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Grand Valley Power has issued a strongly worded statement opposing the cap and trade legislation working its way through Congress. In this statement, it becomes clear that the overriding mission of Grand Valley Power is to provide least-cost power to its customers without other considerations.
Grand Valley Power purchases all its power from XCEL Energy. XCEL Energy generates power from a variety of sources, with coal plants contributing over 50 percent of this mix. The mean use GVP customer, the one that uses only 750 kilowatt hours of power a month, is secondarily responsible for the combustion of 10 pounds per day of coal and the subsequent discharge of carbon dioxideinto the atmosphere.
There is an excellent analysis of the climate crisis currently on newsstands, issued by National Geographic, called “Energy for Tomorrow.”
Only diehards are continuing to deny that the 6.8 billion human inhabitants of this planet bear some responsibility for climate change. The U.S. coal industry has or will receive half a trillion dollars to start the transition to cleaner electricity, yet some power suppliers are aggressively fighting this transition. Why?
What is Grand Valley Power’s responsibility as a secondary power distributor? Should REAs hold to least-cost mission statements, without factoring in any of the end costs related to their industry? Should power producers be required to utilize carbon sequestration, coal gasification and other processes to generate cleaner electricity or be penalized for their emissions?
Is cap and trade the best possible platform of change? There are many who support a straight carbon tax as far better solution. If you want to write your congressman, that would be my recommended suggestion.
I am a customer of Grand Valley Power, as a residence and as a business. I adamantly oppose Grand Valley Power’s position on this issue.
Fred Pittenger, CEO
Simplicity Solar
Grand Junction
One Response to “Cost shouldn’t be utility’s only consideration”
Posted June 24th, 2009 at 6:12 pm Login to Send PM Report this comment
I have to disagree with you, I believe that REAs are looking out for their member owners when they seek to keep electricity costs to the lowest price possible. I think that you also have your agenda, being the owner of a solar business. I don’t discount solar or wind as renewable energy sources, however, wind and solar are NOT baseload energy, that means, 365, 24/7 electric providers, the sun does not shine half the time and the wind does not blow all of the time. One must also consider NIMBY, not in my backyard, most people for solar and wind farms are all gung ho about it until one proposes a wind or solar farm in their backyard. Renewables are a band-aid. When peak demand is present, the sun is down and solar powered systems are not producing electricity. I feel that there are enough government subsidies for you business through grants and refunds for solar. Perhaps you should run for the board of directors of GVP so you could push your agenda like those from Planet Telluride or Aspen and Vail who have been over run with the renewable crowd. It is an REAs responsibility to provide 1. Reliable power (solar is not reliable 24/7, 365) and 2. Affordable electricity (available at the lowest price possible) REAs are consumer owned, meaning they are not in it for profit to give to stakeholders, they are in it for the little guy who is a member owner of the coop. I know you think that GVP is the big bad power company who is a denier of all things rational in your mind. GVP belongs to the National Rural Electric Cooperative Association NRECA, so do all of the other REA’s in the nation! The stance that GVP is taking is no different than the 860 plus other cooperatives across the nation share. They pool their voices through the NRECA. For every letter someone writes criticizing GVP for their stance on Cap and Trade legislation, I will post the “official view” of every REA within the united states, all united with one voice via the NRECA, so here you go again…….
All electric cooperatives belong to the National Rural Electric Cooperative Association, this is what and how NRECA says will happen to electric bills when and if cap and trade legislation is imposed, this is the crux of the GVP letter:
http://www.nreca.org/PublicPolicy/issuespotlight/20090407_FullAuction.htm
Cooperatives Oppose Full Auction of Allowances Under Carbon Cap-and-Trade
Under a “Cap and Trade” approach to reducing greenhouse gases, Congress must decide how to distribute emissions allowances. Congress can choose to freely allocate allowances to the regulated community or others; it can auction all allowances to the highest bidder; or it can adopt a hybrid approach of allocating some allowances freely and auctioning the remainder.
President Obama’s FY2010 budget proposes to auction 100% of all emission allowances under a cap-and-trade climate change program that has yet to be developed.
* Consumer-owned electric cooperatives strongly oppose a 100% auction of emission allowances and urge Congress to minimize the economic impacts of climate change legislation on consumers.
Auctioning Raises Costs to Rural Electric Cooperative Consumers
Unfortunately, auctioning all allowances only serves as a backdoor, variable tax on electric cooperative consumers to raise revenue for the government. Even worse, the level of the tax would be determined by Wall Street and large multi-national energy companies who would likely be the highest bidders in any auction. Cooperatives would likely be price takers under an auction. If the government needs to raise revenue to fund important national priorities, those taxes should be set by the government and collected by the IRS, not set by Wall Street and collected by utilities.
Further, auctioning allowances is not necessary to achieve the environmental objective of a cap-and-trade plan – namely to achieve significant, long-term reductions in greenhouse gas emissions. Those reductions are achieved by the cap established in the legislation. An auction of allowances will not result in any further reductions of CO2 emissions. It won’t reduce emissions, it will only raise revenue.
Additionally, one of the main reasons given by advocates, including President Obama’s budget, for auctioning allowances to the highest bidder is to avoid giving industries “windfall profits.” However, electric cooperatives are not-for-profit, consumer-owned utilities that provide electricity to our members. As not-for-profit entities, it is by definition impossible for cooperatives to receive “windfall profits.”
Since cooperatives provide electricity on an at-cost basis, any additional costs borne by cooperatives gets passed directly through to our member-consumers. Conversely, any costs avoided save on our consumers’ monthly electric bills.
In the case of cooperatives, the most straightforward, efficient method of minimizing higher costs to our member-consumers is to freely allocate allowances to cooperatives. Co-op consumers will still face higher costs resulting from efforts to reduce emissions, and those costs will grow over time as the emissions cap declines. However, consumers can be protected from unnecessary higher costs that would result if co-ops have to bid on allowances against other for-profit entities.
Avoid the “Enronization” of any Auction
Some proposals contain explicit language allowing any entity to bid on allowances in an auction. Under this structure, rural electric cooperatives not only would be competing for allowances with large investor-owned utilities, manufacturing giants, and multi-national oil companies, but also deep-pocketed financial firms.
Investment houses and other brokers have a role to play in ensuring a liquid market, but should not be enticed to buy allowances at the auction, hold them to drive up prices, and then sell them purely to make a profit. Those profits would come directly from the pockets of consumers and would not provide any CO2 reductions.
Greenhouse gas emission allowances should not be treated as just another commodity like pork bellies. Much like how Enron manipulated the electricity markets in California in 2000, such a structure could drive up prices, promote extraordinary market volatility, and threaten the economic and energy security of the country without providing any additional environmental benefits.
* NRECA strongly urges Congress to restrict the use of allowances to only those entities which have a regulatory compliance obligation under the legislation, and clearly define the role of non-regulated actors in ensuring a liquid market.
All rural electric cooperatives, nationwide share the same feeling of cap and trade as GVP does, here is a map of the electric cooperatives nationally, the green areas are REAs (rural electric associations)
http://www.nreca.org/AboutUs/images/greenmap_with_logo.jpg
864 distribution and 66 G&T cooperatives serve:
* 42 million people in 47 states
* 18 million businesses, homes, schools, churches, farms, irrigation systems, and other establishments in 2,500 of 3,141 counties in the U.S.
* 12 percent of the nation’s population
To perform their mission, electric cooperatives:
* own assets worth $112 billion (distribution and G&T co-ops combined)
* own and maintain 2.5 million miles, or 42%, of the nation’s electric distribution lines, covering three quarters of the nation’s landmass
* deliver 10 percent of the total kilowatt hours sold in the U.S. each year
* generate nearly 5 percent of the total electricity produced in the U.S. each year
* employ 70,000 people in the U.S.
* retire $545 million in capital credits annually
* pay $1.4 billion in state and local taxes
So, this is not just a local company rattling the cage, it is truly a national issue.
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