Shortly after I joined the Lake Country Power Board in 2010, we had a member provide his analogy of what the MPUC vote represented. He indicated adverse action may follow if the “facility charge” was not lowered, and subsequent removal of directors would take place if the Board neglected to enact policy that suited his rationale. As he put it, there is discrimination against the “seasonal” members and “they” were the ones subsidizing the year-round residents. He summed the letter up with big bold type, “DO YOU GET THE MESSAGE?”
Since that first year, LCP has vigorously tried to communicate to members the financial challenges we face and how we invoke the principles of the cooperative world in our decision-making process. We have taken great strides in getting our message to members via our media outlets and “News-line,” and also through membership meetings and focus groups. Some folks still don’t seem to get our message, but we will patiently persevere.
LCP recently implemented a new “facility charge” and “energy rates.” Falling energy sales prompted the Board to investigate ways to ensure our financial standing with creditors remained sound and also ensure our delivery system would be well maintained. To achieve these goals, we developed three options for our members to evaluate and offer input for directors prior to implementing one that would solve our near-term obligations.
In order to maintain that safe and reliable system, we went to the heart of the matter and determined what it costs to maintain the infrastructure. A “cost of service” study showed $42 a month from all of our residential members would satisfy “service” requirements. This was the Board’s recommendation, and the one receiving the most votes by our membership. That figure is now our “facility charge.” Adjustments were also made for commercial accounts, ensuring all accounts contribute proportionally.
Revenues from fluctuating energy sales no longer support the maintenance and operations of our system as it once did. Ensuring the infrastructure’s integrity allowed for the “energy charge” to be reduced and become more in line with the actual wholesale power costs. The goal was to eliminate the impact spikes in the economy had on maintaining and operating our system. Growth will help keep future costs down; however, projections are somewhat anemic.
Changes are coming and we still must keep an eye on the horizon. My hunch is climate change will become more prominent in its affect on energy rates. The recent extreme weather surely will develop more attention and become more of an issue in the near term resulting in a carbon tax of some form. What will it be? Twenty dollars per ton of CO2 seems to be the common estimate. How does that relate to electricity? 1571 kWh is equal to one ton of CO2. If you pay at your meter, that cost would be 1.3 cents per kWh. If the tax is placed on the generating facility and the current efficiency standards aren’t improved, it would be around 3.2 cents per kWh. Current efficiency for generation is around 35 percent. *An additional note: 103 gallons of gas is equal to 1 ton of CO2 or 19.5 cents per gallon.
I suggested to some fellows in the industry that our future actions to deal with climate change and energy should be predicated on science, that the “laws of nature” should guide us in prudent decisions regarding the energy issues. Economics and politics will merely be footnotes, though they now seem to trump science with those wielding the levels of power. The country needs to embrace the science and set a course as we did with our space program years ago to help solve this problem. Chemistry, physics and biology will determine a successful outcome. I would add, “the sooner we get started, the cheaper it will be.”
Developing our deep geothermal energy resources could eliminate the CO2 emissions contributed by the fossil fuels for electric generation. National Renewable Energy Laboratory (NREL) estimates we have twice the capacity of geothermal available that we need for the entire country’s current demand for base-load generation. We just need to develop the process. We need the will. Surprisingly, the cost is projected to be competitive with current production methods, and long term, I think it will be cheaper.
New technology in liquid metal batteries under development by MIT’s Donald Sadoway could augment already developed wind farms. They would allow wind to provide base-load energy even though it may be generated at times when it’s not needed, but stored for the grid when it could be used effectively. The proposed large scale batteries that are modeled after the aluminum smelters, coupled with geothermal, could eliminate most of the fossil fuel generators and their emissions. Throw in concentrated solar thermal, hydro and wave generators and we will obtain clean, cheap and unlimited energy.
I often think back to that message the Board received with the threat, “Do You Get the Message?” Short signed and petty comes to mind. There are far greater challenges that confront the energy needs of our country than who subsidizes whom. True, we have to be attentive to our members at LCP. The Board will continue to do that, but there are many life-altering issues that will affect all of humanity if we do not take the climate issues seriously. There will be adjustments and economic investments required. That should be “The Message.”
Jim Huhta of Cromwell is the District 8 representative for Lake Country Power. He stated, “This is merely one Board member’s view of past and potential challenges as I see them.”