Kirk Johnson and Alan Spen at 2008 CEO Closeup. (Photo by Michael Kahn.)

Leading Wall Street analyst, Alan Spen, has called on electric utilities to deal with climate change on their own, before Congress does, as the need to address the issue becomes increasingly prominent.

Alan Spen, a managing director at Fitch Ratings Service, gave this message to co-op executives at the recent 2008 CEO Close-Up meeting on Jan. 16. “You can’t wait and sit back for the federal government to come up with the answer. As we’ve done in this industry, you have to—to some degree—move forward on your own,” he explained.

“There are a lot of formidable issues and challenges that the electric industry will face,” added Spen, a 30-year veteran of the ratings industry. “They’re very different from the past.”

The nation is in the early stages of changing its energy policy, he said, noting that Washington has been focusing more on other issues, such as Iraq and health care. “That means more patchwork…more probably done at a state and local level for some period of time.”

“But it will become more important,” Spen added. “Climate change, greenhouse gas—that will become a massive issue.”

Spen also urged the co-op leaders to continue educating consumer-members “about the real world challenges that you face.

“Rates are going up, costs are going up to your customers—and they need to be aware of that in advance,” he said. “Better to do that today than to surprise them later on.”

As for what interest businesses have in addressing climate change, Kirk Johnson, NRECA vice president for environmental policy, cited a number of examples.

“Siemens wants to sell more efficient power production equipment,” Johnson said. “You see the Wal-Marts of the world with their campaigns trying to get consumers to buy more efficient products, such as compact fluorescent light bulbs.”

“Some businesses are hedging or playing defense,” he noted. “People like Duke Energy are at the table because they want to protect their interest.”

But Johnson also pointed out that co-ops have a very different view.

“Our perspective is to protect those consumer-members at the end of the line,” he said. “That’s the perspective that will help us go through this debate. That cooperative difference will make a real difference for us.”

Article by Michael W. Kahn; reprinted with permission from Electric Co-op Today.