Tempe, AZ – The threats of the U.S. Environmental Protection Agency’s proposed carbon rule to Arizona’s rural electric cooperatives have the state’s congressional delegation listening.

Staff from those offices filled the room at the Tempe headquarters of Grand Canyon State Electric Cooperative Association (GCSECA) Tuesday. Legislative Affairs and Government Relations Committee chair Patrick Ledger, who is also CEO of Arizona’s Generation and Transmission Cooperatives (AzGTs), told them the mostly-rural people and communities served by Arizona’s electric cooperatives need congressional support against the “interim rule” that would shutter all of the state’s coal-fired plants by 2020.  He said that such action would create stranded assets and massive debt, and threaten the reliability as well as the affordability of electricity for rural co-op members.  About one-third of the people who receive power from the cooperatives live at or below the federal poverty level.

“The first step is for the EPA to understand the Clean Power Plan as proposed, contrary to what they say, provides no flexibility for Arizona. It is not rational because the plan is simply not attainable without massive economic disruption, business closures, and huge rate impacts on already disadvantaged rural ratepayers,” Ledger said.

Ledger and CEOs from three other energy cooperatives met with EPA administrator Gina McCarthy earlier this month.  The meeting was productive, but what if any changes the EPA will make in favor of electric cooperatives won’t be known until the final rule is announced and that isn’t expected until mid-July at the earliest.

“We are providing EPA with alternative options that could lessen the impact here in Arizona and, I think, give us a way to achieve meaningful reductions but maintain the affordability of electricity and the reliability, which are important, especially in rural Arizona,” said Eric Massey, director of the Air Quality Division of Arizona Department of Environmental Quality (ADEQ).

AzGTs has submitted a Subcategorization Proposal that offers more feasible standards for co-ops, not-for-profit and municipal utilities.  Ledger says the proposal has very little effect on the EPA’s final reduction goals but allows remaining coal units to finish their useful life and avoids creating large amounts of debt for rural members.  Under the EPA’s current plan, Ledger says such debt would push the cost of electricity in rural Arizona to more than that of New York or San Francisco.

“That’s not an acceptable outcome,” said Tom Van Flein, chief of staff for Rep. Paul Gosar.  He questioned how the EPA has arrived at the standards it wants to apply to Arizona, which is the state hit hardest by the proposed carbon rule.

“Why is all this infrastructure that Arizonans have paid tens, if not hundreds of millions of dollars to build, being shut down for no reason?  That’s the message we’ll be taking back to D.C.” he said.

In early May, representatives of GCSECA will meet individually with Arizona congressional delegates’ policy leaders in Washington.

“We need reasonable adjustments to the carbon reduction goals in Arizona, so that we can avoid these severe economic consequences, and so that the state really does have the flexibility to develop a realistic plan—one that results in an equitable distribution of costs and impacts across the state,” Ledger said.

Arizona’s G&T Cooperatives

Arizona Electric Power Cooperative (AEPCO), Southwest Transmission Cooperative (SWTC) and Sierra Southwest Cooperative Services collectively make up Arizona’s G&T Cooperatives.

AEPCO owns and operates the 605 (combined gross) megawatt Apache Generating

Station at Cochise, Arizona, east of Benson.

SWTC owns and maintains more than 622 miles of transmission lines and 27 substations

that transmit wholesale power from the Apache Generating Station to six Member Distribution

Cooperatives in southern Arizona, northwestern Arizona in Bullhead City and Mohave County,

and Anza in California.

Combined, the Distribution Cooperatives that receive AEPCO’s wholesale power serve

more than 147,000 meters representing more than 350,000 individual residential, commercial, agricultural and industrial customers.

The six Class A Member Cooperatives that receive wholesale power from AEPCO

include five in Arizona; Sulphur Springs Valley Electric Cooperative in Willcox, Duncan Valley

Electric Cooperative in Duncan, Graham County Electric Cooperative in Pima, Trico Electric

Cooperative in Marana, Mohave Electric Cooperative in Bullhead City, and the California

member, Anza Electric Cooperative in Anza. These member cooperatives own the Arizona’s G&T Cooperatives and by extension, the G&T Cooperatives are owned by their members, the people at the end of the line who use the power.

The cooperatives are also Rural Utilities Service (RUS), a federal agency, borrowers.

The G&Ts and its member cooperatives are not-for-profit utilities.

 

The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.