Climate Change Statement

Approved by the Dairyland Board of Directors September 19, 2008.

Dairyland Power Cooperative, a generation and transmission cooperative based in La Crosse, Wisconsin, serves the power needs of almost 600,000 people living in the four states of Wisconsin, Iowa, Minnesota and Illinois. We are governed by a Board of Directors elected from our membership. In January 2008, our Board adopted an environmental management and stewardship policy confirming the commitment of our entire organization to a healthy environment, now and in the future.

Today, public concern about the potential impact of greenhouse gases (GHG) on our climate has reached the point where elected officials feel compelled to take action. Because of our commitment to the environment and the clear public concern over GHG, Dairyland pledges to work with our elected officials to develop fair, comprehensive policies to address GHG emissions. We are in favor of our elected representatives addressing this issue, rather than allowing unelected bureaucracies or courts to pass regulatory policies without our input. This paper outlines our views on this incredibly important and complex issue.

Since our founding in 1941, Dairyland as a member-owned and governed cooperative has been driven by the goal of providing reliable and affordable energy for our members. Issues of reliability and affordability are still vital concerns to our members. We will be an advocate for our nation adopting those climate change policies that will do no harm to electric reliability and have minimal impact on affordability while still improving the environment in which we all live, work and play. We will work for policies that will not harm economic growth or put our national security at risk because these are fundamental values that secure our way of life. Consistent with the cooperative philosophy, our response to climate change legislation is also grounded in a member resolution passed at our most recent annual meeting.

At the outset, it is important to point out the complex challenge of addressing GHG emissions. There is no commercially available technology that can be adapted to retrofit existing fossil-fueled power plants to reduce or eliminate CO2 emissions. Reducing the output of GHG emissions will require the adoption of a number of strategies in the short term and the development of new technologies in the longer term. “Targets” for GHG emission reduction must have realistic time frames if we as a nation are going to achieve desired results.

It is also important to point out that the cooperative energy sector has historically had a strong reliance on coal-fired power, which is true with Dairyland Power Cooperative as well. The reason for this is straight-forward and simple: coal is a plentiful domestic fuel resource that has provided the most reliable and affordable type of energy. Since cooperatives operate on non-for-profit basis solely to benefit their members, coal-fired power has been a logical choice for the entire cooperative sector. As prevailing thoughts have evolved regarding coal-based power, we must also understand that we are living with past decisions made by our cooperative leaders lawfully, in good faith and in the best interest of their members. These well thought-through decisions are not easily nor quickly changed. Because of this historical fact, climate change legislation, if not fairly crafted, could cause devastating impacts on our members.

Given this background, we offer the following principles that will guide our views and our positions in addressing the climate change issue:

Climate change legislation must cover all sectors of the economy and not simply electric utilities. If we are serious about reducing GHG emissions, all GHG-emitting businesses must be asked to do their fair share.
Climate change legislation must be national or international in scope. State by state or even regional policies will not adequately address the issues we face, and would unnecessarily complicate business decisions for cooperatives like ours serving members in four different states. We oppose regulation at the state level and feel state action is not the appropriate vehicle to achieve significant emissions reduction.
While the United States cannot force other nations to match our policies, we must insist through our trading policies that businesses in those nations who seek to do business in the United States must meet our GHG standards. If they are going to sell their products in competition with American manufacturers and workers, they must be held to the same standards as American companies.
This nation must make an immediate, unprecedented and powerful investment in technology to meet aggressive GHG reduction targets. As this nation committed ourselves to the Apollo space missions that radically expanded the bounds of human exploration, we need a dramatic program of research and development to alter contemporary energy choices. Without significant technological improvements, climate change legislation could wreak havoc on our economy, putting special pressure on those in society who can least afford the change, and decimating our remaining manufacturing industries.
In the short term, we should continue to emphasize energy conservation, energy efficiency, enhanced building codes and appliance standards and proven techniques like carbon storage in agricultural and forest programs. Dairyland has one of the best load management programs in the industry, wisely utilizing our resources to reduce demand for new peak energy plants. Governments should support and encourage load management and support research into time of day pricing, smart grids and other technological methods to better use our existing power delivery network. These programs must be transparent and understandable to the general public so everyone understands their role in cooperating to meet targets.
One of Dairyland’s priorities is promoting safety for our employees, our members and the general public. Short term steps to deal with GHG gas reductions must take into account safety to everyone concerned. We should not sacrifice safety as we develop technologies to address the climate change issue.
Dairyland is committed to the continuing development of renewable resources, an important part of the solution to GHG emissions. We have developed a fleet of wind farms, manure digesters, biomass projects, landfill gas projects and a hydro facility, and are on track to meet existing mandated renewable goals. Dairyland is also a member of the National Renewables Cooperative Organization (NRCO), and our President and CEO Bill Berg is Vice President of the NRCO board. This cooperative organization was formed to give electric cooperatives better access to renewable project opportunities throughout the nation. Our members have taken the following aggressive stance on renewable energy: “Recognizing the challenges involved in siting, permitting and constructing renewable resources, we commit our cooperative to work diligently toward achieving a 25% level of renewable energy by 2025.”
We should remove regulatory impediments to increasing the efficiency of existing power plants. If we can enhance plant output while using less fuel, we will be reducing GHG emissions in our atmosphere.
Dairyland supports changes in state and federal legislation and regulations to streamline the process of allowing nuclear power plants to be built as a viable option for carbon-free baseload electric energy. We strongly favor a national commitment to nuclear energy, including supporting a new generation of nuclear plants, reprocessing of commercial spent nuclear fuel, and prompt action to meet the promise of a national spent fuel repository. While a utility of our size is unlikely to engage in building a nuclear plant of our own, this nation needs nuclear as a baseload option, and opportunities to partner in regional projects or at least purchase energy from nuclear plants should be available as we strive for ways to meet GHG reduction targets. Any incentives for new nuclear plants must be available to non-profit energy providers.
Legislators need to understand the complete economic impact of their decisions and the ultimate ramifications on the consuming ratepayer. As a general rule, rural electric cooperative members have lower incomes than customers living in urban areas. Our operating costs for transmission and distribution are higher because we have far fewer customers per mile of line. In the short term, economic “off ramps” may be necessary if we cannot meet legislated targets without disproportionate rate increases in rural America.
Economic incentives, tax benefits, research monies and other government expenditures to deal with GHG emissions must be available to all segments of the population and their energy providers.
If legislative proposals include a cap and trade program, policymakers must provide a full allocation of credits to cooperatives and other non-profit energy providers. If we are forced to go to an auction or market to buy legal permission to do what we currently do to serve our members, our members will pay twice: first to buy credits, and then to change our power supply options in the future. We believe auctions will be open to financial manipulation by entities interested in speculative profit opportunities, not public service, and would almost certainly result in unforeseen consequences which will put rural America at risk. A full allocation of credits still develops market forces that will require us to work to reduce our GHG output, but in a manner that does not create financial disruption to our members.

Regardless of the outcome of legislation, Dairyland members have asked management to continuously look for ways to reduce our emissions of GHG through adaptation of new technology and improved operations and planning, bearing in mind the high concern for safety and reliability. We have also committed our full support for research through organizations such as the Cooperative Research Network and the Electric Power Research Institute (EPRI). We believe the recent EPRI Prism study is a fundamentally sound representation of the breadth and diversity of approaches necessary to meet this challenge, including enhanced energy efficiency, expanded renewable resources, new nuclear generation, advanced coal generation, expansion of plug-in hybrid vehicles and new technologies of distributed generation.

In the upcoming debates on climate change, Dairyland pledges:

To make our future strategic planning decisions with full awareness of the climate change issue, and to continuously work to develop those resources which have the proper balance between reducing our GHG emissions and assuring reliable and affordable electricity for our members.
To explain our involvement and actions on this issue to our Board and our member-owners in a straight-forward manner that encourages individuals to support our efforts and to get involved in the public policy debate.
To continue to view each legislative proposal through three important viewpoints – impact on the environment, impact on system reliability and impact on affordability of power – and share those findings with our elected officials so they fully understand the ramifications of their actions.
To form alliances with other groups who share our basic principles in order to more effectively broaden our voice in legislative arenas. In particular, we will work closely with our statewide cooperative organizations and the National Rural Electric Cooperative Association to have as much of a unified cooperative voice as possible on this important issue.
To monitor federal and state proposals on climate change, and educate our elected officials concerning issues with pending proposals.
To challenge elected and non-elected government officials, as well as other proponents of GHG reduction to provide quantification of the impacts of anticipated changes in global climate, including time frames and costs for their proposed climate change initiatives.

We must work together on this challenging issue to meet environmental concerns and to do so in the most sensible, responsible, intelligent and fair way for our cooperative members, who depend on Dairyland Power, their electricity supplier, to provide their daily energy needs to ensure an opportunity for healthy lives, economic security and general well-being.