Some are coming clean, some aren’t. Why you should care.
(Revised 02/24/2025)
The Cooperative Society Newsletter
February 2025, Issue 51
By E.G. Nadeau, Ph.D.
Did you know that there are about 900 rural electric cooperatives in the United States serving 40 million people (over 10% of the US population), including individual households, farms and other businesses? These co-ops own over 40% of all the distribution lines in the country.
A little historical background
Most of urban America was electrified by 1920, but by 1932 only about 10% of rural areas had access to electricity. Utility companies did not see the potential for profitability in rural America because of the long distances between hook-ups. It was only through intense lobbying by groups representing rural America, especially farm organizations, that the federal government approved the Rural Electrification Act in 1936, which provided low-interest, long-term loans to bring electricity to the countryside. Even with these federal incentives, most for-profit utilities chose not to take advantage of them (and, in fact, many of them boycotted the program).
That’s where rural electric cooperatives come into the picture. Community by community, rural residents and organizations rapidly began to sign up and make commitments to form and join new local electric co-ops.
The start-up of each of these co-ops was a eureka moment for the beneficiaries. Many rural residents in the late 30s and the 40s and 50s remembered exactly what they were doing “when the lights came on.”
These co-ops are organized in two main tiers – local distribution co-ops and generation and transmission (G & T) co-ops. Coal has been the primary source of energy for electricity for most of their history.
Two flies in the ointment
In addition to the many benefits of rural electricity, especially for women (washing machines, refrigerators, pumped water for indoor plumbing, etc.), there were also less readily apparent downsides. As is often the case with large organizations or networks of organizations, over the years, RECs gravitated toward centralized decision-making, with the large generation and transmission co-ops (and their political allies) at the top.
Those RECs that were dependent on coal and other fossil fuels for energy also became major greenhouse gas emitters. They and other dirty-energy emitters contributed to the climate change crisis the world is now facing.
Increased centralization and greenhouse gas emissions feed off of each other. Beginning in the early 2000s, a number of REC leaders chose to “fight rather than switch” when it came to their organizations’ fossil fuel dependencies. This resistance came despite the realization in the past decade or so by many distribution co-ops and their members that clean energy sources such as solar, wind, hydro and battery storage generated almost no greenhouse gas emissions and, in most cases, were less expensive than dirty energy sources such as coal, natural gas and oil.
Thus, today’s RECs can be divided into two main camps – clean energy co-ops and fossil fuel co-ops – with a few undecideds in between.
A few examples
My favorite REC is the Kauai Island Utility Cooperative. It is one of the newest additions to the REC family, having bought out its for-profit predecessor in 2002. It currently provides electrical energy from a mix of fossil fuel and clean energy sources. In 2023, almost 60% of its energy came from renewable sources. The Kauai REC is committed to generating 100% of its energy from renewables by 2033.
In contrast, Hawaiian Electric, a for-profit, monopoly utility has a different story to tell. It provides electricity to all of Hawaii’s major islands except Kauai. Despite the advantages of clean energy, Hawaiian Electric has a very weak net zero electrical energy target of 2045. Most of its electricity is fueled by diesel at a cost to the consumer of about $.43 per kilowatt hour. Homegrown solar, wind, and hydropower are about three times cheaper and much cleaner. Hawaii Electric is driven primarily by profit. It has no incentive to switch from expensive diesel fuel to clean energy sources. The company and its shareholders make more money under the current arrangement.
Tri-State Generation and Transmission Association serves about one million customers in parts of Colorado, Montana, Wyoming and New Mexico. It is a good example of a large secondary co-op that recently made the decision to transition from primarily fossil fuel energy to primarily clean energy. Its near-term goals are 50% clean energy in 2025 and 70% in 2030.
Dairyland Power Cooperative – serving parts of Minnesota, Iowa, Illinois and Wisconsin – is a G & T co-op that is in the “undecided” middle. After fighting for years to build a new natural gas plant in northwestern Wisconsin, Dairyland all but abandoned that goal in favor of more clean energy projects. But, thanks to the U.S.’s new steamroller-in-chief, and despite strong local opposition, the plant is being “fast-tracked” for approval.
Basin Electric, the largest G & T in the country, for the most part, still has its head in the sand when it comes to a clean energy transition. Despite having run afoul of the Federal Energy Regulatory Commission in 2024, Basin has just announced that it is planning to build a 1500 megawatt natural (fossil fuel) gas plant in North Dakota, ignoring the strong likelihood that a combined wind, solar and battery storage project would have been far cheaper to build and operate. Under the Trump administration, the co-op probably won’t have to worry about federal pushback on this greenhouse gas-emitting behemoth.
Conclusion
With our recently coronated, “drill, baby, drill” president, the nation’s Rural Electric Cooperatives almost assuredly will not be burdened by stringent federal clean energy oversight. But, as member-controlled cooperatives, they are likely to continue to face opposition to relatively expensive, greenhouse gas-emitting fossil fuel projects from their own members/customers. That would be bottom-up democracy at its best.
This article was revised on 02/24/2025 to reflect new developments with Dairyland Power Cooperative