Duane Highley: Your Energy Future

Editor’s note: This guest commentary was written by Duane Highley, President and CEO of the Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives, Inc. It is reprinted with permission from September issue of Arkansas Living.

Last month, President Obama and the EPA Environmental Protection Agency (EPA) announced a new set of environmental regulations designed to reduce carbon dioxide emissions from power plants. More than 1,500 pages in length, the new rules will restructure the way we generate and use electricity. We can read the words, but we won’t know for several years what all those pages of regulation really mean, as the courts issue interpretations in response to the mountain of lawsuits that will be filed. But, until then, we can begin to anticipate some changes and plan for your power supply of the future.

So, what does the future hold?

LESS COAL-BASED POWER
In the last five years, low-cost coal-based electricity has dropped from 44 percent of the national energy mix to just 30 percent. The EPA plan will accelerate this change, but existing environmental rules and low natural gas prices are already pushing us in this direction.

MORE NATURAL GAS-BASED POWER
Driven by abundant domestic shale gas and its naturally lower emissions, natural gas’ share of our national electric energy supply has increased in the last five years from 22 percent to 31 percent. Expect to see even more gas-based generation in the future, as utilities continue their shift from coal to gas.

MORE WIND FARMS
Expect to see more wind farms built, especially in Kansas and Oklahoma. Here in Arkansas, we’ve already identified the best potential wind sites, but the prospects for development aren’t nearly as good as those of our neighbors where abundant wind energy is already supplying a portion of your energy needs.

MORE SOLAR ENERGY
Arkansas has some of the lowest electric rates in the country, but even here, with the help of a 30-percent federal tax credit, solar energy has started to become competitive in certain applications. As prices continue to drop on solar panels, you will see more large-scale solar farms.

MORE POWER LINES AND PIPELINES
When coal plants close, the energy has to be imported from elsewhere on the grid. New natural gas-based power plants will be the primary replacement for retiring coal-based plants, and they will require new pipelines to supply their fuel. Renewable energy from Kansas and Oklahoma has to be delivered to the rest of the country. All this will require new investments in critical infrastructure, such as high-voltage transmission lines and fuel pipelines. No one wants this infrastructure built in his or her backyard, but we will need these additional resources to maintain reliability.

MORE EMPHASIS ON ENERGY EFFICIENCY TO LOWER YOUR ELECTRIC BILLS
The trends listed above are likely to increase your electric bill as low-cost resources are replaced by cleaner, but more expensive ones. One way for you to manage the increasing costs will be to use your energy more efficiently. Simple measures such as insulation and caulk, as demonstrated in our energy efficiency home makeover projects, are often the most cost-effective solution to high bills. Your non-profit electric cooperative wants to help you save money on your electric bill and can assist you in identifying the best options.

As we continue to read and analyze the EPA regulation and await the outcome of the inevitable lawsuits, we will be working hard to ensure that your power supply remains secure, reliable and affordable. In Arkansas, we are well prepared for the future with a diverse portfolio of resources. But even with that, these changes won’t be easy, and they won’t be free. As we help the state craft a plan for complying with the new regulations, we will keep affordability and reliability as our primary goals. That’s our job, and we are proud to work for you to keep it that way.