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COMMENTARY ARCHVES
   

JANUARY COMMENTARY
by Share Brandt

Statewide Milestone

This year the Wisconsin Electric Cooperative Association (WECA) celebrates three-quarters of a century of advocacy and leadership aimed at an affordable quality of life for rural communities. Seventy-five years ago only 10 percent of farms in American had access to electricity, and that was only because they were close to a town with a gas or electric power plant.

That’s when President Franklin Roosevelt approved the Rural Electrification Act and leaders emerged from farms in the dark to create Wisconsin’s statewide electric cooperative association. They saw a need for electricity in the rural communities and a law enabling them to bring lights and appliances into their homes and barns.

Dueling Business Models

Back then rural and farm were interchangeable terms. Today the lines blur; not all folks in a rural setting are farmers. Back then investor-owned utilities were not interested in extending service to farmers, nor did they want the Rural Electrification Administration to assist electric co-ops’ ability to provide reasonable-cost electricity to farmers—thereby competing for customers and energy resources. Building lines to pick up one or two customers was not attractive to companies with a for-profit business model; it was a challenge that only a cooperative, not-for-profit model could sustain.

Today it is still a challenge to deliver electricity at affordable rates in rural communities where there are on average 2 to 7 members (customers) per mile of line buying power. A power pole is a power pole whether a co-op buys it or an investor-owned utility with 35 customers per mile of line buys it; the cost is about the same. Engineering specifications will dictate the number of poles per mile to support the power lines. In some situations the engineering specs in rural areas may be more demanding based on the terrain, distances, and weather exposure of long spans of cable. In all cases safety is the number one criteria for line clearance, structural support requirements, and distance from public roadways.

A Cooperative Difference

There are other differences about the co-op business model that makes us unique. Co-ops are in business to provide services to a group of people who would otherwise not have affordable access to those services. Investor businesses are in business to make a profit for investors and naturally are service providers in areas of high demand for their products. They’re not so interested in serving areas of low market demand, since the profit margins would be low.

Co-ops are like investor companies in that we have to make enough money to cover our costs. That means we have to plan for contingencies like weather events and expected but uncertain regulations; our budgets have to reflect those contingencies. However, we differ again if those funds aren’t needed or we have higher-than-expected sales so there is a profit at the end of the year. Co-ops allocate those margins back to the members; an investor company returns those profits to investors.

It’s the co-op differences that brought rural leaders together to form the statewide organization and the reason WECA is relevant today. We are working with historian Michael Goc to capture the highlights of the 75 years of Wisconsin’s electric cooperative trade association. Michael is known for the published historical works on the Oshkosh fly-in, Dairyland Power Cooperative, Adams-Columbia Electric Co-op, and many others. We are looking forward to the story and pictorial history marking the challenges and innovative solutions of co-op leaders for the last 75 years.

 

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