Everything listed under: Policy

  • The power of the grassroots

    Battle-hardened warriors: That’s one way to describe the huge grassroots army of electric cooperative members who have helped us ensure electricity remains affordable and reliable in Missouri. And that army includes many of you.

    My favorite events put on by Missouri’s electric cooperatives are the two legislative conferences — one in Jefferson City and the other in Washington, D.C. — that bring some of this army together to talk issues with our elected officials. I always leave those gatherings feeling confident about the future of electric cooperatives due to the warm welcome from legislators.

    Their feelings toward us reflect the fact that electric cooperatives exist not to make a profit but to provide a service. Also, every elected official representing Missourians knows that electric cooperatives are governed by the members themselves.

    When you throw in the strong support from hundreds of thousands of electric cooperative members like you, Co-op Nation is a force to be reckoned with in the political arena. Even urban legislators who don’t represent a lot of electric cooperative members welcome us on our visits. They want to get the rural perspective as they work to make balanced decisions for our state and nation.

    This year, our political involvement appears to be even more important than ever. Those who attended the state legislative conference were given a lengthy update on issues we are following in the statehouse.

    Of the 1,734 bills filed as this issue goes to press, we are watching more than 300 and paying extremely close attention to 75. Our objective, as always, is to ensure electric cooperative members are treated fairly in any new legislation. When a proposed bill or initiative petition would benefit a special-interest group at the expense of our members, we are quick to expose the flaws to our elected officials.

    Our attention to federal legislation is equally important. Over the years, we have come to you for help on a number of issues crucial to our continued ability to provide low-cost electricity, and your response has made all the difference. The 600,000 cards and emails you sent helped us fight off costly cap-and-trade legislation. More recently, you flooded the Environmental Protection Agency with 300,000-plus comments on its Clean Power Plan.

    And your tens of thousands of comments let Attorney General Chris Koster know he had strong support when he joined 28 other states in suing EPA over its Clean Power Plan.

    I am pleased to report that, even though EPA ignored your comments, the U.S. Supreme Court voted to stay this costly plan. This is great news for all consumers.

    Had this stay not been granted, electric cooperatives would have been forced to take costly and irreversible steps to comply with this rule. We would have spent your money to make changes to meet regulations that could later be thrown out by the courts.

    The plan singled out Missouri and other low-cost electricity states with rules that would have crippled our lowest-cost power generation resource.

    While the Clean Power Plan cannot go into effect until the courts make a final ruling on its legality, the battle isn’t over. You can be confident your electric cooperative will stay close to what happens in federal court. As soon as the rulings are handed down, we will communicate what happened and how it will impact you.

    Our work in the legislative arena is done on your behalf, and our success would not be possible without your support. Thanks to everyone who spoke up on these weighty issues.

  • Missouri’s Electric Cooperatives and Net Metering

    Most of Missouri’s Electric Cooperative Member-Owners have a fairly simple rate structure made up of two parts: a member charge and a kilowatt hour charge. The member charge is a fixed amount and the kilowatt hour charge varies based on the number of kilowatt hours you use during the month.

    The member charge helps your Cooperative recover a small part of the fixed distribution costs of serving you, including expenses such as administration, operations, and maintenance. However, the majority of revenue needed to cover your Cooperative’s distribution costs comes from your bill’s kilowatt hour charge.

    Your kilowatt hour charge is made up of three parts — energy (kilowatt hour), demand (kilowatt), and distribution system expenses — which are shown proportionally in the graph below.

    • Energy: The operational costs, including fuel and labor, of generating electricity
    • Demand: The overhead costs of owning and maintaining transmission and generating facilities
    • Distribution Expenses: Administration, operations, maintenance, depreciation, interest, and margins

    Missouri Net Metering
    Net metering is a process that enables Missouri’s Electric Cooperative Member-Owners with a solar or wind system on their home or business to export power that is in excess of their immediate on-site needs. This offsets an equal amount of power supplied by your Cooperative at a different time within the same monthly billing period. In this situation the Member-Owner with a solar or wind system is billed at your Cooperative’s regular retail rate for the “net” amount of power used that is in excess of power the Member-Owner generates on site.

    If the Member-Owner generates more power than his or her home uses during the monthly billing period, the excess is metered and put out onto the electric grid. Your Cooperative subtracts the amount of power purchased from the grid from the amount generated out to the grid and provides the Member-Owner with a “credit” for the “net excess” power. For most Missouri Electric Cooperatives, the credit is calculated by multiplying the number of “net excess” kilowatt hours by your Cooperative’s cost to purchase the fuel needed to generate a kilowatt hour (called avoided cost).

    Member Solar Panels Generate to the Grid: 1,000 kWhs
    Member Receives from the Grid: 950 kWhs
    Member Receives Avoided Cost Credit for: 50 kWhs

    Under current net metering laws, your Cooperative is not able to recover distribution expenses and demand costs through kilowatt hour sales when a Member-Owner installs a solar array or wind turbine. Those distribution expenses and demand costs are spread to your Cooperative’s membership without wind or solar to maintain vital infrastructure: distribution lines, poles and equipment, and the transmission network and power plants that deliver 24/7 electricity to all Member-Owners.

    Why are those other resources needed? The energy output from a solar array or wind turbine does not typically coincide with your Cooperative’s peak load: early in the morning on a cold winter day. That is why a diverse power supply including coal and gas is so important. The chart below shows that replacing your Cooperative’s existing baseload resources with 5,000 megawatts of wind or solar leaves a huge gap between what Member-Owners need to power their homes and what wind and solar would provide on a peak winter day.

    Expanding Current Net Metering Laws Would Negatively Impact Member-Owners
    Renewable interest groups and solar vendors would like to see significant changes made to Missouri’s current net metering statutes. Those changes would increase subsidies paid by Missouri’s Electric Cooperative Member-Owners who don’t have wind or solar. Key points of their suggested changes are listed below:

    Increase System Size: Currently, Missouri law limits net metering to systems of 100 kilowatts or less. These groups would like to increase the size to 500 kilowatts or less. This would allow businesses to put in larger arrays that generate more electricity, reducing the kilowatt hours they purchase from your Cooperative. This would shift more costs to the rest of your Cooperative’s Member-Owners.

    Retail Rate Credits for Net ExcessPaying the retail rate for a kilowatt hour unfairly shifts costs onto your Cooperative’s Member-Owners who do not have a solar or wind system. It also forces your Cooperative to pay a higher cost to purchase power than it would incur with its own generators.

    Annualized Net Metering Billing: This has the same effect as paying retail for any net excess. Annualizing the net metering account would carry the monthly net excess forward as kilowatt hours at a retail rate, not a credit for kilowatt hours at avoided cost.

    State Income Tax Credit: Solar and wind systems are already heavily subsidized with a 30 percent federal income tax credit and current net metering laws. Renewable interest groups have encouraged implementing a Missouri state tax credit that would mean more subsidies and that would cause additional burden on Missouri taxpayers. This could lead to state tax increases to comply with Missouri’s balanced budget requirement.

    Learn More
    Learn more about Missouri’s Electric Cooperatives, and how we work to provide safe, efficient energy to rural Missouri by following us on Facebook, Twitter, YouTube, and Instagram.

  • Unfair Cost Shifting in Net Metering Policies

    Net metering policies have been in effect since the 1980s, but not all of those policies still make sense today. Keep reading to learn what net metering is, and to find out how net metering might be costing your family more than you should have to pay for your home’s electricity.

    What is Net Metering?
    Net metering is a billing arrangement between a utility company or nonprofit Electric Cooperative and a smaller power producer (like the Watt Family, who has installed solar panels on their roof).

    The solar energy the Watt Family generates is used to power their home. Sometimes they’re even able to create even more energy than they need. When that happens, they can send their extra energy back to the Cooperative to be shared with the coop’s other Member-Owners.

    The net metering billing arrangement between the Watt Family and the Cooperative decides how the Watt Family will be credited for the excess energy it sends back to the power company. This is dictated in part by state and federal legal requirements. 

    What is a Net Meter?
    The net meter itself is a tool that tracks exactly how much energy the Watt Family is using from the coop’s power sources and exactly how much solar energy the Watts are sending back to the coop after powering their own home.

    Net metering started out with good intentions: it was designed as a simple way to track energy sharing by smaller energy producers like the Watts. While net meters are still fine, the policies surrounding net metering don’t always makes sense today.

    Why Net Metering Policies Don’t Make Sense Today
    Under current net metering legal regulations, your Cooperative may have to pay small producers like the Watt Family retail price for the wholesale electricity they add back to the power grid.

    When that happens, your Cooperative incurs costs that it cannot recoup. Your Cooperative has to shift some of that cost on to you, its member-owners, in your monthly electric bills.

    Unfair Cost Shifting
    If your local grocery store had to pay farmers retail prices for eggs, milk, or meat, your grocery bills would get a lot more expensive. That wouldn’t be fair to you, the shopper, right?

    Electrical power is no different. If your Cooperative is required by law to pay small power producers like the Watt Family retail prices for their wholesale power production, your electricity bill gets more expensive. That’s not fair to you, the Member-Owner, and that’s why we call it unfair cost shifting — because you shouldn’t have to pay the price of independent renewable energy production by other Member-Owners in your community.

    Member-Owners Cannot Afford to Foot the Bill
    A large majority of Missouri Electric Cooperatives' Member-Owners live on fixed incomes or low wages and cannot afford to install renewable energy systems. These Member-Owners need reliable, affordable electricity for their homes without any fancy bells or whistles.

    These fixed- or lower-income Member-Owners don’t have access to alternative energy sources like solar panels or wind energy because they simply cannot afford the installation costs. If they have to pay higher rates to subsidize those members who do have the ability to install renewable energy sources, it creates a system imbalance.

    Equity in Electricity
    Your Cooperative appreciates — and sometimes needs — the extra electric power that small producers like the Watt Family add back to the grid. The goal is to fairly reward families like the Watts for producing extra power without unfairly shifting the cost of renewable energy production on to the majority of our Member-Owners.

    Your Cooperative’s Principles make us stewards for our entire communities, which means that we must advocate for policies that make sense for all of our Member-Owners. Come back to the blog to learn more about policy options that encourage renewable energy creation without unfairly shifting its cost on the member-owners who can least afford it.

    Learn More
    Learn more about Missouri’s Electric Cooperatives, and how we work to provide safe, efficient energy to rural Missouri by following us on Facebook, Twitter, YouTube, and Instagram.