Georgia Magazine - July 2011 - (Page 16)

SPECIAL ENERGY REPORT BY RE MAGAZINE AND BILL VERNER, GEORGIA ELECTRIC MEMBERSHIP CORP. Co-ops urge Congress to support vital RUS loan program W hile the energy policy debate pal electric systems are able to issue cause interest paid to bond owners is not taxed. The cost of this subsidy appears to be on the back burn- tax-exempt bonds.” er, a major concern for electric According to the Congressional in 2003 (the last year available) was co-ops involves maintaining a vital Research Service and NRECA, a com- $909 million, or $55 per consumer. “In short, RUS electric loans do source of capital through the Rural parison of electric utilities shows: Utilities Service (RUS). Georgia’s co- • Consumer-owned electric co-ops not cost taxpayers a single penny,” op leaders acknowledge and support serve an average of 7 consumers English comments. “Coupled with efforts in the 112th Congress to exer- per mile of line and receive annual strong and innovative management cise ﬁscal restraint to deal with our revenues of $10,565 per mile of line. and local governance, electric conation’s deﬁcit and debt crisis, but we Based on current interest rates, RUS operatives have used RUS ﬁnancing urge our elected representatives to loans actually make money for the to keep electric rates affordable—an ensure that all types of utilities (co- U.S. Treasury—approximately $63 important consideration since houseops, municipal and investor-owned) million over the past two years and hold incomes in co-op service territories are 14 percent lower than the are treated equitably in any compre- more than $100 million in 2012. national average.” hensive budget reform. With electric co-ops anFor 75 years, the nation’s ‘In short, RUS electric loans do ticipating $66.1 billion in capital 900-plus, member-owned, notneeds over the next ﬁve years for-proﬁt electric cooperatives not cost taxpayers a single and $140.8 billion over the next have worked hard to improve the decade to update aging infrarural quality of life. Today, elecpenny [which means the structure, connect new consumtric co-ops generate, transmit and distribute electricity to 18 million annual cost per consumer for ers, and build needed power plants, gutting a time-tested loan homes, businesses, industries, this vital program is $0.00].’ program that doesn’t cost the retail centers, schools, churches, government any money simply farms, airports and irrigation sys—Glenn English, CEO, National Rural Electric makes no sense, English says. tems in 47 states, serving 42 milCooperative Association “Unfortunately, due to decilion total consumers. sions made by the White House To date, according to the National Rural Electric Cooperative • Stockholder-owned IOUs average Ofﬁce of Management and Budget Association (NRECA), electric co-ops 35 customers per mile of line and in 2007, RUS is currently prevented have invested more than $140 billion collect $62,665 in revenue per mile from making loans for coal, natural to construct critical facilities spanning of line. Most IOUs include presumed gas, or nuclear baseload genera75 percent of the United States, in- federal tax liabilities in electric rates. tion. The Obama administration has cluding 66,000 miles of bulk trans- However, tax breaks available since sought to extend RUS lending remission lines and 2.5 million miles 1987 (investment tax credits and ac- strictions to intermediate and peakof distribution lines—42 percent of celerated depreciation) allow IOUs ing natural gas-ﬁred generation and the nation’s total. Co-ops also gener- to retain and defer most of the taxes power plant environmental upgrades ate roughly 5 percent of all electric- collected, a total of roughly $94 bil- as well. Taken together, these moves ity produced domestically, provide 10 lion to date—essentially an “interest- would limit RUS electric loans to only percent of all kilowatt-hours sold, em- free loan.” At a cost to the govern- renewable energy systems, transmisploy more than 70,000, and pay more ment of $3.8 billion in 2009 (the last sion, distribution, and carbon capthan $1.4 billion annually in state and year available), this federal subsidy ture projects at existing coal- and local taxes. The federal government’s for IOUs works out to about $38 per natural gas-burning power plants. Yet federal subsidies for all types of RUS loan program has been essential customer. to building this infrastructure. • Publicly owned municipal elec- generation continue to ﬂow to IOUs “Federal assistance for electric tric systems average 47 consumers and municipal utilities,” he says. To learn how you can make your utilities is not unique,” NRECA CEO per mile of line and reap $86,302 in Glenn English stresses. “For-proﬁt, in- revenue per mile of line. The federal voice heard on energy policy decisions vestor-owned utilities [IOUs] receive government loses revenue when mu- before Congress, go to www.OurEn tax breaks, while city-owned munici- nicipals issue tax-exempt bonds be- ergy.coop. More online at www.georgiamagazine.org GEORGIA MAGAZINE 16 http://www.OurEnergy.coop http://www.OurEnergy.coop http://www.georgiamagazine.org

Table of Contents for the Digital Edition of Georgia Magazine - July 2011

Georgia Magazine - July 2011
Contents
Viewpoint
Mailbox
Picture This?
Georgia News
Calendar
Currents
Georgia’s Energy Outlook
Special Energy Report
A Jewel Against the Sea
“A Special Blessing”
Your Own Backyard
Around Georgia
My Georgia
Gardens
Georgia Cooks
Cookbook of the Month
Snapshot

Georgia Magazine - July 2011