Five years ago,
Garkane Energy Cooperative knew it would need to upgrade about 30 miles of high-voltage power line to meet growing demand in scenic southern Utah. The line ran through federal land administered by the U.S. Bureau of Land Management (BLM), so the co-op began the process of seeking federal approval.
For three years, Garkane CEO Daniel McClendon recalls, the request seemed to lie dormant. As the need to improve the line became more pressing, the co-op worked for two years with local officials—“really good people,” McClendon says—to get the process moving and the upgrade approved.
Then leadership changed at the top of the Utah BLM, and “suddenly we were informed that we were going to have to start over because our line was going to be considered a brand new transmission line,” McClendon says. “Everything we had been working on for years, and we needed to start the process again.”
In the complicated landscape that electric cooperatives and the power industry must navigate today, challenges to maintaining or improving infrastructure can come from many directions. The regulatory environment is one of them, but rapidly changing technology, evolving consumer expectations, decentralized power generation, and a lack of federal spending in key areas add to the challenge.
“There are a lot of uncertainties,” says Jim Spiers, NRECA vice president for Business and Technology Strategies. “The question is, how do you make the investments in infrastructure now that will leave you with no regrets later? It’s a fluid landscape, but I think you can say, ‘Here are some views of the future in the next 10 years, and what does that tell us?’”
Garkane Energy was able to work with the state’s congressional delegation to get its project back on track. But around the country, co-ops are dealing with regulatory and other planning challenges as they work to improve or expand infrastructure. In a recent memo to the Trump administration, NRECA identified several areas of regulatory concern and steps the government could take to improve the situation.
“The reason infrastructure is a big conversation right now is that President Trump has been talking about supporting infrastructure,” says Jay Morrison, NRECA vice president for regulatory issues. But, he adds, the concern on Capitol Hill about federal spending means changes in policy are more likely than big government investment in new projects.
As cooperatives plan to meet consumer expectations, there are several concerns.
Electric cooperatives have a long history of environmental stewardship. But in its message to the administration, NRECA pointed to recent environmental regulations that impose “an unreasonable and unnecessary burden” on electric generation infrastructure, even contributing to the premature closure of power plants that otherwise would have many remaining years to produce electricity.
Two rules recently put in place that govern the management of wastewater and solid waste produced by coal-burning plants could lead to significantly increased compliance costs and the closure of some plants. NRECA asked the U.S. Environmental Protection Agency to reconsider the wastewater rule and allow site-specific, risk-based flexibility in implementation.
NRECA also pointed to areas where the regulatory process used to implement the National Environmental Protection Act, the Endangered Species Act, and other major environmental laws could be modified to help cooperatives maintain and improve infrastructure.
Among other things, all benefits of infrastructure improvements should be fully considered during the application review, and local circumstances should be weighed in the process, NRECA said.
Janelle Lemen, NRECA senior principal for environmental issues, says the environmental review process can be particularly laborious when co-ops are “permitting new infrastructure or re-permitting existing rights-of- way on public lands,” as Garkane Energy’s case illustrates.
Cooperatives also can face challenges in basic infrastructure maintenance on public lands, she adds.
“One of the top areas is vegetation management and how it relates to fire suppression,” Lemen says. The approach by the federal agencies is largely hands-off when it comes to managing tree and underbrush growth on wild federal lands. The philosophy is to allow the natural pattern of overgrowth followed by a burn-off proceed.
But for co-ops with lines running through these lands, excessive growth near a line poses an obvious risk to reliability of electricity delivery, as does any fire.
“We would like to see some clarification of the rules regarding the danger posed by trees that occur in the periphery of the right-of-way, so co-ops can manage them to prevent reliability and safety issues,” Lemen says.
Dams and Hydroelectric Resources
The growth of solar and wind power has captured the attention of the nation over the last couple of decades, but electric cooperatives have a long-standing relationship with another large source of renewable energy critical to the nation’s power supply.
“Roughly two-thirds of our members, about 600-plus co-ops, directly or indirectly, are federal hydropower preference customers,” says Pam Silberstein, NRECA senior director and power supply counsel. “When you look at some states, like Nevada, Utah, Montana, you have co-ops that are almost 100 percent hydropower.”
Yet many of the dams that provide this power are in need of repair, and the costs will be high. Repairing all U.S. dams that need to be brought up to safe condition could cost $60 billion, with $20 billion of the total going to urgent repairs, according to estimates by the Association of State Dam Safety Officials.
Not all of those dams provide hydroelectric power, but Silberstein notes that many dams generating electricity need maintenance or upgrades.
“Dams are part of the nation’s aging infrastructure overall,” she says. “And the rehab costs are astronomical. The issue is, who pays for it?”
More than 700 dams are operated by the U.S. Army Corps of Engineers. Under law, sponsors that benefit from Army Corps dam operations—water supply utilities, recreational and flood control interests, and hydropower facilities—are supposed to share in the cost of operating and repairing these dams.
But a 2015 U.S. General Accounting Office study found that the government has not effectively communicated with sponsors of dam operations about the cost of repairs and how those costs should be shared. NRECA is urging the administration to make sure the costs are properly allocated so that no one sponsor, including utilities that operate hydroelectric power facilities, bears an unfair burden.
Expanding hydroelectric generation would help to satisfy the nation’s growing appetite for green power, Silberstein says, and some co-ops are partners in new hydro projects or are 100 percent owners. But new projects take, on average, six years to work their way through the Federal Energy Regulatory Commission (FERC) approval process, according to the National Hydropower Association. Additional permitting and review at other federal agencies can stretch the process to 10 years or more.
NRECA is asking the administration to commit to all federal authorizations for hydropower being completed within three years after a FERC application is filed.
“There’s tremendous potential there, but the licensing process is excruciating,” Silberstein says. “We’ve called for streamlining that process.”
Telecommunications and Broadband
The “digital divide” between rural America and urban areas has been an issue for decades, one that grew in importance as the internet began assuming a greater role in daily life. Yet access to advanced telecommunications, particularly high-speed broadband service, continues to be a challenge in many rural areas.
Closing the gap is essential to the continued economic and social vitality of rural America, says Martha Duggan, NRECA senior principal for regulatory affairs, particularly when it comes to cellphone and high-speed internet service.
“It is a necessity,” she says. “It’s not just nice to have anymore.”
Many small businesses need reliable internet service if they hope to grow, Duggan notes. In addition, distance learning is important to providing quality education in less-populated areas. Medicine also depends on broadband for the transfer of important data, including diagnostic images, and reliable telecommunications are vital to personal safety in lightly traveled parts of the United States.
NRECA is asking the Rural Utilities Service (RUS) to streamline its grant and loan processes for rural broadband so applicants are notified of the status of their request within 30 days. If there are no problems with the application, NRECA says, RUS should make a final decision within 60 days.
NRECA believes RUS should also reward applications that build upon existing infrastructure and take advantage of existing providers, encouraging partnerships and faster deployment of upgraded telecommunications.
“We want a big tent and a lot of people at the table. We need to have a good look at the federal resources available and who those resources are going to,” Duggan says. “Is it going to be Verizon, or is it going to be all kinds of providers, many of whom are not traditional providers, like our members, but are ready, willing, and able to take up the challenge?”
Federal Communication Commission Chairman Ajit Pai has appointed NRECA CEO Jim Matheson to a special broadband deployment advisory committee, which Duggan says will help ensure that rural areas are positioned as viable partners for broadband expansion.
As RUS and other federal agencies support broadband deployment, Duggan says the government should “put resources in the hands of electric co-ops that are willing to build the networks, create the infrastructure, and deliver the service. Our members aren’t going to settle for second class.”
Transmission and Distribution Grid Management
The overall state of the nation’s power grid is the subject of debate. A 2017 report card of the nation’s infrastructure by the American Society of Civil Engineers (ASCE) found that much of the system constructed in the 1950s and 1960s is nearing the end of its life expectancy and will need to be replaced. “Energy infrastructure is undergoing increased investment to ensure long-term capacity and sustainability,” the report states.
But analysts who follow the industry closely believe the situation is much less dire than the ASCE’s grade of D+. The study, they say, fails to take proper account of upgrades and modifications continually being made across the grid.
NRECA’s Morrison says electric co-ops, created to put their members’ needs first, generally have been diligent about maintaining the distribution system, substations, and other assets at the heart of their systems.
“We’ve been investing in this infrastructure for 80 to 90 years,” he says.
Electric cooperatives also have been leaders in implementing smart grid technology, improving both the reliability and efficiency of the system.
“Everybody’s been putting in new technology as it made sense, and co-ops are ahead of a lot of the industry when it comes to digital,” Morrison says.
A key challenge now to improving grid infrastructure, says NRECA’s Spiers, is adjusting to rapidly changing circumstances in the industry.
“Historically with infrastructure, we’ve always invested with the idea that we have 30 years to recover costs,” he says. But as the growth of distributed energy resources and changes in information technology have proceeded at a quicker pace than past industry advancements, the investment horizon for some infrastructure has shortened significantly.
“Now you have to think more carefully about the economic lives of different parts of a system,” Spiers says. “So the planning models have to change to match up with how fast you see this pace of change coming at you.”
Still, he says, electric cooperatives have been here before.
“I’d argue that it’s no more complex than what our predecessors faced 80 years ago when they had to figure out, ‘How do we electrify rural America?’ And they did it,” he says. “We now have a tremendous amount of data and analytics we can apply to today’s challenge. I’m confident we can do it too.”