The United States urgently needs to transition from fossil fuels to clean/renewable energy. Unfortunately, many energy utilities are dragging their feet and fighting against climate resiliency strategies.
These county-level multipliers allow for a more accurate assessment of the economic impact of electric cooperatives than previously possible. Read on to learn how EV charging stations boost local economies.
Taxes
Electric utilities are required to meet heightened reliability standards and shift toward clean, sustainable energy sources. This requires substantial investment in infrastructure and technology. Consequently, they must also meet customers’ competitive energy pricing and service demands.
Increasingly, businesses are demanding transparency and accountability from their suppliers and lower costs. This has led to a growing number of business sustainability goals that require an effective power supply, which demands more innovation from electric utilities.
A large percentage of electricity costs are taxes, most of which come from state and local taxes. Introducing competition into the electric industry could significantly reduce these costs and provide customers with greater choices in an electric company in Arlington, TX.
The new tax legislation expands the range of entities claiming credit for investing in a clean energy project. This includes local and tribal governments, non-profit organizations and other tax-exempt entities like rural electric co-ops. The legislation also enables the direct pay option for certain credits, making it easier for communities to invest in clean energy projects. These changes are helping to accelerate the growth of local community-based generating, sharing and consuming systems called “energy communities.” Such systems maximize socioeconomic empowerment by engaging people otherwise excluded or passive from clean energy transitions. They also help to avoid grid losses and alleviate energy efficiency challenges by reducing consumption and optimizing generation.
Electric co-ops are big economic drivers in their local communities. They spend billions each year on operations and capital expenditures to deliver electricity to their consumers, as well as to invest in high-speed internet and other infrastructure projects such as electric vehicle charging stations. These investments create direct jobs, and when these workers spend their paychecks on other products and services, induced jobs are created in the broader economy. A recent report, commissioned by NRECA and prepared by Strategen Consulting (an NRECA associate member), provides further evidence of this impact using the IMPLAN input-output model to track local economic activity related to distribution and generation and transmission co-op spending.
EVs and charging station infrastructure also boost the economy by encouraging tourism in towns that offer this infrastructure while providing job opportunities for building and maintaining these stations. Moreover, by reducing greenhouse gas emissions, EVs and charging infrastructure can help reduce healthcare costs associated with air pollution.
However, it is important to note that studies have found that energy access only benefits households who can afford the technology and connection, leaving poorer communities behind. As such, it is critical for governments seeking federal funding for projects such as electrification to carefully consider their impact on local economies and make sure that they are targeting the most vulnerable members of their populations.
Sales
Electric companies significantly impact local communities because they are the backbone of energy infrastructure. The dollars that flow into the economy from electricity sales support local jobs, housing, schools, and community development projects. They also support local businesses and increase the tax base.
Until recently, the electric power industry was treated as a series of local, vertically integrated natural monopolies subject to rate-of-return and quality-of-service regulation. As markets evolve, we must consider how to achieve the benefits of competition – including lower prices and cost efficiencies and innovation – without imposing new inefficiencies or penalizing existing monopoly utilities.
A range of antitrust principles should be applied to ensure that the benefits of restructuring flow to consumers. These include unburdening markets from substantial and durable horizontal market power, removing incentives for vertically integrated firms to engage in undue discrimination and cross-subsidization, and promoting uniform disclosure of information – similar to food nutrition or energy efficiency labels – that allows consumers to make informed choices.
Additionally, EVs allow communities to reduce harmful air pollution by eliminating tailpipe emissions. While EVs do not eliminate all pollutants – industry and coal power generation, for example – they are one of the most effective ways to reduce pollutant exposures in communities. This helps to improve air quality, reduce asthma symptoms and other respiratory ailments, and decrease premature deaths caused by ozone and particulates.
Income
Electric companies are not only a source of income for employees but also provide valuable energy services that impact local communities. This can range from reducing energy waste to helping small businesses compete with bigger competitors through affordable electricity. In addition, many energy services utility companies provide are essential for community safety and resiliency.
While most people agree that competition in the electric industry can help lower prices, it’s important to remember that not all competitive models are created equal. Increasing competition without proper safeguards could result in a shift of costs to residential customers and small businesses. It could also lead to higher rates and less investment in infrastructure, which can negatively impact communities.
The cooperative model puts people first, and it demonstrates that there are ways to improve the way we deliver energy. As not-for-profit businesses nestled in their local communities and governed by those they serve, electric cooperatives understand the needs of those they power.
For instance, when the weather causes a power outage, community members can work together to support each other and minimize disruptions. This collaboration can also speed up the restoration process and allow for better disaster preparedness in the future.
Electric utilities can also make it easier for customers to access programs like the Low Income Home Energy Assistance. They can do this by creating partnerships across their communities and making it easier to connect with these services.
