The Cooperative Difference: Perspectives on rural priorities

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One of the great things about America is the freedom to petition government on issues that are important to us. This freedom is guaranteed by the First Amendment: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” These freedoms do not exist universally or globally, and there are many countries where expressing views that are not in absolute agreement with the ruling party line is punished.

I recently had the opportunity to share the perspectives of the Electric Cooperatives of Arkansas with the U.S. Senate Committee on Agriculture, Nutrition, and Forestry at a hearing in Jonesboro. The hearing was titled, “2023 Farm Bill: Perspectives from The Natural State.” I want to personally thank Chairwoman Sen. Debbie Stabenow of Michigan, and Ranking Member Sen. John Boozman of Arkansas, for the opportunity to provide written and oral testimony to the committee. While freedom of speech is guaranteed in America, an effective platform to use it is not. Their invitation to testify allowed the perspectives of electric cooperatives to be heard.

U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairwoman Sen. Debbie Stabenow of Michigan, AECI/AECC President and CEO Buddy Hasten and committee Ranking Member Sen. John Boozman of Arkansas at the Farm Bill hearing in Jonesboro. Photo by Jennifer Christman Cia.

The Farm Bill, approved about every five years, is the federal government’s main instrument to implement agriculture and food policy. It includes rural development, which is where the electric cooperatives come in. As a kid growing up on a small farm in Keokuk, Iowa, I had no idea that the Farm Bill was so complex, so comprehensive or so important to rural America. I had no idea that I had the Farm Bill to thank for the 5-pound blocks of government cheese my mom received that made the best grilled cheese sandwiches in the world. If you had asked me what a Farm Bill was in the ’80s, I would have said that it was something that showed up in our old metal mailbox on the gravel road that made my mom and dad worry a lot. My dad was a mailman by day and a farmer Saturdays, Sundays and nights. We often joked that my dad had to carry the mail to subsidize his farming habit. We also joked that the only reason that he had kids was to support his farming habit.

The first Farm Bill was the Agricultural Adjustment Act of 1933, which was part of the New Deal. In the wake of World War I and the Great Depression, farmers were growing as many crops as they could to pay off debt, which had the effect of lowering prices and causing even more severe economic hardship for rural America. The initial Farm Bill provided subsidies to incentivize farmers to produce fewer crops to stabilize prices. Electric cooperatives were also born out of the New Deal and remain connected to the Farm Bill to this day through the rural development portions of it. There have been 18 Farm Bills, and the last was signed by President Donald Trump in 2018. How much money is in the Farm Bill? Well, the Congressional Budget Office (CBO) estimates that the 2018 Farm Bill will cost about $428 billion during the five-year period (2018-2022). The next Farm Bill is due to be approved in 2023, and we are lucky to have Sen. Boozman as the ranking member to help drive the priorities for this new Farm Bill.

The Electric Cooperatives of Arkansas’ community-focused perspectives concentrated on three key points:

  • Recent warnings regarding grid reliability should be taken seriously, and policymakers should approach energy policy with a primary focus on electric reliability.
  • As higher than normal inflation persists, co-ops are advocating for policies to keep energy costs down for rural Americans.
  • The U.S. Department of Agriculture (USDA) provides electric cooperatives a toolbox of useful programs that provide significant returns on investments in rural America (e.g., rural broadband).

AECI/AECC President and CEO Buddy Hasten testifies about the importance of grid reliability, lowering energy costs and rural broadband. Photo by Jennifer Christman Cia.

Electric cooperatives are committed to keeping the lights on across rural America at a cost that families can afford. This is exactly why we started our “Balance of Power” campaign in 2021 to educate our legislators, regulators and member-owners. As we look to the future, we worry that federal and state policies, as well as market changes, are causing an imbalance of electric supply and demand that jeopardizes our ability to fulfill this commitment.

We are very concerned about the recent retirement and amount of planned future retirement of baseload electric generation sources being replaced primarily by intermittent generation like wind and solar. The Electric Cooperatives of Arkansas are committed to deploying more nonfossil energy. However, we believe the ongoing energy transition is moving at a pace that ignores current technological and market realities. Why does it matter? When the reliability of the electric grid fails in rural America, it almost always results in financial catastrophe and loss of human life. The cooperatives advocated that, via the Farm Bill, the USDA through the Rural Utility Service (RUS) continue to make loans for all types of generation technologies — both traditional baseload and intermittent. We also strongly advocated for leveling the playing field when it comes to access to federal incentives for nonfossil energy investments. Due to cooperatives’ not-for-profit structure, we are unable to fully utilize tax credits for nonfossil energy. If cooperatives had comparable incentives — and could receive the full value of the tax credits through a direct payment — we could more effectively pursue emerging energy development where it makes sense.

Broadband access also remains a top priority for many rural electric cooperatives. From supporting our farmers and ranchers as they utilize more precision agriculture technology, to ensuring that rural schools and businesses aren’t left behind, a reliable, high-speed broadband connection will enhance the quality of life for rural Arkansans. In response to growing demand, several electric cooperatives began deploying fiber to their members, drawing similarities in the need for an internet connection to when electricity was needed in rural areas back in the 1930s. Today, 13 of Arkansas’ 17 electric cooperatives are deploying fiber in their service territories, connecting thousands of consumer-members. Building on that success, 13 of those co-ops and Arkansas Electric Cooperatives, Inc. (AECI) recently banded together to create Diamond State Networks, a wholesale broadband provider aiming to connect rural Arkansans with gigabit-level internet service. Once completed, the network will include an operational fiber ring covering more than 64% of the state’s land mass. It will include more than 50,000 miles of fiber lines and connect thousands of rural Arkansans with vital services.

Beyond just an internet connection, this fiber network will also support ongoing efforts to increase the reliability, sustainability and safety of the electric grid. The network will enable Arkansas’ electric cooperatives to reduce overall costs while improving response times in the event of an outage, increasing operational efficiency and ensuring that resources are effectively managed to meet member power demands.

The USDA supports rural broadband via the ReConnect Loan and Grant Program. However, the program is unwieldy and set up for traditional telecommunications companies, and does not account for the electric cooperative business structure. Our perspective is that this program could be streamlined to help electric cooperatives to deploy fiber more quickly.

As an adult, I now know that I have the Farm Bill to thank for helping with our mission of providing Reliable and Affordable energy and services Responsibly to our members.

Vernon Buddy Hasten is President and CEO of Arkansas Electric Cooperatives, Inc., and Arkansas Electric Cooperative Corporation.

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