Pella Chronicle

Business

May 12, 2012

Loebsack hears Pella Cooperative Electric's concerns

Pella — Congressman Dave Loebsack met with representatives from Pella Cooperative Electric (PCE) Saturday morning and listened to their concerns regarding the future of the electric industry.

PCE had three major concerns for the Congressman. The first was in regard to Rural Utility Services grants. This federal program provides $6.1 billion to be loaned to electric companies to improve and build new infratructure. PCE CEO John Smith said these loans are always paid back, and this year are estimated to make $300 million for the federal government.

The concern is that new restrictions for the use of the RUS funds have been proposed. Its funds may not be able to maintain or retrofit coal, nuclear and in some cases, natural gas-powered facitilies.

For firms such as PCE, which have expanded into utilizing wind and other renewable energy, there is still a need for dependable baseload generation. Baseload generators include coal, nuclear and natural gas power. Restricting the ability to use these fuels to maintain electrical output could lead to rolling blackouts, or could otherwise hinder economic development if the power plant is unable to support greater electrical demand.

"RUS needs that restriction removed if we can do it," Smith told Loebsack. "We need to have the ability to supply whatever kind of generation is needed."

Loebsack said the difficulty in maintaining this program is because people can be ideologically opposed to it, simply because it is a government program. Congress is allegedly seeking ways to cut spending and Loebsack believes this program may be cut. Loebsack also expressed his hope that this will not lead to rolling blackouts.

"A lot of these problems are very third world and we don't want this country to be that way," Loebsack said.

Another fiscal issue the PCE representatives raised to Loebsack was in regard to the Power Marketing Administration (PMA). Municipalities entered into contracts with this program in the 1960s. At the time, they were paying rates higher than market value, in the hopes that as time went on, the rates would be lower than market value, thus saving money.

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