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The United States is home to over 900 electric coops, and they’ve collectively been bringing power to rural communities for nearly 100 years.
Coops have unique opportunities and challenges because they’re member-owned and democratically operated. Their customers pay for power, but the services are “at cost.” Extra profits are usually reinvested into improving the infrastructure or given back to the members.
Higher Expectations, Lower Costs
While they operate differently than most IOUs, they still have similar concerns and challenges. Energy consumption keeps steadily increasing in the U.S., and peak demand is expected to grow by 38 gigawatts in the next five years (that’s the equivalent of adding another California to the nation’s grid). As plants age and new environmental regulations come into effect, the National Rural Electric Cooperative Association (NRECA) estimates over 110 gigawatts of always-on power is expected to retire in the next 10 years.
For reference: in 2023, U.S. power consumption was approximately 4,000 billion kWh. In 2025, the projected demand is closer to 4,198 billion kWh for just the United States. More AI, more data centers, more connections… it all demands more power.
Every electric company has to find strategies to provide those resources for their customers and meet new regulations for clean and green energy. However, co-ops have some additional challenges as they deal with aging infrastructure and navigate the tensions of maintaining low costs while producing more energy.
Because co-op boards are accountable
to their members (who might very well be their next-door neighbors)...
The effect of their projects, programs, and changes is far more personal and demands more transparency.
They have a greater obligation to find effective and efficient ways to improve resources.
Transparency For the People
Co-op boards are held accountable by their customers to actually execute member-supported initiatives. Co-op decision-makers are personally affected and personally know the people they serve. The choices they make about electric generation, clean energy projects, and grid hardening efforts directly affect the people around them every day. That creates a different level of pressure.
However, sometimes cooperatives can fall into a similar situation as local governments—while the community has power and a voice, they don’t always realize they can use that voice. If efforts aren’t made to communicate clearly with co-op members, they probably don’t know what’s going on.
To help encourage democracy and member action, there’s a rising trend that uses scorecards to evaluate how well rural cooperatives communicate and how transparent their practices are. Do they explain electric bills? Do they self-report on fuel mix? Do they share their bylaws, board minutes, and voting resources? What are their purchasing practices, and can members see if they source clean energy versus fossil fuels?
Because of the way co-ops are held accountable, supporting them might require tools or software that helps them communicate transparently with their members.
(There’s another layer of transparency as well. Rural cooperatives are eligible for government grants and loans, and should they receive one, there are various reporting and regulations to make sure funding is used appropriately.)
How Rural Co-ops Stay Effective
The projects and policies co-ops pursue are funded by the dollars of their members—good investments mean members should receive better services, and effective project management might result in dollars returned to members. To help make sure they’re being effective, some co-ops will collaborate with others in their state for operations and purchasing practices.
If materials are needed, co-ops might buy in bulk with one another so that everyone gets a better price. They’ll also work together and borrow ideas and processes from one another to leverage best practices.
There’s also potential for co-ops to collaborate with one another through statewide adoption of the same standards. Sharing legal processes and aligned language in agreements could help co-ops create a unified front within the state.
Co-ops operate so uniquely because their goals are to support their members and choose the most effective strategies. By focusing first on their members, they can prioritize clean energy, smart grid initiatives, and equipment upgrades. The goal is to better the experience for the consumer, and when that’s the emphasis everyone wins.
As energy consumption, greater expectations, distributed energy resources, smart grid technology, and more advancements keep shifting the distribution landscape, supporting co-ops requires more flexibility and nimbleness. It also demands creative solutions that help them communicate to their members the benefits of the work they do.
Thanks for reading! Cooperatives have done an incredible job providing power services to the rural communities. As energy demands change, we’re looking for ways to support and serve rural co-ops as they care for their members. What’s been your experience with co-ops?