Regulatory certainty means clear, durable, and realistic rules that help utilities plan for the future, invest responsibly, and recover costs fairly.
We all live by rules. Rules help keep society orderly. They protect individual rights, and they give families and businesses a fair basis for planning. We make better decisions when we understand the rules and can trust they’re not going to change without warning. The same is true at your local electric cooperative.
Co-ops need clear regulations so they can make responsible decisions for the people and communities they serve. In the electric utility industry, regulatory certainty is especially important because our investments are large, long-term, and essential to everyday life. A new substation or transmission facility can cost millions of dollars, and a new power plant can require billions. Those are commitments co-ops make over decades, and the costs of those commitments are ultimately paid by members who depend on co-ops for reliable and affordable electricity. It’s almost impossible to make investment decisions wisely if the rules keep shifting.
Over the last 20 years or so, electric utilities have experienced what seems like regulatory whiplash. Especially at the federal level, new administrations tend to use policy to drive broad changes — and everyone is left wondering whether today’s rules will still apply after the next election. That uncertainty is one reason our industry now faces one of its greatest challenges: resource adequacy, or the ability to generate enough electricity to meet demand. Data centers, which have added major new demand to the grid, are only part of the story; for years, federal and state governments have sent mixed signals about how our nation generates its electricity, and co-ops have continually been caught in the middle.
Rules passed a few years ago will narrow the resources available to serve electric demand over the next 10 to 15 years, and in doing so, add trillions of dollars in costs and create serious reliability concerns. Efforts are underway to repeal those rules, but future administrations could simply put them forward again and start the cycle all over.
For co-ops and other utilities, that makes responsible planning harder and, more importantly, puts members at greater risk. Not-for-profit electric cooperatives don’t have the luxury of guessing wrong. Their mission is to provide reliable and affordable power to their members, as simple as that. But to carry it out, co-ops need a set of rules they can count on for the long haul. A country cannot build and maintain a modern electric grid if utilities must plan around political swings every four years.
Regulatory certainty doesn’t mean policy has to stand still. It means clear, durable, and realistic rules that help utilities plan for the future, invest responsibly, and recover costs fairly. As election season begins, we should encourage candidates and policymakers to understand the uncertainty that too-frequent shifts in energy policy create for our industry, making it harder to serve members the way they demand and deserve: reliably and affordably.
Craig Grooms is president and CEO of Buckeye Power, the co-op-owned utility that provides the electricity Ohio’s electric cooperatives deliver to their members; and Ohio Rural Electric Cooperatives, Inc., their statewide trade association.
