Why Aren’t Rural Electric Cooperatives Champions of Local Clean Power? John Farrell
November 28, 2014
When it comes to ownership, there are few better structures for keeping a community’s wealth local than a cooperative. So why is it that America’s rural electric cooperatives are tethered to dirty, old coal-fired power plants instead of local-wealth generating renewable power?
There are a lot of answers to this question, but it might start with this:
electric cooperatives aren’t quite like other cooperatives.The Seven Slipping Cooperative PrinciplesCooperatives around the world adhere to the “Seven Cooperative Principles,” but electric cooperatives (at least in the United States) fail on several of these principles. 1.Voluntary and open membership.
Nope. If you want electric service in cooperative territory, you sign with the cooperative. While it’s no different than rules for other types of utilities in the 30 states that grant utilities a monopoly service territory, it violates the principles of cooperatives.
2.Democratic control (one member, one vote).
Not always. Some electric cooperatives award one vote per meter, and some customers (e.g. farmers, industry) have more than one meter. Furthermore, many cooperatives filter potential board candidates with “nominating committees.” And look, here’s a board election with no opposition!There’s also a big gap between cooperative member support for (paying more for) renewable energy and cooperative behavior. This 2013 survey in Minnesota, for example, shows little separation between urban and rural areas (where cooperatives are dominant) in support for renewable energy, yet cooperatives opposed every bill favoring clean energy in the 2013 legislative session.
3.Members control the capital of the cooperative.
4.Cooperatives maintain their autonomy and independence even if they enter into agreements with other entities.
Questionable. Many cooperatives sign 40- or even 50-year purchase contracts with power suppliers to supply 95% of their entire sales, mostly from coal-fired power plants. Standard and Poor’s explains this in an evaluation of a Seminole Electric in Florida, a generation & transmission cooperative that sells to rural cooperatives. In their words, one of the utility’s credit strengths is, “A captive retail market and the ability to set rates through take-and-pay, all-requirements wholesale power agreements with nine of 10 members through 2045.”
5.Cooperatives provide educational opportunities to their members and the public on the benefits of cooperatives.
Questionable. If you read rural electric cooperative newsletters, you’ll hear a lot about climate change but you’ll often find the phrase in quotes
6.Cooperatives work best when cooperating with other cooperatives.
Questionable, refer to #4. Some of these power suppliers are “co-ops of co-ops,” but these long-term contracts have tethered the economic fortunes of cooperative members to the vagaries of the coal market (see below). More than any other type of utility (public or investor-owned), rural electric cooperatives are reliant on coal for their electricity fuel. The average U.S. utility is 38% coal-fired power.
rural electric cooperatives reliant on coal - public citizen coal prices 2000-11.001 7.Cooperatives work for sustainable development of their community.
Not enough. Most cooperatives rely heavily on imported power purchased on long-term contracts with the goal of cheap power, but that ironically leave them at the mercy of unfettered price increases. They also have missed an enormous economic development opportunity from renewable energy. For example:Renewable energy provides significant economic impacts ($1 million per megawatt of wind, $250,000 per megawatt for solar) with multipliers for local (i.e. cooperative) ownership (up to 3.5 times more local economic impact, and twice as many jobs).
Wind and solar provide more jobs per megawatt of power capacity, as well. RE-fossil-jobs-per-MW Finally, rural electric cooperatives have organized a 1 million comment campaign against EPA regulations of carbon pollution from power plants. Hardly a commitment to “sustainable development.”
How Can Cooperatives Change?Restoring their 7 principles could do a lot. Improving their structure so that the cooperative directors reflect member opinion on renewable energy would restore the principle of democratic control. Avoiding ridiculously long power purchase contracts would provide local cooperatives with real autonomy and control of their energy costs and options. Broadening their focus on economic development beyond cheap power to include renewable energy would make “sustainable development” much more realistic.
Can it happen? It already has, in Iowa and on Kaua’i, and there are more tools that ever at their disposal. But as with electrification, no one will do it unless they do it themselves.
This piece originally appeared on ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.http://www.renewableenergyworld.com/rea/blog/post/2014/11/why-arent-rural-electric-cooperatives-champions-of-local-clean-power#comment-1376711 Comments
A. G. Gelbert November 28, 2014
Excellent article! Thank you.
I would add that the corporate (greed is good and so is profit over planet) 'business' model has infiltrated cooperatives.
We have a grave situation where our environment AND OUR DEMOCRACY have both been degraded to a mere caricature (for propaganda purposes - see lipstick on a predator pig) to keep we-the-people in our state of ignorance about our 24/7 fascist fleecing.
Greed is bad. It's a cancer on society and the biosphere.
We either change the way we deal with each other and the other life forms that inhabit this planet in order to survive and thrive or we continue our suicidal and psychopathic path of conscience free conquest and mendacious accounting tricks criminally contrived to convince logic challenged economists that "creative destruction" is not an oxymoron.
Don't expect help from our Corrupt and irreparable Court System; it's bought and paid for by the 'greed is good' corporate+government (see the definition of Fascism) elite.
You don't believe me? You think this is hysterical hyperbole?
Read on: The Corporate Business Model is Psychopathic (ONE MINUTE): http://viewrz.com/video/the-corporate-business-model-is-psychopathic
All about Fracking LEGAL chemical POISONS (3 minutes 31 seconds): http://viewrz.com/video/all-about-fracking-legal-chemical-poisons-1
Fossil Fuel Fascism in Action (3 minute lesson on our Orwellian world): http://viewrz.com/video/fossil-fuel-fascism-in-action Fossil Fuel Fascist Jolly Roger "business" model (8 minutes): http://viewrz.com/video/fossil-fuel-fascist-jolly-roger-business-model
Fossil fuel Government 2 minute Video Clip from "The Age of Stupid" Video: http://viewrz.com/video/fossil-fuel-government FDR on Trickle Down "Economics" http://viewrz.com/video/fdr-on-trickle-down-economics Here's a modern example of what happens when you trust the Court System to do what they are supposed to. There is NO Ubi Jus, Ibi Remedium any more in the USA when it comes to environmental damage that brings sickness and death to people and other life forms: The Exxon Valdez PITTANCE of a settlement: PROOF we have a Fascist Fossil Fuel Government AND the irreparably DYSFUNCTIONAL Court System is its HANDMAIDEN http://renewablerevolution.createaforum.com/fossil-fuel-folly/fossil-fuels-degraded-democracy-and-profit-over-planet-pollution/msg2122/#msg2122
How about Corporate control of what you eat by manipulation of our "LAWS"? See Big Ag Fascist Heaven below: Fascist Big Ag uses Food Disparagement Law and the Patriot Act to threaten Truth tellers! http://renewablerevolution.createaforum.com/renewables/sustainable-food-production/msg2033/#msg2033 Read what this giant polluter and OWNER of most of the fracking machinery says about how to 'handle' environmental legislation: Schlumberger N.V. (SLB): The BIG OIL Planet Polluter you never heard of http://renewablerevolution.createaforum.com/fossil-fuel-folly/fossil-fuel-propaganda-modus-operandi/msg2088/#msg2088
Yes, the plutocratic marriage of corporate and government power over the Court System has been there for quite some time. But now our survival is threatened by this unsustainable paradigm of the worship of Conquest: Supreme Court Justice Oliver Wendell Holmes Jr. on what the LAW is ALL ABOUT http://renewablerevolution.createaforum.com/who-can-you-trust/corruption-in-government/msg2045/#msg2045 In any LAW dictionary you will learn that the term "Legal" is the antithesis of the term "Equitable". Look it up if you do not believe me.
The Lady Justice Legal Scales mean the OPPOSITE of what you think they mean http://renewablerevolution.createaforum.com/who-can-you-trust/corruption-in-government/msg2041/#msg2041 Don't count on our Court System to defend Americans from Fascism - Here's why the solution to Corporate Profit over Planet is EX CURIA http://renewablerevolution.createaforum.com/who-can-you-trust/corruption-in-government/msg2019/#msg2019
Excellent Comment in response to an Anonymous fossil fueler that pooh pooed renewable energy benefits that John Farrell touted in the above Renewable Energy World article:
John Ihle
November 29, 2014
Anon, the hundreds of millions of dollars/year that are exported out of communities and into neighboring states and provinces may be or are better spent to create local jobs. When you spend more money locally some of that money benefits local stores and businesses and in fact create or support indirect jobs in addition to direct jobs.
Also, local taxes increase (which otherwise you're paying to other states). I know a lot of not wealthy people that would support renewable energy even if their rates rise, depending upon how far they rise (if they rise). It depends how those polls are worded. They've done polling in my state which supports my statements (including a majority of ratepayers would pay some percentage more for electricity for cleaner energy that has more local content) as polling in your area may support your statements (maybe?) and you have no crystal ball to suggest what utilities will "move to" or how lower cost renewables including distributed generation will impact utility business models vs transmission and long distance generation (when you can do it yourself for cheaper).
Renewables keep dropping in cost while fossil fuels continue to rise. Subsidies are doing exactly what they're supposed to do. They are helping to bring the cost of renewables down. They are relatively clean, wind and solar have no emissions (which is important to many) other than those related to manufacturing, lubricants used and perhaps decommissioning which is or may be negligible.
I am a member of an electric cooperative. After reading the article you apparently missed some points . Electric cooperative business models have morphed from those days which the members controlled them . Probably through member apathy, or maybe the business of our lives most members don't pay attention to cooperative business matters or perhaps the G&T's as well as some local cooperative managers don't want us to know that much (because we "interfere" in a very complicated industry) .
Different things matter to different people and obviously cost of electricity is a big one but it may not be the biggest one. I think it depends on certain important factors. However, it does no one good to make decisions based on erroneous information generated by G&T's and/or other associations that don't necessarily serve the better interests of the local members. Each cooperative should serve the better interests of their members and those members should be making decisions cooperatively. That's a cooperative. One thing that has bothered me is how "parent" G&T "non profit" for profit (sounds like an oxymoron ) businesses make several hundred million investments and billion dollar investments (with Wall Street) for the good of their member cooperatives. They are dubious investments, ie for the good of their members , to saddle with debt (through long distance transmission and generation investment) often 30 years or more, at a time when the cost of DG and clean energy is coming down and the local benefits along with participation was/is totally ignored.
And that is exactly what happened with my local cooperative and the G&T who serves us with locked in contracts which a small board approved without properly informing to their members.