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9/2/2015
Affordable electricity is America’s economic lifeline, and no one knows this better than your electric power association.
Electric power associations in Mississippi are not-for-profit, consumer-owned cooperatives, created for the purpose of providing members (their customers) with electricity at the lowest cost possible. It is a business model that has worked well for Mississippians for more than 80 years.
The National Rural Electric Cooperative Association (NRECA) recently released a new economic study linking higher electricity prices to job losses. Given that electric cooperatives were founded on the premise that affordable electric service translates into economic growth—something sorely needed in rural Mississippi—the study results came as no surprise to us. But still, it’s sobering to see the actual numbers.
The study, “Affordable Electricity: Rural America’s Economic Lifeline,” measures the impact of a 10 and a 25 percent electric price increase on jobs and the nation’s gross domestic product (GDP) from 2020 to 2040.
The study found that a 10 percent increase in electricity prices would result in the loss of 1.2 million jobs in this country in 2021. Nearly a half-million of those jobs are in the rural areas of the country.
The impact of a 25 percent increase would cause the loss of 2.2 million jobs in 2021, with more than 890,000 of those occurring in rural areas.
What could cause these electricity price increases? For one, federal regulations such as the Environmental Protection Agency’s Clean Power Plan. This plan could threaten our safe, affordable and reliable power if regulators and policymakers do not consider the impact of their actions on rural Americans—those who can least afford it. The average income for households served by electric cooperatives is 11.5 percent less than the national average, according to NRECA.
Previous NRECA research projected that electricity bills would increase by an average of 10 percent as a result of the Clean Power Plan.
The goal of the plan is to cut greenhouse gas emissions from coal-fired power plants by certain target dates and to encourage greater use of new renewable energy. We support these goals, but they must be achieved without causing undue hardships on consumers.
This is an extremely complex plan that NRECA is still analyzing. The organization, which represents more than 900 electric cooperatives in 47 states, is concerned the rule will cause price increases for consumers, premature closures of power plants and possibly affect the reliability of the power grid.
Right now the United States does not have the infrastructure needed to handle a significant, sudden increase in renewable energy and natural gas to switch from coal. Renewables account for about 13 percent of U.S. electric power generation, according to the Energy Information Administration.
You, as a user of electricity, have a very real stake in the outcome of the Clean Power Plan. We don’t have all the answers yet but rest assured we are closely monitoring all developments, federal and otherwise, that could potentially impact your quality or cost of service.
