Letter: Coal debt is holding back rural America

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Rural America could power a clean economy—but first, we need to solve the coal debt crisis.

As the price of renewable energy declines, more and more wind and solar projects are being built across the country. These projects are creating jobs, reducing pollution, and helping keep electricity rates stable. Because of our abundance of space, sunshine, and wind, most new renewable energy projects are built in rural America.

Shockingly, the electricity from these renewable energy projects doesn’t power rural communities. Instead, many rural communities are dependent on expensive and dirty fossil fuel-generated electricity provided by their rural electric co-ops. Nationally, electric co-ops make 67% of their energy from coal and natural gas.

Some co-ops are taking steps to transition from fossil fuels to renewable energy instead. In Iowa, Farmers Electric Cooperative generates 20% of its energy needs from local solar projects. Kit Carson Electric Cooperative in New Mexico aims to use solar power to generate 100% of its daytime energy needs by 2022.

Co-op members support this transition because it can produce benefits such as emissions reductions while also lowering costs. In 2017, the price of solar and wind energy became more affordable than natural gas and coal-based energy sources, decreasing by 88% and 69%, respectively. A 2018 Rocky Mountain Institute report found the transition to renewable energy could save electric co-ops in some states at least $600 million by 2030.


However, many rural electric co-ops face a major roadblock in switching to clean energy: billions of dollars in debt on outdated and uneconomic coal plants. Instead of investing in energy efficiency measures and new clean energy projects, co-ops are stuck paying this coal debt. They are forced to buy expensive, dirty electricity, even when closing these failing coal plants could reduce costs.

To grow the renewable energy economy in rural America and keep electricity affordable, we have to solve this coal-debt problem.

Fortunately, there are solutions. Three Midwest organizations propose ways to fix the coal debt problem in the new report—“Rural Electrification 2.0: The Transition to a Clean Energy Economy.” It presents viable options for policymakers and electric co-op leaders to consider when addressing this coal debt problem. Tools such as securitization, credit asset swaps, debt absolution, or regulatory actions could be paired with clean energy guidelines.

CURE, Center for Rural Affairs, and We Own it prepared the report, and it can be read in its entirety here: .


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It’s also notable that much of this coal debt is owed to the federal government, through the U.S. Department of Agriculture’s Rural Utility Service. That means changes in federal policies can play a key role in getting rid of the coal debt burdening electric co-ops and rural America.
Rural America needs us to stop ignoring the coal debt that’s throttling a clean energy future. Addressing this problem means more affordable and renewable energy for the Midwest and the entire country. New tax revenue from these projects means more money for schools, roads and other infrastructure, providing a necessary economic base for rural areas. Proposals for addressing climate change must prioritize renewable energy investment and include solutions for coal debt. We hope to see more ideas from candidates, policymakers and co-op leaders about how we can work together to solve rural America’s coal debt problem and accelerate our transition to clean energy.

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