On the Hill  | Kentucky co-op leaders advocate for local consumer-members

WASHINGTON, D.C. – All eight members of Kentucky’s congressional delegation met with Kentucky co-op leaders at the U.S. Capitol on April 30 as co-ops advocated for several legislative priorities.

Thirty-six Kentucky co-op leaders, including managers, directors and statewide association staff represented the concerns of local consumer-members during the NRECA’s 2019 Legislative Conference.

Co-op leaders expressed gratitude to all federal lawmakers who voted to approve the 2018 Farm Bill which included specific provisions related to co-op loans that helped a number of co-ops avoid rate increases. In particular, Senate Majority Leader Mitch McConnell, U.S. Rep. Hal Rogers and U.S. Rep. James Comer were commended for their dedication in advancing the co-op friendly provisions.

Every Kentuckian in Congress expressed support for the issues presented by co-op leaders during their Capitol Hill visits, including these three key items:

  • Protect the tax-exempt status of co-ops

Recent changes to the Internal Revenue Code created an unintended consequence for rural electric cooperatives. Because government grants are now considered non-member income, this may impair the ability of co-ops to use the full value of a grant to benefit members. A co-op struck by disaster may have to consider whether it can afford to use FEMA’s Public Assistance Program to help restore power. In essence, co-ops could be forced to choose between maintaining tax-exempt status or accepting FEMA assistance when recovering from a major storm or disaster.

Without a legislative fix, some USDA funding and potential income from broadband services could also affect co-ops’ tax-exempt status. Kentucky’s two senators and six representatives were urged to take action to amend Section 501(c)(12) to retain the tax-exempt status of electric co-ops.

This will allow the full use of federal, state or local grants to benefit consumer-members.

  • Stop PBGC overcharging

Members of Congress were urged to support H.R. 1007, the “Retirement Enhancement and Savings Act” and similar legislation expected in the Senate.

By our nature, co-ops pose virtually no risk of default to the Pension Benefit Guaranty Corporation, yet we continue to pay high-risk premiums. Current PBGC rules designed for “single-employer” for-profit companies inappropriately require co-ops to divert scarce resources from our core mission.

Passing this legislation saves Kentucky’s electric cooperatives more than $1 million annually and saves more than $30 million for electric co-ops across the country.

  • Protect the Power Marketing Administrations and Tennessee Valley Authority

The five Kentucky co-ops served by the Tennessee Valley Authority expressed concern about a Trump Administration budget item that would sell the assets of the Tennessee Valley Authority and the Power Marketing Administrations. This change would jeopardize the affordability of electricity for more than 100 million Americans. In addition, local managers of TVA co-ops explained to the lawmakers that TVA customers have already paid for TVA assets. Any privatization would ultimately make those local TVA customers pay for the assets again.

Members of Congress were encouraged to visit local co-ops in Kentucky. The Legislative Conference is an annual event. Local co-ops are encouraged to send representatives for the event. The Capitol Hill day is coordinated by Kentucky Electric Cooperatives.