AUGUST 13, 2010

The long-running FutureGen project began a new chapter last week, as U.S. Department of Energy (DOE) Secretary Steven Chu announced plans for a re-envisioned “FutureGen 2.0.” The carbon capture and storage (CCS) demonstration project, first announced in 2003 but shelved after five years due to escalating costs, has received $1 billion in Recovery Act funding, a new site plan and fresh opposition from key players.

FutureGen 2.0 will retrofit an existing Ameren Corp. coal- and oil-fired power plant in Meredosia, Ill., according to Chu. The resulting 200-mw oxy-combustion plant would burn coal with pure oxygen instead of air, and capture carbon dioxide emissions for transport and storage 150 miles east in Coles County, Ill.

Coles County—specifically Mattoon, Ill.—was selected as the site for the original incarnation of the project, which would have tested CCS technology at a 275-mw, integrated gasification combined-cycle coal plant built from scratch. The revamped FutureGen 2.0 plant would pipe more than 1 million tons of carbon dioxide to Mattoon for storage every year, according to DOE.

But on Wednesday, following a request for feedback from project supporter Sen. Richard Durbin (D-Ill.), Coles County officials rejected its role in the revised project. “A number of communities throughout the state” have expressed interest in playing a role, according to a response from Durbin.

AUGUST 6, 2010

New to NRCO | Prairie Power, Inc., a Jacksonville, Ill.-based G&T, recently joined the National Renewables Cooperative Organization (NRCO) as its 25th member cooperative. Carmel, Ind.-based NRCO was formed in 2008 by power supply cooperatives in order to develop and deploy renewable energy resources for members. In joining NRCO, Prairie Power plans to further diversify its power supply portfolio—currently strong in coal-, oil- and natural gas-fired generation. NRCO, a not-for-profit cooperative, receives financial support from its members. Each commits $100,000 with an upfront investment of $25,000. CFC joined the organization as an associate member in July 2009.

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Energy Policy Primer | A group of 19 elected legislators from 17 states has released a guide highlighting future energy challenges and state-level policy options. “Meeting the Energy Challenges of the Future: A Guide for Policymakers” was developed by a task force of the National Conference of State Legislators over the past year. The guide provides an overview of the nation’s electric infrastructure; reviews how policy plays a role in regulating it; explores various energy resources and their costs; and summarizes policy options for addressing a wide range of energy issues. The task force consulted Basin Electric Power Cooperative, Bismarck, N.D., NRECA and others in preparing the report, available online at www.ncsl.org.

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Climate Change in Court | A group of five electric utilities filed a petition with the U.S. Supreme Court this week, asking for a review of an appeals court decision they fear could allow judges to set caps on greenhouse gas emissions. In 2009, the U.S. Court of Appeals for the 2nd Circuit ruled against the group—American Electric Power, Duke Energy, Southern Company, Xcel Energy and the Tennessee Valley Authority—in favor of eight states and New York City, according to Platts. The ruling found the plaintiffs could pursue nuisance claims over alleged harm to human health and property from climate change resulting from power plant emissions.

JULY 23, 2010

Better service reliability and lower monthly bills led to an increase in the satisfaction level of residential electric utility customers this year, according to J.D. Power & Associates’ annual satisfaction study, released last week. Several electric cooperatives scored strongly in the study and received high satisfaction rankings.

Overall customer satisfaction averaged 630 on a 1,000-point scale in this year’s study, increasing from 618 in 2009. Customer-reported bill amounts decreased by 5 percent from 2009, and power reliability improved, with service interruptions falling by 8 percent.

“Utility companies are continuing to improve when it comes to managing customer expectations around power outages and restoration of service,” said Jeff Conklin, senior director of the Energy and Utility Practice at J.D. Power. “Even though outages can have a negative impact on satisfaction, utility providers who manage these incidents properly—by providing sufficiently detailed information about the outage and restoring power when they say they will—may be able to mitigate declines, or even improve satisfaction.”

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JULY 2, 2010

By John Grant, Senior Consultant, CFC Financial Advisory Services

Consumer growth rates for electric cooperatives have steadily declined since early 2007, although recent data from the U.S. Energy Information Administration (EIA) show the rate of decline may be slowing.

Electric cooperatives’ average growth (representing the number of meters added) has historically hovered between 2 percent and 2.5 percent per year, according to EIA data, typically around 1 percentage point higher than investor-owned and municipal utilities (see “Co-op Growth Rate Exceeds Industry,” Solutions News Bulletin, June 5, 2009). EIA data (taken from a sample of 104 electric cooperatives) show growth slightly higher than figures from the more reliable CFC Key Ratio Trend Analysis (KRTA), although EIA data are an important leading indicator nonetheless. Recent data point to two emerging patterns:

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JUNE 11, 2010

CFC Corporate Counsel James Jablonski addressed the Distribution Cooperative Attorneys’ Seminar in Little Rock, Ark., on May 27, discussing ethics issues related to internal investigations of employee or corporate misconduct.

The annual legal seminar, sponsored by the Arkansas statewide association, covered a range of regulatory, legislative and ratemaking issues. Jablonski outlined several potential triggers that could prompt an internal investigation of misconduct, including allegations by whistleblowers, self discovery, government inquiries, auditor allegations and media reports. Read More »

JUNE 11, 2010

More than 100,000 residents of the Old Dominion were welcomed as new members of two electric cooperatives last week, following a joint acquisition of the Virginia distribution assets of Greensburg, Pa.-based Allegheny Energy, a multi-state investor-owned utility (IOU).

Rappahannock Electric Cooperative (REC), Fredericksburg, Va., joined Shenandoah Valley Electric Cooperative (SVEC), Mt. Crawford, Va., in purchasing Potomac Edison Co., a subsidiary of Allegheny Energy, on June 1. The move is the largest acquisition of an IOU made by electric cooperatives.

“The switchover from Potomac Edison service to cooperative service on Tuesday was smooth and uneventful,” said Myron Rummel, SVEC president and CEO. “Our new member/owners in the acquired territory woke up to alarm clocks, lights and coffee makers powered by the same safe, reliable electricity they used to power their lamps, computers and televisions the night before.” Read More »

JUNE 11, 2010

Electric cooperatives can build a strong future by leveraging time-tested values, CFC Governor and CEO Sheldon C. Petersen stressed in opening CFC Forum 2010. More than 900 electric cooperative managers, directors and staff gathered in Philadelphia for the event, held June 7-9.

Sheldon C. Petersen

With the theme “Proven Values, New Beginnings” the Forum focused on leadership, the economy and finding success in an uncertain energy environment, as Petersen outlined in his opening remarks.

“Our focus on the electric utility industry includes financial leadership. Electric cooperatives have provided strong financial leadership for decades,” Petersen said. “Since the co-ops’ very inception, co-ops have been recognized as well-managed and financially sound institutions.

Petersen pointed to preliminary results of CFC’s 2009 Key Ratio Trend Analysis (KRTA) as an indicator of electric cooperatives’ strength, noting that cooperative leaders are making the right decisions—though sometimes tough ones—in hard economic times (see “Preliminary 2009 KRTA Results Reflect Co-ops’ Financial Strength,” Solutions News Bulletin, April 23, 2010).

CFC’s third-quarter financial results also were highlighted as a strength. Petersen stressed the importance of cooperative independence in uncertain times and the freedom to face hard choices with non-governmental solutions at hand. CFC’s founding in 1969 was born of that very logic. Read More »

MAY 14, 2010

In celebration of the 75th anniversary of the creation of the Rural Electric Administration, CFC Forum 2010 will host a special panel discussion that brings together five administrators of the USDA’s Rural Utilities Service.

Moderated by CFC Governor and CEO Sheldon C. Petersen, “Electric Cooperatives: Lessons from the Past, Insight for the Future” features an unprecedented panel that spans 16 years of leadership at RUS. The current and former administrators will reflect on the rich heritage of what has been called the most successful social program in the history of the United States. They will share their unique insight on electric cooperatives, the history of the network and the lessons learned that can be applied today for a brighter future.

Administrators scheduled to attend:

Jonathan Adelstein (2009–Present)	James M. Andrew (2005–2009)	Hilda G. Legg (2001–2005)
Christopher A. McLean (1999–2001)	Wally Beyer (1993–1999)

MAY 14, 2010

The U.S. Department of Energy (DOE) recently awarded $15.8 million in federal stimulus funds to New Hampshire Electric Cooperative, Plymouth, NH, for installation of smart grid technology. The grant covers about 45 percent of the $35.5 million cost of replacing the cooperative’s existing metering and communications system with advanced metering infrastructure (AMI), including new meters for each of the cooperative’s 83,000 members, associated two-way communications equipment, and sensors and controls. The new system will provide near real-time information on electric use.

Fred Anderson

“This grant gives us the opportunity to modernize our distribution and metering system in a way that will empower our members to understand and better manage their use of electricity,” said Fred Anderson, NHEC president and CEO. “It will also help us respond to outages more quickly and efficiently. For the first time, we will know down to the individual meter where outages are occurring.”

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APRIL 30, 2010

Last week, Norris Electric Cooperative (NEC), a distribution system headquartered in Newton, Ill., and G&T Southern Illinois Power Cooperative (SIPC) announced plans to enter into a wholesale power agreement when NEC’s current contract with Ameren Energy Marketing, a subsidiary of IOU Ameren Energy Corp., ends in December 2012.

The cooperatives, which had been in discussions since May 2009, said they will complete the required contract documents in the coming weeks with service scheduled to begin January 1, 2013. Until then, NEC will continue to be served by Ameren. The new wholesale power arrangement gives NEC the option of converting to SIPC membership any time in the first several years of the contract. The contract also includes additional services to assist NEC in some of its operations going forward.

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