The Power Behind the Power
Updated: Oct 31, 2020
Members & Rural Electric Cooperatives
In case you did not know, October is Co-op month. If you’re like most, this escaped you because every month you get an electricity bill, pay, and never give it another thought. Until recently that was certainly the case for me.
Turns out I’m a rural electric cooperative (Co-op) member in Montana. As the bills trickled-in over time I began to consider the significance of the word “co-op,” which is an organization or businesses that is owned by and operated for the benefit of those using its services. This means if you get your electricity bill from a co-op that you are a member, that you have a vote, and thus a voice in the operation of your energy provider.
If we look at the spectrum of suppliers across the US, it’s apparent very few electricity customers have this opportunity. However, many customers wish they could actively participate in decisions concerning their operations - think of the controversy surrounding PG&E in California or NorthWestern Energy in Montana. No doubt this stems in part from a lack of cooperative decision making.
The reality is, over the last few decades, many rural electric co-ops have become less innovative with less member participation. Without engaged customers, co-ops stagnate and can't embrace the next frontier of technologies which benefit members the most. To appreciate why this is important, a bit of background on how this ownership structure came to be.
Co-ops were the pioneering leaders behind the electrification and modernization of rural America beginning in 1935. They were founded on the cooperative principle of democratic member control, which makes them unique in that their customers are also their member-owners.
The stated mission of rural electric co-ops is to provide electricity in rural areas at affordable prices. Each is governed by seven cooperative principles and a board of directors that is elected by the membership. The board sets policies and procedures that are implemented by the cooperative’s staff.
Montana has 25 distribution co-ops that deliver energy in all 56 counties to more than 400,000 members. They are represented on the state level by the Montana Electric Cooperative Association, which lobbies the legislature, provides co-op training and controls co-op public messaging. The National Rural Electric Cooperative Association performs similar functions for all co-ops on the national level.
For the sake of their members, our co-ops must return to the principles on which they were founded and support rural economic progress. In 2020 this means thinking of new and dynamic ways to engage this generation of customers, all while considering the next frontier of energy sourcing.
In two words: clean energy.
Savings aside, energy industries like solar are powerful drivers of job growth in the US. Technological progress has propelled renewable energy forward, adding it to a long list of recent technological innovations - from the horse and buggy to the automobile, from landlines to cell phones.
Nationally, the burgeoning solar industry already out-employs both coal and oil extraction. In 2017 solar employed more than 260,000 people in the US, growing 25% from the year prior. Developing Montana’s considerable solar and wind potential is a forward-thinking economic development strategy.
Unfortunately, many Montana electric co-ops are missing the opportunity to develop energy efficiency and renewable programs. By opening the door to clean energy, co-ops can bring multiple long-term benefits to their communities - sustainable jobs and small businesses, lower energy bills, reduced energy loads, greater energy independence, cleaner air – all while keeping money in the community.
To fully realize these benefits, however, co-ops require informed leadership and engaged members that push for innovation. Across the board we see that many of Montana’s coops stifle member participation. They don’t allow members to attend board meetings, they don’t post their board minutes online for members to review, and voting access varies greatly - often making it difficult for member owners to participate. This must change.
The economics of energy are rapidly evolving. Coal was the cheapest energy source of the last century, but renewables are increasingly cheaper than coal. In Montana, NorthWestern Energy’s own filings with the Public Service Commission show that coal is the costliest energy source in its portfolio while wind farms, like Judith Gap, are the most cost-effective for customers.
Many co-ops are largely coal-dependent today, but have the opportunity to offer more efficient, cleaner and cheaper alternatives. This transition is possible, but it will require member engagement and participation to drive forward. In Montana this means policies that enable members to pursue their own small-scale renewable energy generation, while also finding ways to invest in their own renewable infrastructure.
With the installed price of solar dropping 65% in the 8 years leading up to 2018, the math is easy. By installing a solar array on your home, in Montana you can lock-in your price of power for 25-plus years, save money on your electric bill and become more energy independent. Many farmers and ranchers are also taking advantage of solar for stock-water pumping and powering center-pivot irrigation systems.
Another way to help people save money on utilities is retrofitting the many rural homes and buildings with inefficient energy usage, and correspondingly high bills. Energy efficiency improvements will save people money in the long run, but the main challenge is financing the up-front conversion costs of those improvements.
"On-bill financing” for clean energy upgrades is one program that some rural electric cooperatives across the country offer to save members money. This effectively allows the utility to incur the cost of the enhancement, which is then repaid on their utility bill.
Though dozens of rural electric co-ops nationwide offer on-bill financing, Flathead Electric is the only one within the state of Montana that provides this option. Flathead Electric’s residential "energy fix" loan program was introduced in 2009 and over 20.74 megawatt hours have been saved between 2009 and 2017. That is enough energy to power about 20,000 homes a year.
Get engaged! That means attending annual meetings, participating in elections, running for the board, advocating for widespread member participation by ensuring voting-by-mail, pushing for transparency through publishing of by-laws and board meeting minutes online, and electing leadership poised to harness clean energy innovations that drive affordable rates.
So, if you’re a Co-op member, remember YOU ARE the power behind the power.