January 19, 2017

How cooperatives can help economic recovery

Nathan Schneide, Yes Magazine - At the start of the Great Depression, much of the U.S. countryside had no electricity, even after most cities and towns had been electrified for decades. Power companies refused to make the investment, which would furnish lower profits than urban projects; some even claimed, astonishingly, that rural communities were better off in the dark. I don’t think that my grandfather, who grew up on northern Colorado beet farms without electricity, would have agreed.

Rural Americans took the matter into their own hands. Well before the Great Depression, they started forming electric cooperatives—utilities built, owned, and governed by customers themselves. These efforts added to a long legacy of rural cooperation as a means of economic inclusion, including 19th-century organizations like the Grange and the Farmers’ Alliance, whose purchasing and marketing cooperatives enabled farmers to compete in markets increasingly controlled by urban capital. Electric co-ops started taking advantage of hydroelectric dams built under President Franklin Roosevelt’s New Deal to distribute cheap, renewable power, and the federal government finally recognized their success enough to invest in it. In 1936, the Rural Electrification Act provided low-interest loans and technical support; by the end of World War II, around half of U.S. farms had electricity, up from around 10 percent a decade earlier. It turned out that, without investors clamoring for profits, powering the countryside was a perfectly sensible business proposition.

Today, nearly a thousand local cooperatives provide electricity to the inhabitants of around three-quarters of the landmass of the United States. They have formed larger co-ops in order to build and manage their own power plants. They’ve formed cooperative banks to finance new projects, lessening the need for public loans. Together with the rural phone co-ops that emerged in the same period, some electric co-ops are now bringing broadband internet service to underserved areas. Some have also become leaders in transitioning to renewable energy sources.


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