Lee McLaughlin, Paul Sigurdson and Marty Dahl, all co-op officials from North Dakota, had a big job to do on the second day of the NRECA Legislative Conference.

Rep. Bob Latta discusses energy policy with leaders from Georgia co-ops. (Photo By: Luis Gomez Photos)

McLaughlin and Sigurdson, board directors of Nodak Electric Co-op, Grand Forks, and Dahl, general manager of McLean Electric Co-op, Garrison, were tasked with educating members of Congress who have a short history with electric co-ops about key issues.

ECT.coop caught up with the men while they were waiting in a long security line outside the Longworth House Office Building, which houses the office of freshman lawmaker Rep. Rick Berg, R-N.D.

Later that day, they were scheduled to meet with members of Congress from Connecticut, which has no electric co-ops.

While Berg is likely no stranger to electric co-ops (“If you run for office in North Dakota, you know who we are,” said Sigurdson), some education, co-op-style, is in order, the men said. “He’s got to be educated,” Sigurdson said.

At the top of the agenda for the North Dakotans—and for the some 2,500 co-op leaders in Washington, D.C., for the annual conference—were issues relating to captive rail; comparable incentives for renewable generation; funding for the Rural Utilities Service; and regulation of coal ash.  Read more

Flexibility is an indispensible characteristic of a federal clean energy standard, co-op leaders emphasized at a May 2 forum. Co-ops need to be at the table, with a unified position, as a standard is drafted, they added.

Forum participants (l-r) Anthony Ahern, Keven Groenewold and Kellie Donnelly listen to an audience member’s question on clean energy standards. (Photo By: Luis Gomez Photos)

Keven Groenewold, executive vice president and general manager of the New Mexico Rural Electric Cooperative Association, and Anthony Ahern, president/CEO of Buckeye Power and Ohio Rural Electric Cooperatives, spoke during NRECA’s 2011 Legislative Conference in Washington, D.C.

They are members of a committee established by NRECA CEO Glenn English to develop an industry position on the CES.

The debate stems from President Obama’s proposal, which lacked much definition, that 80 percent of U.S. electricity be required to come from clean energy technologies by 2035.

Groenewold described the clean energy standard as perhaps “the next progression in the energy debate” after the unsuccessful effort to enact cap and trade legislation. It is essential that the standard not represent “a repackaging of cap and trade under a different name,” he underscored.

Ahern noted that a CES must be mindful of the nation’s need for “affordable, reliable electricity.” Success will rely on a “soft approach”—flexibility—in the early years, he said.

According to Groenewold, the NRECA committee’s current focus is answering questions posed by the Senate Energy and Natural Resources Committee in a clean energy standards white paper. “We hope to put together something that keeps the co-op family unified and take that proposal to Capitol Hill,” he reported.

NRECA’s comments on the committee document included opposition to a one-size-fits-all federal policy. The association supported an “expansive” roster of qualifying clean energy resources, and a small utility threshold that exempts all distribution cooperatives by updating the 4 million megawatt hour exemption in past legislation.

Forum participant Kellie Donnelly, deputy chief counsel for Senate Energy and Natural Resources’s Republicans, said the white paper was an attempt to fill out the administration’s sparingly detailed CES proposal. It had drawn about 250 responses, well above the expected 150, and staff is still reviewing them, she said.

“Members don’t think we can pass a big comprehensive energy bill this year,” nor that a CES should be the linchpin of such a bill, she reported.

Whatever legislative path is taken, “to protect our interests, it is imperative that co-ops be engaged,” emphasized forum moderator Montee Wynn, NRECA senior principal and counsel, government relations. “This may be the most important energy policy of the next 10 to 15 years.”

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When a major financial overhaul bill was signed last year, the goal was to avoid a repeat of the meltdown from which the nation is still recovering. But because of the way it was written, certain things were left for regulators to interpret. And depending on how that goes, electric co-ops could be facing some burdensome new requirements.

NRECA’s Russ Wasson said the association is working to protect co-ops from unduly burdensome regulations. (Photo By: Luis Gomez Photos)

“What we’re really looking at here is the largest regulatory effort in the history of the United States,” Russ Wasson, NRECA director of tax, finance and accounting policy, said of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

At the heart of the matter for electric co-ops is what new derivatives regulations will mean. Through derivatives, co-ops and other utilities can lock in the price of electricity, natural gas and other fuels for certain periods of time.

“The goal is to protect consumers from price volatility and help stabilize and keep affordable energy costs,” said Julie Barkemeyer of NRECA’s government relations staff, who joined Wasson at a May 2 forum during the association’s Legislative Conference.

But now the Commodity Futures Trading Commission has new regulatory authority, including over energy swaps. So NRECA has joined two coalitions in an effort to preserve the over-the-counter derivatives market for energy end-users and to protect members from increased costs of regulation.

Since September, NRECA has written 20 comment letters to the CFTC, which is not used to dealing with co-ops. “Since the CFTC did not define what it considers to be a ‘swap,’ they have forced us into a defensive position of having to comment before we know if the issues apply to us or not,” Wasson said.

“It’s really a gargantuan undertaking, and I just want you to know we’re doing the best we can to try to protect you from unduly burdensome regulations,” Wasson told co-op leaders. “We had no fault in creating the financial crisis, and we pose no systemic risk to the financial system whatsoever.”

Barkemeyer agreed. “Rural electric cooperatives are not banks, and did not cause the financial crisis,” she said, “and we believe they should not be regulated as such.”

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Getting managers, employees, board members and consumers involved in ACRE® is a smart move for electric co-ops, participants at a 2011 NRECA Legislative Conference Forum were told. And they heard from two co-ops on how to go about it.

Bruce Carlson of Verendrye EC urged other co-ops to get consumer-members involved in ACRE. (Photo By: Luis Gomez Photos)

“We believe that an informed membership is a strong membership,” Bruce Carlson, general manager of Verendrye Electric Cooperative, said at the May 2 session.

He called annual meetings the “premier communications opportunity” for every co-op—and an ideal place to encourage members to join ACRE, the Action Committee for Rural Electrification.

Carlson speaks from experience. Nearly 2 percent of Velva, N.D.-based Verendrye’s membership belongs to ACRE. The co-op even allows ACRE membership fees to be added to monthly electric bills—an idea Carlson challenged the audience to take home.

“OK, directors, you’ve got to step up to the plate,” Carlson said. “You’ve got to have enough guts to say, ‘I believe strongly enough in this program.’ ”

A solid ACRE membership has already helped Verendrye. The co-op sells 20 percent of its kilowatt-hours to the U.S. Air Force at Minot Air Force Base, which has survived numerous military realignments that saw other facilities shuttered. Carlson said his ACRE grassroots membership always contacts its congressman to make its feelings known. He called it “a huge, huge, huge success story.”

In North Carolina, Jay Rouse travels the state with a rallying cry of his own. The director of government affairs at North Carolina EMC, Rouse wants to see full ACRE participation. He told CEOs in the audience it all starts with them.

“You’ve got to put your support behind it. I think it makes a huge difference,” Rouse said.

About 80 percent of the state’s co-op employees are in ACRE. “I’m quite proud of that. We want to get to 100 percent. We’re not going to quit until we get close to it,” Rouse said.

“When you see the board of a co-op and the management of a co-op get behind the program, it does succeed.”

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When James E. Clyburn was first elected to the House of Representatives in 1992, his wife insisted that he keep two things in mind in his new job—veterans and Berkeley Electric Cooperative.

Surrounded by co-op leaders from South Carolina (c), Rep. James Clyburn, D-S.C., displays the NRECA Distinguished Service Award. (Photo By: Luis Gomez Photos)

Clyburn, D-S.C., did more than just think about those subjects. He has been a strong backer of veterans’ programs, and, for his support of electric co-ops, he received the NRECA Distinguished Service Award for 2011.

“I know that rural America depends upon this movement, and not just for what it has done in the past,” Clyburn said as he accepted the award May 2 at the 2011 NRECA Legislative Conference.

Clyburn’s wife grew up in the territory of Berkeley Electric Co-op, Moncks Corner, S.C., while they now are members of Tri-County Electric Co-op, St. Matthews, S.C.

In 2010, Clyburn sponsored the Rural Energy Savings Program Act, known as Rural Star, which would enable co-ops or a statewide group of co-ops to obtain zero-interest loans from the Rural Utilities Service for energy-efficiency microloans to members.

He plans to renew that effort in the new Congress, calling Rural Star one of the most important pieces of energy legislation for co-ops and the country.

“I’m going to be one happy fellow when the signature of the president is placed on Rural Star,” he said.

Clyburn also has been a staunch advocate for co-ops on issues such as pension reform, Rural Utilities Service funding and exemptions for small utilities in legislation.

“This gentleman truly understands the cooperative difference and he makes a difference for electric cooperatives,” said Michael Couick, president and CEO of The Electric Cooperatives of South Carolina.

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NRECA CEO Glenn English told co-op leaders from across the country that they must stay focused on policies to maintain a reliable and affordable supply of electricity, and avoid being drawn into an unproductive and divisive congressional debate on fiscal and budgetary issues.

NRECA CEO Glenn English addresses the 2011 NRECA Legislative Conference in Washington, D.C. (Photo By: Luis Gomez Photos)

Speaking to the annual Legislative Conference in Washington, D.C., English said co-op managers, directors and staffers need to keep co-op-related issues, such as funding for the Rural Utilities Service and incentives for renewable energy generation, front and center when they meet this week with members of Congress.

Straying off co-op themes by weighing in on the highly charged issues of federal spending cuts and an increase in the debt ceiling is outside the mission of co-op leaders and represents a “no-win situation,” he told about 2,500 conference participants at the Hyatt Regency Capitol Hill.

“That’s for Congress to decide. That’s not our area of expertise,” he said. “We’ve got to avoid the temptation to choose sides. The stakes are too great. The only side we’re on is the side of our 42 million members.”

The conference brought together co-op managers, directors and officials May 2-4 for a series of briefings from NRECA lobbyists before one-on-one meetings with congressmen, senators and their staffers.

“We’re doing this in an atmosphere that’s increasingly challenging,” said Kirk Johnson, NRECA senior vice president of government relations. “But we have a good story to tell.”

The conference zeroed in on four issue areas that NRECA representatives said will require minimal spending, but could dramatically affect whether members’ monthly bills remain affordable or take a sharp upward turn.

Participants were urged to lobby members of Congress on behalf of a $6.5 billion level for fiscal 2012 for the Rural Utilities Service Electric Loan Program, so that the cost of co-op borrowing, which affects electric rates, remains reasonable.

English noted that the program does not represent a net loss to the U.S. Treasury and could return an estimated $100 million to federal coffers. “If they cut RUS, they’re going to be increasing the deficit, not reducing it,” he said. 

Sorting through a wave of pending Environmental Protection Agency regulations leads to an inescapable conclusion: Electric co-ops could be facing major cost and compliance challenges during the next few years.

John Cassady and Jennifer Taylor of NRECA brief a Legislative Conference forum on environmental issues. (Photo By: Luis Gomez Photos)

That was the focus of an environmental issues briefing May 2 at the 2011 NRECA Legislative Conference.

John Cassady, NRECA senior principal, legislative advocacy, and Jennifer Taylor, NRECA environmental policy representative, said EPA continues to move on multiple regulatory fronts.

“We still have to remain engaged. We still have to be at the table, which we will do,” Cassady told forum participants at the Hyatt Regency Capitol Hill.

Among the potentially costly actions is whether EPA will classify coal combustion residuals, or coal ash, as a hazardous waste. That would subject coal-based utilities to a new round of regulations.

Cassady said co-ops have been very active in urging EPA to pursue a non-hazardous waste designation as part of the rule, which is expected to be finalized in 2012.

“There is a lot of bipartisan support for pulling back EPA from doing something that would end the beneficial use of coal ash,” he said.

Additionally, EPA’s plan to regulate hazardous air pollutants such as mercury, announced in March, contains a compressed time frame and could require utilities to install expensive emissions control equipment or even shut down some coal plants, Taylor said.

NRECA is concerned that the regulations “may be unachievable and may not attain any significant or commensurate environmental benefit,” she said.

Other regulations addressed at the forum included rules that affect small emergency generators, pesticide applications used in vegetation management programs, and regulation of greenhouse gases.

A bill to preempt EPA regulation of greenhouse gases under the Clean Air Act passed the House but is stalled in the Senate, Cassady said. Because of that deadlock, lawmakers might try other legislative or budgetary tactics to affect EPA’s actions, he added.

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As part of the 2011 NRECA Legislative Conference,which runs May 2-4, electric co-op leaders will be calling on members of Congress and their staffs.

As in 2010, participants in the NRECA Legislative Conference have a busy agenda. (Photo By: Luis Gomez Photos)

During these visits, they will be asking elected officials for action on four key issues:

RUS Electric Loan Program. NRECA is urging Congress to support a $6.5 billion loan level for the Rural Utilities Service Electric Loan Program. The association noted that the program will actually earn the federal government more than $100 million in fiscal 2012.

Coal ash. NRECA supports H.R. 1391, the Recycling Coal Combustion Residuals Accessibility Act of 2011. Sponsored by Rep. David McKinley, R-W.Va., the bill would mandate that coal ash be treated as non-hazardous waste by the Environmental Protection Agency.

Clean Renewable Energy Bonds (CREBs). NRECA favors an extension of the CREBs program, or creation of other cost-effective incentives that can help make renewable energy more affordable for consumer-members. CREBs provide co-ops and municipal systems with incentives similar to those enjoyed by IOUs for investments in renewable energy.

Captive shippers. NRECA supports S. 49, the Railroad Antitrust Enforcement Act, championed by Sen. Herb Kohl, D-Wis. The bill would end the antitrust exemption currently enjoyed by freight railroads, making it easier for co-ops and other shippers to bring court challenges to anticompetitive practices.

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Electric co-op leaders from across the country will converge on Capitol Hill May 2 to 4 for the 2011 NRECA Legislative Conference.

Visiting with lawmakers is a key part of the Legislative Conference. Last year, New Mexico co-op leaders met with Sen. Jeff Bingaman, D-N.M. (Photo By: Luis Gomez Photos)

“Given the current mood in the nation, and the near-singular focus of lawmakers on federal deficit and budget issues, we have some significant work to do get our key priorities in front of Congress,” said NRECA CEO Glenn English. “It is important that our voice be heard and that issues promoting affordable energy remain on the agenda in Congress.”

When co-op leaders visit the offices of their congressmen and senators, one of the items they will be discussing is the Rural Utilities Service Electric Loan Program. The program is a moneymaker for the federal government, with expectations that it will earn in excess of $100 million in fiscal 2012. Lawmakers will be asked to support the program at a $6.5 billion loan level.

Co-ops will also be seeking an extension of the Clean Renewable Energy Bond program. CREBs, as it’s known, provides co-ops and municipal utilities with incentives to invest in renewable energy, similar to incentives available to investor-owned utilities.

Other key issues at this year’s legislative conference include support for a bill that would end the immunity from antitrust laws currently enjoyed by railroads, and backing for a bill that would ensure that coal ash is not federally regulated as hazardous waste.

Along with meetings in the halls of Congress, the conference will include two briefing sessions, May 2 and May 3, at the Hyatt Regency Capitol Hill.

There will also be four issue forums on May 2. The issues to be discussed include: stringent rules being developed by the Environmental Protection Agency; a White House plan for an 80 percent clean energy standard by 2035; what last year’s Wall Street reform legislation and upcoming regulations governing derivatives mean for co-ops; and a briefing from the Action Committee for Rural Electrification, or ACRE®.

Rep. Allen Boyd has been presented with NRECA’s 2010 Distinguished Service Award in recognition of the “support and political tenacity” with which the Florida Democrat has advanced the work of electric cooperatives throughout his career on Capitol Hill.

Allen Boyd

The award, the electric cooperative industry’s top recognition for sustained contributions to its consumer cause, was presented by Florida co-ops on May 5, during NRECA’s 2010 Legislative Conference.

In a letter notifying Boyd of his selection, NRECA CEO Glenn English, a 1994 Distinguished Service Award recipient, cited the congressman’s “strong leadership role” in the Blue Dog Coalition, a group of conservative House Democrats.

Many of the group’s positions, including its stance during the House debate on climate change legislation and “wise role” in the House health care debate, are critical to electric cooperative communities, English said..

The CEO’s letter also commended Boyd, a member of the House Appropriations and Budget committees, for longstanding support for the Rural Utilities Service loan program and championing of the Agriculture Department’s Bond Guarantee/Rural Economic Development Loan and Grant program.

The congressman was a lead co-sponsor of the letter to House appropriators asking for $6.5 billion in loan levels for the RUS program, and for no additional restrictions on RUS lending to co-ops.

“These programs are not well known or understood,” English noted. “They cost the federal government nearly nothing, but yet they constantly get challenged.”

Therefore, the honoree’s understanding of electric co-ops’ focus on consumers and the industry’s not-for-profit mission is critical, the CEO emphasized.

“We deeply appreciate your willingness to step out on behalf of the 42 million consumers served by electric cooperatives over the years,” English added.

While meeting with the Florida co-ops to accept the award, Boyd reflected on his long-time association with the electric cooperative program in the state.

“They provide rural consumers with immediate assistance at the drop of a hat and personal attention when you need it most, he noted. “I believe in the cooperative model and am a very happy and satisfied rural electric consumer.”

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