[RECs are] a vital resource for advancing the environmental, economic, and social justice needs of our communities. —Derrick Johnson, former executive director of One Voice Mississippi (and now president and CEO of the NAACP), explaining One Voice’s support of the state’s REC member-owners
About 40 years ago, a right-wing codger named Eddie Chiles became a momentary political celebrity in my state by buying airtime on hundreds of radio stations to broadcast his daily political rants. Having made a fortune in the Texas oil fields, he pitched himself as a rags-to-riches, self-made success story. “I’m mad Eddie,” as he was known, repeatedly proclaimed that he was “mad” about big government—particularly federal programs that taxed him to help poor people, who should help themselves by becoming oil entrepreneurs like him. It’s simple, he instructed in the tagline to his tirades, “If you don’t own an oil well, get one.”

Well, maybe you can’t afford an oil well, but what if you could own something even bigger—an entire electric utility? What if you controlled an energy business that’s also an economic development engine and a grassroots force for advancing social justice. You wouldn’t own it all by yourself, but you would indeed be a full-fledged owner, with a voice on everything from hiring to setting rates, from green energy to community investment.

This empowering populist possibility has quietly existed for millions of Americans since 1937, when FDR’s New Deal helped people create a vast network of member-owned and -run rural electric cooperatives (RECs). While the barons of corporate-owned utilities serviced densely populated, easy-to-wire cities, they ignored rural areas as unprofitable, leaving families, businesses, schools, and communities literally in the dark. Co-op ownership offered a bridge across this rural gap in our country’s vital infrastructure—and the people rushed to cross it. Before the New Deal, some 90% of farm families had no electricity. By 1953, just 16 years later, more than 90% of them were wired, opening rural America to a world of new economic, social, and cultural opportunities.

Today, the nearly 900 RECs across the land remain powerful community engines. Owned not by Wall Street hucksters, but by local members, they:

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  • Provide electric power to some 42 million member/owners in 47 states (including in 93% of US counties with persistent poverty).
  • Collect $45 billion a year in revenues.
  • Own and maintain 42% of our electric distribution lines (covering 75% of the USA’s land mass).
  • Own nearly $175 billion collectively in assets.
  • Maintain a $4-billion-a-year payroll—providing pay checks for some 71,000 rural employees.

Energy democracy

Cartoon by Brian Duffy

Cartoon by Brian Duffy

Co-op electricity has transformed rural America, but the co-ops offer something even more electrifying: democratic power.

By law, every household that uses the electricity is a member and can vote for a board that has actual decision-making authority to control resources including cash flow, good jobs, a customer base, facilities, and financial acumen. Moreover, unlike the corporate ethic of “shareholder supremacy” (in which maximizing profits of investor elites reigns supreme), these decentralized, grassroots utilities were guided by an egalitarian ethic, formulated in 1937: the seven “Rochdale Principles” of cooperative organization:

  • Voluntary and Open Membership
  • Democratic Member Control
  • Members’ Economic Participation
  • Autonomy and Independence
  • Education, Training, and Information
  • Cooperation among Cooperatives
  • Concern for Community

The Battle of Choctaw Electric Co-Op

For a gross example of corruption, deceit, and rigged elections by a co-op board and its manager, Oklahoma’s Choctaw Electric Cooperative was a grand-prize stinker. Though CEC is owned by the lower-income population in this farming/working class area, the co-op was assessing members the state’s highest electric bills–unless you were a board member or top manager and secretly got lower rates. [read on]

With such a potent combination of power and principles—later expanded to include anti-discrimination, financial fairness, and other components—RECs can be a mighty force for helping rural Americans make broad-based social progress. Indeed, in the past 30 years, some RECs have formally expanded their official purpose from simply providing electricity to also investing in such community needs as solar power, high-speed internet, and financing for conservation retrofits. Many have put real money behind this vision. Since 1989, the federal agency that assists RECs has given more than $600 million in zero-interest loans and grants to co-ops that invest in development projects.

ODDITY: Despite the strength and popular appeal of the co-op approach, RECs in regions where they are large and numerous (the South, Midwest, and Plains) have hardly been models of dynamic progress. Even when they face stagnant economies and widespread poverty, many co-ops charge exorbitant rates and cling to a toxic legacy of coal-fired power plants spewing pollutants.

What happened? In effect, these co-ops got co-opted, taken over by closed networks of entrenched rural power (bankers, real estate developers, ag-biz execs, old money families, trusted political retainers, et al.). These interests have steadily tightened their grip on these valuable utilities by using their financial power, social standing, and legal cunning—as well as crude voter suppression and outright thievery—to dominate board elections.

Once in, these clubish boards have proceeded to throw poor Rochdale out the window. Professional managers slide the decision-making and co-op books behind closed doors, they shift organizational focus from cooperative inclusiveness to condescending exclusion, and they assert that business intricacies are way too complex for mere members to mess with.
In co-ops like these, the term “member” has effectively been shriveled to mean powerless consumer … with no more clout than a member of Sam’s Club. Thus, shut out of the governing circle, members lose pride of ownership and the will to participate, leaving the co-op a hollowed-out shell of its big democratic idea. A 2016 survey by the Institute for Local Self-Reliance found that 72% of America’s REC board directors were elected by less than 10% of members.

The message from this top-down co-op management is the same one we get from corporate utilities: Be grateful you can flick on your lights—just pay your bill and leave the rest to us. Of course, in such corporatized co-ops, “us” doesn’t include you and me.

Who sits on the governing boards of the 313 southern RECs was revealed in a 2016 analysis produced by Wade Rathke of ACORN International and Ken Johnson of the grassroots training center Labor Neighbor. In many cases, the results were astonishingly racist, sexist, and anti-democratic:

In the 12 Old South states:

  • 95% of the 3,051 REC board members were white, even though 22% of the co-op members were black. With only a few exceptions, the imbalance was so extreme that you’d think almost no African-Americans live there. In Louisiana, for example, where one-third of the population is black, only one of the 10 electric co-op boards included an African-American.
  • Only 0.3% of board members were Latinx, despite being 10% of REC members; 10 of the 12 states had zero Latinx board members—and Florida, nearly one-fourth Hispanic, had just one Latinx on its 15 co-op boards.
  • Women, a majority of co-op members, held only 10% of board seats.

👇 DO SOMETHING 👇

The good folks at the New Economy Coalition recently released their Rural Electric Cooperative Toolkit with resources for member-owners seeking to re-assert the democratic principles their co-ops were founded on. The NEC works for an “economy that meets human needs, enhances quality of life, and allows us to live in balance with nature.” Doesn’t that sound good? Check them out: neweconomy.net.

Want to get in deeper? We Own It offers frequent webinars (such as “Rural Electric Co-ops 101”), reports (e.g., Community Broadband Networks and The Economics of Clean Energy), and inspiring videos–including one about the member victory at Choctaw Electric.

We Own It ponders the possibilites of co-ops: “With $3 trillion in assets, $650 billion a year in revenue, 2 million employees, and 130 million American member-owners, co-ops are everywhere. A just transition to a new economy, energy democracy, and climate justice runs through them.”

Check out your own REC’s financials, including board and executive pay, on its IRS Form 990, available on Guidestar.org.

Frozen in the power dynamics of the 1950s, these boards (along with many outside the South) have largely abandoned their historic democratic promise. Rather than serving as engines of upward mobility, grassroots prosperity, and civic enrichment for the rural majority who most need cooperative power, they’ve devolved into just another force for business as usual.

Re-Membering the Movement

Being sad about this usurpation of co-op democracy is not a useful emotion. Better to be mad—and do something about restoring members to the center of cooperative power.

The time is now. After all, both the need and the cooperative remedy that spawned RECs some 80 years ago are present again. Widespread inequality is raging once more across our rural landscape, as is the spirit of democratic, populist rebellion. Luckily, the basic architecture of democratic co-op governance is also present and widely available—though not without determined grassroots effort. These enterprises still offer phenomenal potential for common Americans to become activist members and take charge of their economic and social destinies.

Step 1: Take charge of your co-op

This is an imperative undertaking for the whole progressive movement, because:

  1. The long-ignored need for justice and equal opportunities in rural America (a place wrongly labeled “Trump Country”) is enormous and growing more urgent.
  2. RECs possess prodigious resources and collective abilities to enable the workaday majority to make real, lasting, structural change, thus providing a successful organizing model.
  3. Despite the blatantly regressive, desperate tactics used by many current board members to cling to power, “outsiders” can win these low-turnout, relatively low-cost co-op elections by actively organizing in their communities.

In fact, in many service areas they’re already winning.

Monitoring Co-Op Democracy

Question: How have autocratic REC boards gotten away with openly stiffing their owner-members and flaunting the fundamental democratic principles of co-op organization?

Answer: Unlike unions, charities, and even corporations, co-op governance is virtually unregulated and unsupervised. [read on]

Out in the hinterlands of rural America—from the Rockies to Appalachia, Minnesota to Mississippi—gutsy groups of REC members have been mounting democratic rebellions against cliques of haughty (and powerful) directors and managers. These uprisings have been sparked by members discovering that their co-op administrators are butt deep in such outrages as self-dealing corruption, price gouging, embezzlement, rank racism, election rigging, dirty deals, and so awful much more. Infuriated, thousands of members from coast to coast have exclaimed: Wait a minute, we own these things! They’ve joined grassroots efforts to re-democratize in Choctaw (OK), Crow Wing (MN), Delta Montrose (CO), Roanoke (NC), Kit Carson (NM), Ouachita (AR), Pedernales (TX), and Valley (NV).

In addition to battling board autocracy and malfeasance, many local struggles seek to revitalize the innovative spirit that had made rural electrification such a success. Too much of today’s REC hierarchy is stuck on old and filthy coal-fired technology and ignoring crucial new infrastructure needs that rural co-ops could be providing. Once again, ordinary members are rising up to demand (and increasingly to win) fights with recalcitrant managers to switch to cleaner, cheaper solar arrays and other renewable, less polluting sources; provide financing for bill-lowering, energy efficient retrofits for members’ homes and businesses; establish high-speed, broadband internet service; and convert school buses and other public vehicles to electric power.

All of these democracy struggles against entrenched, elitist power are difficult, long, exacting, and uncertain—which is what makes them worthwhile and exciting to be in! The good news is that a nationwide movement is building to connect these extraordinary efforts to each other, to member training centers, to organizing resources … and to you and me.

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