To maintain a livable climate, it is imperative for the United States to implement immediate and substantial changes to its energy policies. The transition away from fossil fuels towards cleaner and more renewable energy sources stands out as a critical step in this direction. This shift is not only necessary for environmental sustainability but also for ensuring a secure and resilient energy future.
A recent report conducted by the Democracy Collaborative sheds light on the advantages of community utilities, especially those that are publicly or cooperatively owned, in spearheading the green transition. These community utilities are shown to be better positioned than their for-profit corporate counterparts to drive sustainable energy practices. However, the report also highlights the need for significant reforms within existing community utilities to unlock their full potential and maximize their impact.
Electric cooperatives, functioning similarly to investor-owned utility companies such as PG&E, play a crucial role in the energy landscape. The distinguishing factor lies in the ownership structure, where in electric co-ops, the ratepayers themselves, who are directly involved in electricity consumption and payment, serve as the owners. This model ensures a more direct and community-driven approach to energy management, fostering a deeper sense of accountability and alignment with the needs of the local population.
"According to Johanna Bozuwa, the executive director of The Climate and Community Project, in a cooperative, the shareholder is yourself and other members of your community."
Electricity is now accessible to over 99 percent of rural residents in the country, primarily through electric cooperatives. These cooperatives, which own and maintain 2.5 million miles—equivalent to 42 percent—of the nation’s electric distribution lines, cover three-quarters of the nation’s land mass and have assets exceeding $150 billion. In contrast to for-profit companies, rural electric systems are community-owned and managed, with rates and policies determined by boards elected by members. Local neighbors handle customer service and billing inquiries, and the money paid to cooperatives remains within the community.
Thanks to the establishment of sustainable energy (green) electric cooperatives, affordable access to electricity is now achievable in rural America. Presently, almost 1,000 locally owned cooperatives supply power to more than 12 percent of the nation.
The most success in sustainable power generating is community-scale solar. Rural electric cooperatives are spreading the word on how local clean power can save money, support communities, and provide inexpensive lifelong energy supplies. Community-scale solar is becoming the primary tool for rural electric cooperatives as they all transition from a centralized fossil-fuel-based energy system to an increasingly distributed, stored, and renewable system.
Economics: From 2005 to 2024, solar PV system prices fell nearly 90 percent. The cost of electricity from solar is extremely competitive with non-renewable energy. Given recent price declines, renewables save co-ops money.
Portfolio diversification: Renewable electricity can protect co-ops against uncertain energy prices.
Regulation: Cooperatives are striving to remain proactive in meeting mandates and regulations such as Renewable Portfolio Standards and the EPA's Clean Power Plan.
Member demand: Cooperatives, owned by their members, prioritize economic growth and environmental benefits by advocating for local clean energy. These organizations are voluntary and inclusive, welcoming all individuals who can utilize their services and are ready to embrace the duties of membership, without any discrimination based on gender, social status, race, politics, or religion. Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested. In other words, those who use the co-op more see more benefits.
The median distribution cooperative caters to 13,000 clients, with an energy consumption of 296 GWh and an average demand of 33 MW. This indicates that only a few distribution cooperatives are sufficiently large to engage in utility-scale solar projects. However, even smaller distribution cooperatives have enough demand to include community-scale solar photovoltaic systems. Additionally, while only a few cooperative-managed distribution substations have the capacity to integrate utility-scale generation, many substations are big enough to support community-scale installations.
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