A Magazine about the Hudson Valley’s local economy, published by Hudson Valley Current.

The Lesson in Rural Electrical Cooperation

By Paul Smart

Think your broadband’s bad? Worried about the political battles over net access, let alone net neutrality?

How about we all step back a century to the early summer of 1918, when only 35 percent of American households had electricity, mostly in cities, and less that 3 percent of our 6 million or so farms were hooked up. The latest breakthrough involved the creation of electrical generators at the mouths of coal mines, but when coal shortages brought on by World War I efforts combined with rising amounts of coal theft to create a summer energy crisis, everyone realized more needed to be done.

At first that occurred naturally, through market forces that became known as IOUs, or Investor Owned Utilities. By 1929, nearly 68 percent of American homes were electrified, a figure that was touted as being nearly 90 percent when rural parts of the nation were not counted (the twenties also being the decade when America finally became an urban-majority nation). But then the Great Depression occurred, and as recovery proved increasingly difficult for large swathes of the nation, and especially American farms, the government was finally forced to step in and address our huge rural vs urban electric divide with the formation of the Rural Electrification Administration in 1935.

The effort had gotten its start in a number of Midwestern states, then the center of American progressive action. A massive federal initiative for rural electrification got underway in the early years of Franklin Delano Roosevelt’s New Deal administration via the building initiatives of the Tennessee Valley Authority in 1933. This all led to the creation of a Rural Electrification Administration (REA) by executive order, authorized by Congress in the Rural Electrification Act (later folded into the U.S. Department of Agriculture as well as passage of the Public Utility Holding Company Act of 1935 (PUHCA), which allowed for regulation of all electrical utilities by either limiting their operations to a single state or forcing them to deal with specific geographic regions. The former still exists in the form of rural electrical cooperatives around the nation, some in our region; and openings for energy-buying coops to this day.

The latter was repealed by the Republican-controlled 109th Congress in 2005, and replaced by the Energy Policy Act of 2005 (which provided a number of alternative energy carrots while taking a stick to most protections against fracking and allowing for a new push for coal).

But what of those rural energy collectives?

Back during the New Deal, the REA helped spread electricity throughout rural America by offering loans and expertise, and encouraging the formation of rural electrical cooperatives to maintain ownership of electricity by those who use it, and not the IOUs that had refused to spread their largesse to such areas. This led to the 1942 founding of the National Rural Electric Cooperative Association (NRECA), an organization that now represents the interests of over 900 such cooperatives serving over 40 million in 47 states, with a growing emphasis on renewable energy.

The way such cooperatives work (the nearest to us being in Delaware and Otsego counties, to the north, and The Bronx’s Amalgamated Housing to our south) is to make each customer a member and owner of the business, whose profits are either reinvested or distributed as credits to cooperative members/customers. Many have joined together to achieve ever-greater energy-purchasing efficiencies, and all operate under the set of ideals set forth by the Rochdale Society of Equitable Pioneers in England in 1844, later updated by the International Co-operative Alliance in 1966.

What are those principles?

They started out as including: Open membership; Democratic control (one person, one vote); Distribution of surplus in proportion to trade; Payment of limited interest on capital; Political and religious neutrality; Cash trading (no credit extended); and Promotion of education. When changed in the 1960s, they became (and stay) as follows: 1. Open, voluntary membership. 2. Democratic governance. 3. Limited return on equity. 4. Surplus belongs to members. 5. Education of members and public in cooperative principles and 6. Cooperation between cooperatives.

On a truly local level, the cooperative style of negotiating prices from energy providers is present in the area via the five-year old Mid-Hudson Fuel Buying Coop, which recently closed its membership buy-in for the season at incredible savings (email mhfbcoop@yahoo.com or go to https://www.facebook.com/groups/MidHudsonFuelBuyingCoop/ for more information), and for natural gas users, the Energy Cooperative of America, which also negotiates electric costs for most of the big energy companies in our area, excepting Central Hudson (a similar, even more radical sharing mechanism for natural gas users is currently underway in the Philadelphia area, where the Energy Coop is establishing major biodiesel plants, as well as in Indiana, where a consortium of school districts is looking into spreading the savings it’s negotiated for itself.

            For electricity, cooperative purchasing has a way to go. Locally-based Citizens for Local Power have been advocating for Community Choice Aggregation — which would allow communities to leverage their combined demand to purchase the kinds of power supply and energy services that meet their needs, goals and values. But the state has yet to allow more than a few conservative research projects into the idea as yet. Electrical cooperatives on the lines of the Delaware County Electric Cooperative have attempted to expand in recent years via Touchstone and other federally-approved nonprofit efforts, but have yet to make a major push into the Hudson Valley.

            For solar energy, NYSERDA (the New York State Energy Development Authority) has been working with regional efforts such as Sustainable Hudson Valley to establish community-serving solar farms throughout the area, although efforts to find out progress on such entities in the Rondout Valley and Kingston area have proved opaque of late. Ditto Google’s hugely-announced Dandelion efforts to make geothermal heating available to communities such as Rhinebeck, which okayed digging along some of its streets for shared ground loops last December.

            Speaking of energy cooperative’s innovations, much seems to be happening in regards to micro-hydropower. Think of the energy in one’s gravity-based water lines. Or those other lines taking wastewater from one’s house.

While the biggest such systems have been introduced, with special piping, in Portland, Oregon and Vancouver, Canada, little farmer-owned Delaware County Electric Cooperative formally proposed a Western Catskills Hydro Project a decade ago that would power some 15,000 Catskills-region homes and businesses by building small hydro facilities augmented by in-pipe turbines. New York City, which is in charge of the water in the Catskills, nixed the idea for security and safety purposes, but then announced a hydroelectric facility at one of its Delaware County reservoirs four years ago, working with similar engineering ideas

  Whether accepted by the big guys on all level of government or not, it seems our energy futures may be best addressed cooperatively, whether welcomed by all or not.