Rural Missouri - February 2020 - 5

Missouri
RURAL

Volume 73 | FEBRUARY 2020 | Number 2
EDITORIAL STAFF:
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jmccarty@ruralmissouri.coop
Paul Newton, managing editor
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Heather Berry, associate editor
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Rural Missouri is published monthly by the
Association of Missouri Electric Cooperatives,
Caleb Jones, CEO/executive vice president.
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USPS 473-000 ISSN 0164-8578

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RM | PERSPECTIVES

Thanks Congress

by Caleb Jones
cjones@amec.coop

s 2019 came
to an end,
many electric
cooperatives
were thinking "no good
deed goes unpunished"
as they faced the unintended consequences
from the Tax Act of
2017. At issue was a
federal tax law change
targeted at for-profit
Jim Matheson, right, CEO of the National Rural Electric Coopcompanies. That change erative Association, worked tirelessly to help pass legislation
also mistakenly creatvital to your electric cooperative in 2019.
ed a requirement for
in the 2017 legislation and provided a
electric co-ops to count grants from
solution.
federal, state or local governments
The package of legislation passed
as non-member revenue. Most of the
nation's electric co-ops are tax exempt just before the year's end included a
number of high priorities for Amerentities. But to maintain this status,
ica's electric cooperatives. These
no more than 15% of their annual
included the RURAL Act, which will
income can come from sources other
ensure our tax-exempt status, the
than their members.
SECURE Act, which will lower premiThat's not a problem in a typical
ums on low-risk pension plans and
year when payments from member
repeal of the "parking lot tax" which
electric bills provide the lion's share
would have assessed taxes on a third
of co-op revenue. But consider what
of electric cooperatives.
happens if a major storm strikes MisThose voting in support of the
souri, damaging power lines. In this
measure included the entire Missouri
case the Federal Emergency Managedelegation - senators and represenment Agency will cover part of the
tatives - who understand the unique
repair expense. But under the 2017
role electric cooperatives play in the
law, those co-ops accepting FEMA
state and local economy.
grants could have been forced to
The legislative package will pregive a big chunk of it back instead of
serve the electric co-op business modusing it for its intended purpose.
el and save millions of dollars that
Ditto for those co-ops working to
otherwise might have increased rates.
bring broadband to rural America.
Most importantly, it will provide cerGrants for broadband deployment
tainty that your cooperative can conalso would have counted toward that
tinue to leverage grants for economic
15%, further hampering efforts to
development, storm recovery and
bridge the digital divide.
broadband deployment.
In another issue, electric co-ops
Many thanks to Missouri's U.S.
have been paying higher premiums on
senators and representatives for rectheir pensions as if they were Fortune
ognizing this problem and working
500 companies with high risk profiles.
to find a solution. In this and many
These co-op pension plans are well
other issues they have shown they
funded and have proven to pose minunderstand the unique challenges
imal risk. Yet the higher premiums
that face electric cooperatives.
they pay added more than $30 million
annually to expenses.
Jones is the executive vice president
Fortunately, legislators alerted by
and CEO of the Association of Missouri
the National Rural Electric CooperaElectric Cooperatives.
tive Association recognized the flaw
FEBRUARY 2020 | RURALMISSOURI.COOP

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Rural Missouri - February 2020

Table of Contents for the Digital Edition of Rural Missouri - February 2020