Rural electric co-ops: Confronting the world of renewables

Electric cooperatives pioneered rural electrification efforts in the New Deal era. Today, rural electric cooperatives can again lead the way in improving the quality of life in rural communities by embracing renewable energy. For various reasons, these cooperatives haven’t yet adopted renewables to the extent they could. (For more background on this issue, click here.) To get more in-depth insight into the current situation with rural cooperatives and renewables, CPN reached out to Rory McIlmoil of Appalachian Voices.

Appalachian Voices is a nonprofit organization that was founded in 1997. It now has offices in four states: North Carolina, Kentucky, Virginia, and Tennessee. It publishes the newsletter The Appalachian Voice with a 61,000-copy distribution within a nine-state region. The organization empowers people to protect Appalachian communities through grassroots campaigns. In pursuing this mission, Appalachian Voices has won considerable recognition.

We spoke with Rory about the barriers cooperatives face when trying to bring renewable energy to members. One of these barriers is the opposition of NRECA, the trade association for rural electric cooperatives, to policies that put renewable energy on a level playing field with other electricity sources. The organization opposes net metering, feed-in tariffs, portfolio standards, and Clean Air regulations. Yet, low-income member-owners have much to gain from adopting renewable energy. We asked McIlmoil why this association was taking such a hard line.

“It’s mainly due to the fact that conservatism is more prominent in rural areas in the nation,” said McIlmoil. He indicated that the politics of cooperatives drive their activities and those politics are themselves largely driven by the politics of the region. Another factor is anxiety over possible loss of revenue, due to the difficulty cooperatives have in covering their costs.

“There’s a sincere concern that any loss of revenue could hurt the cooperative and its membership,” he said. “So it’s a conflicting situation, but it is driven by politics.”

Rural cooperatives, on paper at least, make decisions democratically through members’ votes. Turnout for these elections is typically quite low. McIlmoil was quoted in an article as saying that there is low turnout in these elections because “…co-op members don’t quite understand what their rights and responsibilities are as member-owners of the utility.” We asked him why he thinks this lack of understanding exists, and if he believes the low election turnout has an impact on these co-ops’ lack of enthusiasm for adopting renewables.

“It’s going to be case-specific from co-op to co-op,” he said. Some, he observed, are good on renewables, but don’t inform their members very well. Some cheat their members; others help them. But it doesn’t seem to matter, all have low turnout at elections. Cooperatives differ on how they communicate with members. Some are transparent; others are not. Some schedule meetings for the convenience of members, such an on weekend or evening hours; others fail to do so. He mentioned Pedernales Electric Cooperative (PEC) and Roanoke Electric Cooperative as two cooperatives that do a lot to engage members. “But their memberships may consist of a more low-income, more blue-collar workforce,” he added.

It seems that members of cooperatives are often more interested in renewable energy than are their boards. For example, we at CPN frequently receive messages from cooperative members who ask, “How can we change our board or our cooperative’s policies on renewable energy?” We asked McIlmoil what members should do.

“The members have to take that first step,” he said. “Ultimately, if a handful of co-op members bring up an issue, they can set up a meeting, or do the same at annual meetings.” Board meetings may or may not be open, but if they are, the members can bring up the issue.

“When we first sat down to discuss on-bill energy efficiency financing with Blue Ridge Electric Membership Corporation [where Mr. McIlmoil is a member-owner], they said it was something they didn’t think their members wanted. Appalachian Voices launched a petition to the community and also went to the media to get its message out, and found that there was an interest. In more cases than not, you’re going to have to organize. Sometimes, the board is unaware of the issues, and if you inform them, they might be more receptive than management.”

Rural communities clearly want more solar, so we asked McIlmoil if he thinks this message is starting to get through to the utilities. “It’s very clear from a number of studies that distributed energy helps bring stability to the grid,” he said. “You are eliminating all the wasted energy that occurs from transmitting energy from its source to the user. The more rural a system is, the greater benefit from avoiding this wasted energy.” He didn’t think the message about distributed generation was getting through, but did believe that utilities in general are starting to rethink their business model and that it is something rural cooperatives are starting to look into.

“Blue Ridge [Electric Membership Corporation] is looking into a community solar program, leasing solar capacity to its members,” he said. “Some are considering rooftop solar as well.” He says that this is not the only way the cooperatives are innovating.

“Lots of them are looking to expand into becoming broadband providers. Many have systems in place now.”

Some cooperatives are currently adopting energy efficiency programs. Model programs such as the “Help My House” pilot program, developed by Central Electric Power Cooperative, Inc., and the Electric Cooperatives of South Carolina (ECSC), are an example of this. We asked McIlmoil whether this could lead to a dialogue in favor of renewable energy.

“Yes,” he said. “I think that electric co-ops are very cognizant to do energy efficiency first… They don’t see efficiency as a revenue generator, but solar may be, so one can lead to the other.”

Could on-bill financing (such as in the Help My House program) be adapted for solar, not just energy efficiency?

“Yes… but solar is trickier, because it costs more per kWh than energy efficiency. You can do on-bill financing for anything; the issue is to make it financially viable for the customer. There can be and I’m sure that somewhere there is an on-bill financing model for solar,” said McIlmoil.