by 30 percent between now and 2030. To meet this growth, the U.S. Department of Agriculture projects electric co-ops must double generation capacity over the next 11 years. Yet building new power plants will be expensive, so electric co-ops must turn to both cutting-edge and time-tested solutions to keeping the lights on.
“Without advancing technology, our options are limited,” says Glenn English, CEO of the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus member-owned electric co-ops.
“But whatever solutions we come to in addressing this energy crisis, we must keep consumers in mind. With many electric co-op members already working hard to make ends meet, this is no time to enact hasty energy policy that will push electric bills higher.”
Relatively high costs for construction materials and uncertainty about climate change goals have stalled development of new baseload generation.
New nuclear power plants are stymied by high costs and local political resistance in many areas. As a result, the last new reactor to become operational was a Tennessee Valley Authority (TVA) plant in 1996, according to the Nuclear Energy Institute.
In years past, the burden of meeting electric demand would typically fall to coal-fired plants, which provide about half of the nation’s electricity. But with plans for new coal plants hitting snags in just about every state, utilities are being forced to turn to natural gas, a more expensive fuel.
“The main challenge we’re facing now is that it’s hard to build new baseload generation in general, but even tougher for units that don’t burn natural gas,” remarks Paul McCurley, NRECA Chief Engineer. “The lower up-front costs, but higher operating costs of natural gas generation traditionally made it a good fuel source for peaking power —
used only when demand for electricity is at its highest — but not for baseload power plants that generate electricity around the clock.”
English says, “The resulting reliance on natural gas increases the risk of higher electric bills to consumers and lowers overall reliability due to decreasing fuel diversity. Unfortunately, the question no longer is whether electric bills will increase, but just how high they will go.”
In an effort to broaden limited options and make bills more affordable, electric co-ops have come to embrace the concept of a multi-pronged solution spelled out by the Electric Power Research Institute (EPRI), a non-profit, utility-sponsored consortium whose members include electric co-ops. With heavy focus on research and development, an array of yet-to-be-developed and existing technologies could keep affordable electricity flowing between now and 2030, while significantly reducing carbon dioxide emissions.
Steps to achieving that diverse solution include:
Fortunately, electric co-ops have a long tradition of promoting energy efficiency. “The vast majority of electric co-ops, a full 92 percent, already sponsor energy efficiency education programs, and 77 percent offer residential energy audits to their consumers,” explains Ed Torrero, executive director of NRECA’s Cooperative Research Network.
Electric co-ops are also pioneers in load management programs, which allow them to reduce power consumption during peak demand periods.
For example, Shelby Electric Cooperative, Shelbyville, Ill., provides residential members with a very unique load management option. By combining the co-op’s automated metering reading system (AMR) and whole-house standby generators, members can sign up for a lower rate and have backup power anytime the power goes off. The co-op can remotely turn off power to the meter through the AMR system during peak demand periods. This triggers the generator to automatically kick in just like it would during a power outage.
For every 100 members that buy the generators and agree to the interruptible rate, Shelby Electric gains about 1 MW in load management capability. That has the potential of saving the co-op and all its members $50,000 a year in power costs.
“Our goal is to get 10 percent of our members signed up for interruptible power,” says Jim Coleman, President/CEO of Shelby Electric.
Noting that load management acts like “a power plant in reverse,” Torrero indicates roughly 37 percent of all co-ops can directly control appliances, chiefly water heaters and air conditioners.
“Few realize how well electric cooperatives have done in this area,” Torrero says.
Between energy efficiency and load management efforts, local electric co-ops reduced demand by 2,200 MW in 2006 — roughly the equivalent of three large coal-fired power plants, according to EIA. That added up to $50 million in fuel cost savings and offset more than 2,000 tons of carbon dioxide emissions, equal to what 700 cars put out in a year.
A lot more work remains and it needs to start quickly. This year, some parts of the country could experience a very real shortage of power unless more power plants are built, according to a late 2008 report by the North American Electric Reliability Corporation, a Princeton, N.J.-based non-profit organization charged with monitoring America’s power system reliability.
What can you do? In addition to participating in load control programs at your co-op and following energy saving suggestions from co-op efficiency experts, English points to the electric co-op grassroots awareness campaign Our Energy, Our Future™. It’s an important part of the co-ops’ nationwide effort to involve consumer-members in solving the nation’s energy crisis. You simply need to visit www.ourenergy.coop to get involved.
“By creating a dialogue between consumers and elected officials about our collective energy future, we build the foundation for a working partnership in which government understands and can help meet the needs of cooperative members,” English says. “Though co-ops are taking steps to deal with this impending crisis through energy efficiency and demand-response programs, serious policy decisions are ahead of us — the root problems are certainly not going away.”
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