Skip to main navigation.

December 2015 Update

I thought I would take this opportunity to update the membership on a few recent developments you might find informative. Recently I was able to attend the Associations of Missouri Electric Cooperatives  annual meeting in Branson, MO and was able to witness Attorney Chris Koster announce that Missouri will add its name to 23 other states who have filed suit against the Environmental Protection Agency regarding the Clean Power Plan. Mr. Koster has been quick to point out that Agriculture is now and will continue to be the economic engine of Missouri and the Clean Power Plan in its current form would unnecessarily and dramatically harm that energy intensive industry. On behalf of Howard Electric Cooperative, I would like to express our thanks to Mr. Koster.

I also wanted to update the membership on the impact to rates we are already seeing in regards to the Clean Power Plan. I would like to be able to say that since the EPA is absolutely going to be challenged in the courts that the energy industry would be content to take a wait and see approach, but that is not the case. The plan is so aggressive that utilities must be proactive and begin making plans to be compliant. Unfortunately this means added costs which ultimately end up being passed down to end of line users. It is estimated that the Clean Power Plan will cost Missourians an estimated $9B.

As such, we have recently been informed that our wholesale power costs (Associated Electric – where we buy the power from) will be increasing rates for 2016. It has been further conveyed that there may be more rate increases from our power suppliers in the subsequent years of 2017 through 2022. In any event, Howard Electric is resolved to supply safe, affordable and reliable energy at the lowest possible cost to you, our member owners. It’s very sad to think that the added costs we are about to begin experiencing unfortunately has relatively little to do with the operation of your utility, and more about promoting an ideology that even if implemented successfully will have minimal if any impact to the world.

I also find the timing of this event deeply troubling as the Fed interest rates are projected to have no increase for the remainder of 2015. Interest rates are typically reduced to spur investment and economic activity and they have remained too low for too long. To me, this is a clear indicator that our economy is not recovering from the recession we have seen in rural Missouri. A lack of real job growth (excluding part time workers, under-employed workers and those who have simply given up looking for work) coupled with higher energy costs, is a recipe for further economic slow-down.

A recent study sponsored by NRECA and conducted by Regional Economic Models (REMI) projects that a 10% increase in electricity price will result in the loss of 1.2 million jobs with nearly 500,000 of those lost jobs in rural areas of the country. A 25% increase would result in 2.2 million jobs lost with more than 890.000 of those occurring in rural areas. An accompanying loss of $2.8 trillion to $5.4 trillion in Gross Domestic Product (GDP) would also follow suit. Add to it that the average income for members of electric cooperatives is 11.5% less than the national average and the impact of the clean power plan is simply devastating.

Although the present outlook is very concerning, with both sides of the issue preparing for both lengthy and costly litigation, I do feel better knowing there are still some common sense leaders who abandon partisan politics to do the right thing when we need it most. I would urge all of you to send a note of thanks to Attorney General Chris Koster for demonstrating courageous leadership and for his continuing support of Rural Missouri.

Powered by Touchstone Energy Cooperatives Logo