Bright Idea Still Glows
October 7th, 2010 by Ruralite
Photo courtesy of National Rural Electric Cooperative Association.

Photo courtesy of National Rural Electric Cooperative Association.

Whether it is crossing arctic tundra to serve tiny fishing villages in Alaska or traveling stark dusty roads in Southeastern Oregon to serve remote cattle ranches, rural electric cooperatives cover a lot of ground.

They have to. Without co-ops, many Americans would have no electricity.

Within memory of many senior co-op members, electricity was at one time a luxury for rich people and city folk.

Although large urban areas had been lighted by electricity for nearly 50 years, by the 1930s, electricity still was not available at any cost for most rural areas.

Extending lines into the countryside was expensive, with no profit in sight for investor-owned utilities (IOU) that served more populated areas. In 1935, only 10 percent of farms enjoyed the “privilege” of electricity, and they paid dearly for it.

In many cases, farmers and their rural neighbors were forced to pay up to $3,000 per mile to build lines to their homesteads, then charged monthly rates as much as four times higher than what city dwellers paid. This was during a time when per capita income averaged around $1,800 a year.

All that changed in 1935 when President Franklin D. Roosevelt signed an executive order creating the federal Rural Electrification Administration (REA)—now Rural Utilities Service.

The goal of the REA was to provide low-cost loans, as well as engineering and administrative support to help electrify rural regions.

“Electricity is a modern necessity of life and ought to be in every village, every home, and every farm in every part of the United States,” Roosevelt said.

To meet the challenge, farmers and other rural community leaders joined forces to form electric cooperatives. A fee of $5 was collected from each family—making them members and owners of the co-op—to generate the capital needed to qualify for an REA loan.

Three-quarters of a century and more than 2.5 million miles of line later, electric co-ops are still defying the odds with a tried-and-true record of delivering affordable electric service to members.

It happens in places like McDermitt, a small town on a lonely stretch of highway with a dual personality, existing on both sides of the Oregon and Nevada border.

McDermitt—in both states—is served by Harney Electric Cooperative, based in Burns, Oregon, which specializes in small towns and long distances between members in its service territory of roughly 20,000 square miles.

It happens in places like Toksook Bay, on Nelson Island in Alaska, where wind turbines integrated with diesel generators have reduced the village’s use of fossil fuel since installation in 2005.

Toksook Bay is one of 53 villages served by Alaska Village Electric Coop-erative (AVEC), based in Anchorage, which has the largest service area in the world for a retail cooperative. Only one AVEC community is accessible by road. The other 52 villages are accessible only by airplane or marine vessel.

Not all cooperatives are this isolated. Suburban co-ops serve 12 percent of Americans and maintain 42 percent of all poles and distribution lines across the nation.

Even with their suburban counterparts, rural electric cooperatives serve an average of just seven customers per mile, or about $10,500 of business a year. Compare that with urban areas, where an average mile of line maintained by IOUs—built for profit—brings in $62,600 a year by serving five times the number of consumers.

The disparity is glaringly obvious, making member-owned cooperatives all the more important to consumers who champion local service, affordable prices and reliable infrastructure.

Seven Cooperative Principles
October is Cooperative Month, celebrating not just electric co-ops, but all cooperative businesses, from agricultural and financial institutions to grocery markets.

The modern cooperative movement traces its roots to a store started by weavers in the town of Rochdale (pronounced Rotch-dale) in northern England in 1844. The group was guided by a set of principles drawn up by one of its members, Charles Howarth.

Although stated in many ways, the seven cooperative principles require:

  • Voluntary and open membership.
  • Democratic member control.
  • Members’ economic participation.
  • Autonomy and independence.
  • Education, training and information.
  • Cooperation among cooperatives.
  • Concern for community.

The last principle might be the best. It is the reason co-ops were created in the first place.

Concern for community means helping with economic development, funding scholarships, supporting local charities and other countless ways co-ops work
to make life better in the areas they serve.

It is the principle that best reflects the heart of the cooperative difference.

Ruralite associate editor Mike Federman contributed to this report.