Pella Chronicle

May 12, 2012

Loebsack hears Pella Cooperative Electric's concerns

By Steve Woodhouse
The Chronicle

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.

Energy Secretary Stephen Chu has suggested restricting funds in the PMA to be used for new energy streams, and to promote electric vehicles, energy efficiency and economic development, according to Smith. These things were not in the contracts signed in the 1960s.

Smith told Loebsack that if Chu's suggestions are approved, it will lead to higher electric prices. Smith does not believe these PMA funds should be used for things outside the scope of the original agreement.

"The fiscal constraints are so severe, they're looking for ways to fund many things," Loebsack said. He was asked to raise awareness of Chu's idea and to oppose it.

Finally, the group discussed an Environmental Protection Agency (EPA) proposal to designate coal ash as a hazardous waste. Loebsack does have a concern about coal ash and that it may be harmful to the environment.

"We've got to find some kind of a compromise," Loebsack said.

Smith told Loebsack that coal ash, at least in the Midwest, has been recycled for years. It has been used in concrete, as a farm implant and in making bowling balls. There have been two reports accredited by the EPA that show that coal ash does not meet hazardous waste requirements. Loebsack was asked to oppose the hazardous waste designation.

"It will cost a lot of money to the rate payers in this part of the country," Smith said. There may also be problems with the disposal of old concrete in which coal ash was an ingredient.

Prior to the discussion, Loebsack toured the PCE facility. He was impressed.

Following the meeting, the five PCE directors present, as well as Smith, said they thought the meeting went well.

"We're pleased he's willing to spend the time," Smith said. Anytime a business is able to get a Congressman to come for a visit, on a weekend especially, is impressive, he added. He said he is eager to work with Loebsack.

"It's good to hear their concerns," Loebsack said. He was glad to visit.

Loebsack is seeking the Democratic nomination for US House District 2, which includes Marion County. He is being challenged in the primary by Joe Seng. On the Republican side, John Archer and Dan Dolan are seeking the nomination for the same seat.

Marion County is still represented by Congressman Leonard Boswell. Loebsack will represent Marion County, beginning in January 2013, if successful in the November general election.