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Electric cooperatives have served rural Americans for generations. Some are taking advantage of their member-owned status to begin weaning their regions off of fossil fuels.

Charles Cotton never gave much thought to the fact that he owns a piece of Jackson Energy Cooperative, the utility that delivers power to his home in Berea, Ky. His grandparents used to go every year to the co-op’s annual meeting and cook-out, where member-owners elect representatives and vote on cooperative business, but Cotton himself has never gone. He uses Jackson Energy simply because it’s the only utility serving his region.

But last November, Cotton’s membership paid off in a way he hadn’t expected: The cooperative gave him an energy upgrade, installing a plastic moisture barrier underneath his house and replacing his old furnace with an efficient heat pump. Cotton’s home now feels warmer and his electric bills have dropped significantly, but he never paid a dime up front.

Jackson Energy’s status as a cooperative led directly to Cotton’s retrofit. It is one of four rural electric cooperatives participating in a pilot program called How$martKY, run by the Mountain Association for Community Economic Development (MACED). The program will let Cotton slowly pay back the cost of the retrofit: His bill is smaller than before, but he’s actually paying a bit more than the cost of the electricity he uses. The extra charge is how he repays the cost of the retrofit.

It’s a scheme called on-bill financing—a way for people of all financial backgrounds to reap the benefits of energy efficiency without a big up-front cost.

Since on-bill programs like How$martKY are still experimental, MACED made a point of kicking off its pilot program by working with cooperatives. Investor-owned utilities are legally required to prioritize shareholder profits, and often can’t take on risky or unproven ventures. But electric cooperatives are required to maximize value for their members. That makes a cooperative potentially more willing to try out a program with an as-yet-unproven effect on the utility’s bottom line, but with the immediate potential to help member-owners and wean the region off fossil fuels.

“Because they’re customer-owned, because they’re intent on customer satisfaction, it made sense to start with them,” says Justin Maxson, president of MACED.

The program is a small step forward in a region of the country underserved by renewables, but one with the potential to grow.

“What we love is that it has a shot to make energy efficiency much more scalable,” says Maxson. “That’s especially important in Appalachia, where we’re so over-dependent on coal as our primary source of energy.”

Most of the nation’s electric cooperatives were founded on the idea that small steps can beget big change. Many such cooperatives date back to the 1930s (Jackson Energy started in 1938), when the electricity divide in the United States was stark: Approximately 90 percent of urban homes had power, and 90 percent of rural homes did not. For-profit utilities had little interest in building transmission lines in sparsely populated areas, so the federal government offered loans and encouraged farmers and ranchers to set up their own electric cooperatives. By the mid- ’40s, some 50 percent of rural Americans had electricity; by the mid-’50s, the vast majority did.

Now cooperatives form the largest electric utility network in the nation, serve some 42 million people in 47 states, generate $45 billion in annual revenue, and employ nearly 130,000 people. Approximately 78 percent of U.S. counties are served by electric cooperatives. Clean-energy advocates hope that network can be harnessed to bring big changes once again to America’s energy landscape.

Co-op electricity, like that of the nation as a whole, comes from a mix of sources that varies by region—and because of cooperatives’ strong presence in coal-producing regions, their reliance on coal-fired power is higher than the national average. Still, 90 percent of electric cooperatives have at least some renewable power in their portfolios, and 96 percent offer some sort of energy efficiency program. As of 2007, co-ops got 3 percent more of their energy from renewable sources than did the nation’s utility sector as a whole.

Cooperatives around the country are pushing to do better. In 2008, a number of them banded together to form the National Renewables Cooperative Organization, an umbrella group that supports local co-ops in making the switch to renewable energy. The organization found that renewables make sense for cooperatives for more than environmental reasons. Diverse power sources can insulate members from volatile prices, and renewable energy projects can create jobs in the communities where members live.

In Tennessee, a cooperative is offering members direct stakes in a new solar farm. A Montana cooperative helped a city in its coverage area rebuild a failing hydroelectric plant. In Minnesota, an electric co-op is researching ways to combine hydro and wind power to achieve a more stable power supply. An Indiana co-op is operating 14 landfill gas-to-energy plants. A cooperative in Hawai‘i, which was set up 11 years ago when the petroleum-powered, for-profit utility went up for sale, is planning to provide 50 percent of its power from renewable sources within the next 10 years. Lots more at http://www.csmonitor.com/World/Making-a-difference/Change-Agent/2013/0
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