Where We Stand
The Iowa Association of Electric Cooperatives strives to be an effective and visible presence before the Iowa General Assembly and to voice the legislative priorities of Iowa's electric cooperatives on a national level, too. Energy-related issues frequently arise at both levels and the Iowa Association of Electric Cooperatives gets directly involved in many of them. These bills can have a direct impact on our members, and, in turn, on their member-consumers. It is our goal to ensure that potential legislation is in our members' best interest and also that it is workable.
Renewable resources are an important part of Iowa’s overall energy mix. That’s why Iowa's electric cooperatives are actively integrating renewable energy into our systems. In doing so, we strive to balance safety, reliability and affordability with our commitment to being environmentally responsible energy providers.
On the federal side, Iowa Association of Electric Cooperatives is working closely with the National Rural Electric Cooperative Association on bills in the US House and Senate. One issue of significant interest to cooperatives, deals with rail transportation and the unfair costs cooperatives and consumers are being forced to bear by being held captive to a single rail provider.
Railroads were deregulated by Congress in 1980, but remain exempt from most of the nation’s antitrust laws. Most Midwest generation and transmission electric cooperatives generate a high percentage of their electricity from coal-fuled power plants and are dependent upon rail service for transportation of coal. Since Congress deregulated the industry, unprecedented consolidations have led to whole states, regions and entire industries becoming captive to a single railroad (by virtue of physical location) and subject to price gouging. This significantly impacts many cooperatives in Iowa.
Rail transportation is frequently the only viable method of transportation for coal, and 75 percent of electric cooperative’s electric generation is fuled by coal. Often there is no other choice for utilities, like electric cooperatives, to choose competing carriers making coal shipments captive to the railroads. Sadly, the Service Transportation Board has failed to protect consumers against high rail prices where there is no rail competition in Rural America.
Under prior Service Transportation Board rulings, railroads are charging excessive rates to captive shippers like grain elevators, electric cooperatives, farm and chemical producers, wood and paper processors, mining, milling and fabricating industries, just to mention a few. Some captive rail rates are as much as 400-500 percent more than the railroads' cost of providing service, and many times more than other customers who enjoy competitive rail alternatives. These excessive charges create higher electricity rates and lead to higher consumer prices for everyone. The Service Transportation Board has consistently exercised its regulatory authority over railroads in a manner that emphasizes the industry's profitability at the expense of protecting captive rail customers, such as my local cooperative’s generation & transmission cooperative.