Much is at stake with the upcoming Iowa legislative session as well the federal energy legislation currently being proposed in Washington, D.C.
The reasonably priced electric energy that Iowans currently enjoy is being ignored as the New York Times, Washington Post and Wall Street Journal editorially propose that national energy costs have to increase significantly in order to curb growing energy consumption, i.e. to mitigate future global warming.
The Senate Judiciary Committee has scheduled votes on Senate Bill S. 772 to repeal the railroads' anti-trust exemption (major league baseball is the only other anti-trust exempt organization in the United States). Senator Harkin has supported Iowa's electric cooperatives with this important issue while Senator Grassley has politely avoided providing any support.
Rural America and Iowa are getting financially flattened by the unrestrained pricing power of the railroad industry. Put a penny on a railroad track, wait for a train to pass and see what happens. Now you have a good idea of how rural electric cooperatives feel about our treatment by the nation's railroads.
Approximately 70 percent of Iowa's reasonably priced electricity is generated by coal which has to be delivered by rail in order to be economical for such large deliveries.
Rail service has become so intermittent and delivery so inconsistent that utilities can no longer rely on a continuous supply of coal as a generation resource. When there's no coal, most utilities turn to natural gas which is five to eight times more expensive than using baseload coal-fired generation plants.
House Energy and Commerce Committee Chairman John Dingell is promoting a draft bill that includes a "carbon tax" on fossil fuels ($100/per ton for the electric industry and 50 cents/per gallon for the transportation industry) combined with a flawed commodity cap and trade program. This proposal, if passed into law, has huge financial and economic impacts to the national economy due to the inherent carbon tax mandates.
Earlier this year, the Office of Management and Budget (OMB) halted all Rural Utilities Service (RUS) loan lending for new baseload electricity generation. The House FY08 Agriculture spending bill does not include any baseload generation loan provisions while the proposed Senate Agriculture bill requires at least an "AA" rating from a qualified rating agency for future cooperative electricity generation projects to move forward.
Our elected officials at the State Capitol and our National Congressmen and Senators, especially Senate Agriculture Committee Chairman Tom Harkin, need to clearly understand that they are directly responsible for the additional energy costs that will be incurred by their legislative actions and votes for punitive legislation mandates.
Now is the appropriate time and an opportunity exists to bring these energy issues to our legislators attention in order to help them draft better legislation that is right for Iowa with a Common Sense Energy approach.