US report says a Green New Deal must help electric co-ops switch to renewables

‘With the clock ticking on climate change, rural electric co-operative leadership, clean energy advocates, and rural communities can build a coalition to address multiple concerns’

As more and more electric co-ops across the USA signal a growing interest in renewable energy, a report has called for a new programme to transition rural economies to clean power.

The document, Rural Electrification 2.0, says: “The US public is increasingly demanding clean energy to pursue energy independence and reduce greenhouse gas emissions.

“As the price of renewables​ has dropped, investments in new clean energy generation have accelerated. Generation from solar and wind is expected to grow by 6% and 14% respectively in 2019.

“Maintaining flexibility in energy resources is key to controlling costs as the US shifts to carbon-free energy.”

Written by Erik Hatlestad, CURE (Clean Up the River Environment Minnesota); Katie Rock, Center for Rural Affairs; and Liz Veazey, of Omaha non-profit We Own It, the report says electric co-ops currently source 67% of their energy from fossils – despite “providing the infrastructure for a clean energy future through transmission lines, wind turbines, and utility-scale solar”.

It says the falling cost of renewables have removed a barrier to switching to renewables.

“A 2018 report from Rocky Mountain Institute shows Tri-State Generation and Transmission Association, which includes 43 electric co-operatives and public power districts in Colorado, Nebraska, New Mexico, and Wyoming, could save at least $600m by 2030 and reduce their risk by using their coal plants less and investing in more renewable energy,” it says.

But electric co-ops still face the problem of their financial commitments to the coal power stations which supply them – which has seen some forced to buy their way out of contracts.

“Rural communities could better pursue a clean energy future if current debt on existing coal plant infrastructure could be eliminated in exchange for a requirement to invest in clean energy and energy efficiency,” says the report.

“Such a deal would incentivise the retirement of existing coal plants. These investments would help rural communities transition to energy independence and clean energy, but it could also provide cost savings through energy efficiency upgrades.

“Instead, incoming cash from ratepayers is being used to pay off debts from old, uneconomic coal plant infrastructure. By being relieved of these debt-laden​ assets, co-operatives would have more resources to invest in clean energy, although there is a need to ensure that member-owners see economic benefits of these policies.”

It says this goal can be met through federal regulatory action, debt bailouts, credit asset swaps, securitisation or refinancing via the Rural Utilities Service, part of the US Department of Agriculture.

Such mechanisms would form part of a Green New Deal, inspired by Roosevelt administration’s New Deal programmes which brought electrification and electricity co-ops to communities hit by the Great Depression of the 1930s.

Robust discussion around these issues could produce other solutions, it adds, and also find ways to help coal-producing communities hit by the transition away from fossils.

“Rural communities and the electric co-operatives that serve them are at risk from both the consequences of climate change and a rapidly changing energy economy,” it concludes.

“For rural places to simultaneously mitigate the impacts of climate change, keep utility rates low, and transform their economic future, electric cooperatives must transition to clean energy.

“With the clock ticking on climate change, rural electric co-operative leadership, clean energy advocates, and rural communities can build a coalition to address multiple concerns that impact every corner of rural, suburban, and urban America.”

On his website Clean Cooperative, Colorado industry expert Joe Smyth notes that coal debt restructuring and the clean energy transition for electric co-ops has been raised as an issue by two Democratic hopefuls in the presidential primaries.

Beto O’Rourke’s climate plan includes increased financing through the Rural Utilities Service, while Jay Inslee has proposed debt relief for co-ops’ stranded coal plants as part of a Next-Generation Rural Electrification plan,” he writes.