Rural Power Project

The Rural Power Project and these reports, a joint project of Labor Neighbor Research and Training Center (www.laborneighbor.org) and ACORN International (www.acorninternational.org) examined all available records on all 313 cooperatives in the South.

The Crisis in Rural Electric Cooperatives in The South

Examining the Governance Crisis of Rural Electric Cooperatives: Following the Money!

Press

Political Intrigue at PSC Over Coops

Eye-Popping Pay and Perks at Louisiana Coops

Employees Used Vendor Condo at LA Coop

DEMCO Customer Starts Petition

DEMCO CEO Resigns

South Carolina Article

Rural electric cooperatives have a history dating back to Franklin Delano Roosevelt and the New Deal. Congressional action fueled by federal loans and grants enabled membership cooperatives to connect the “last mile” and bring electricity to almost all of rural American within the early years of their organization. The goals and principles of the cooperatives were idealistic, high-minded, and membership-based.

More than seventy-five (75) years later, rural electric cooperatives in many areas where they operate are often a significant economic presence and employer with assets and sales throughout the South of billions dollars annually. The USDA, where the Rural Electrification Administration, now known as the Rural Utilities Services (RUS) is a department, sees the cooperatives as primary intermediaries for economic development and social services, and continues to invest loans and grants in the cooperatives accordingly as a fundamental component of the United States policy and program for rural Americans.

A look at the cooperatives today in the twelve-state region of the South offers another picture entirely. There is too much evidence of democracy lost and discrimination found. Transparency is rare and too many rules and procedures are designed to maintain a status quo that seems more frozen in the fifties before the advent of the civil rights and women’s rights’ movements in the South and nationally, than equipped to fairly service and deliver progress to all members of the cooperatives equitably.

The Project found that of the 3051 supposedly democratically elected board members, 2754 are men or 90.3% while 297 members are women or 9.7%. This figure is in spite of the fact that the gender distribution in South is 48.9% men and 51.1% women.

Examining participation by African-Americans in the governing process of the cooperatives where information was available and verifiable, we found that 1946 of the members were white or 95.3% throughout the South, while only 90 or 4.4% of the members were black. Of the more than 2000 governing positions for which we had information, only six (6) were Hispanic or 0.3% of the total. These figures compare to the fact that throughout the twelve (12) southern states, only 69.23% are white, while 22.32% are black, and 10.19% identify as Hispanic. Half of the states (Arkansas, Florida, Kentucky, Louisiana, Mississippi, and Tennessee) had three (3) or less African-American members with Louisiana and Kentucky having only one (1) and Arkansas, Mississippi, and Tennessee having only two (2). Despite the fact that Florida counts almost one-quarter (24.1%) of its population as Hispanic and Texas totals more than onethird (38.6%) Hispanic, there was only one (1) Hispanic board member in Florida and five (5) in the entire state of Texas.

It matters. Not only because such undemocratic procedures and lack of representation invariably disempowers the very people who should be empowered by the cooperatives, but also because it raises questions about whether such radically unrepresentative leadership can possibly deliver jobs, loans, scholarships, and other opportunities equally without regard to race, gender, ethnicity and other reasons, when the leadership has been so committed to the opposite practice in the rules and procedures governing their own affairs and elections. As the report shows, it also matters if members are elected who are willing to embrace energy conservation and move away from the predominant reliance on coal generation to supply rural electric cooperatives which continues to be the case.

Efforts over and over again throughout the history of the cooperatives in the South have tried to challenge these practices and lack of diversity but whether temporarily successful or soundly defeated, the record indicates that permanent reform has not been achieved or sustainable. Meanwhile most cooperatives are allowed to be self-regulated without sufficient due diligence practiced by the USAD and its RUS arm, the Internal Revenue Service, or for the most part state utility regulators. The fiction of membership-control is overriding the facts of membership disempowerment. The federal government needs to stop providing loans or grants without guarantees of full transparency and equal representation in both rules and reality for consumermembers in every Southern service area.

States need to pass legislation like Colorado has done to guarantee transparency, end proxy voting, and provide access for participation to members. Congress and state legislators need to resist lobbyists and trade associations and protect cooperative members.