Co-ops, Climate, and Capital

By RK Upadhya - Science for the People, March 2022

Cooperatives are generally seen as a radical and upstart form of organization, and a way for progressives and leftists to immediately implement democratic and egalitarian ideas on how the economy ought to be run. Thus, at first glance, rural electric cooperatives (RECs) seem to be one of the most promising institutions in the modern United States. Over 900 of these localized, nonprofit, democratically-governed, and consumer-owned utilities exist across virtually the entirety of the American countryside. These RECs control nearly half of the country’s power distribution system, which delivers electricity to their roughly 40 million members.¹ Such a vast network should be well positioned to become the backbone of a society that has moved beyond capitalism and its compulsions for ever-greater profits, ever-increasing concentrations of wealth, and ever-deepening social and economic inequalities.

Furthermore, in contrast to most other types of co-ops, RECs are natural monopolies; due to the prohibitive costs of building independent power lines, as well as government regulations, the rights of power distribution in any given area are generally held by a single utility. In most cases, anybody who wants electricity in the service territory of a REC must become a member of the co-op. Insulated from capitalist competition, and with guaranteed yearly revenues in the millions, RECs are thus in a substantially more stable situation than the typical small metropolitan co-op.² Indeed, with their stability and scope, RECs resemble local governments more than anything else, further underscoring their potential as a vehicle of radically democratic and collective practices around technology and local economic development—a potential that is ever more urgent today, given the role of electricity in the climate crisis.³

And yet, as thoroughly analyzed in Abby Spinak’s 2014 PhD dissertation, RECs have largely not lived up to this vast promise. Most RECs are indistinguishable in their day-to-day operations and guiding visions from their for-profit counterparts: they see themselves as single-issue businesses run by competent managers and specialized workers, whose sole purpose is to provide electricity.⁴ Democracy figures little in this vision, and broader socioeconomic and political ambitions even less so—a fact reflected in abysmally low voting rates, and in how RECs not only depend disproportionately on fossil fuels, but have actively lobbied against climate action and clean power regulations.⁵

Part of the reason for why RECs act as technocracies rather than as community institutions lies in their history, where they were developed and shaped by the US government more as forces of capitalist entrenchment, rather than as proper cooperatives built by and for local communities. Furthermore, as the dynamics of recent campaigns around RECs show, the forces of capitalism tend to exclude ordinary working-class people from social movements and democratic and cooperative institutions. For RECs and similar organizations to truly flourish and unlock their radical potential, it is necessary for them to actively push back against capital and its anti-democratic and anti-cooperative impulses.

Instruments of Capitalist Modernity

Key to understanding the present sociopolitical nature of RECs is their origins—particularly the fact that they were never actually envisioned or designed to be a community institution or a force against capitalism. RECs were not a product of a grassroots movement, so much as a top-down project of the Roosevelt administration, which established the Rural Electrification Administration (REA) in 1935 to develop and implement ideas of how to electrify rural America. Initial plans involved simply giving loans to the existing for-profit investor-owned utilities (IOUs); but they turned these down, seeing little profit in the countryside, and preferring to focus on densely populated urban regions. Some advocated for the creation of new municipal or federal utilities, as had been done a few years earlier with the Tennessee Valley Authority, but this position was drawing increasing opposition from reactionary corporate interests, who railed against “communism” and taxation, and were successfully interfering with other New Deal programs. Small, nonprofit co-ops thus presented a viable political and fiscal middle ground: they could get the job done with government loans, and subsidize their own efforts using local volunteer labor, reducing the need for public funding.

Moreover, the primary purpose of rural electrification, in the eyes of Roosevelt and the REA, was not to engage in a humanitarian development effort or to build new institutions of local democracy, but to help stabilize American capitalism and bring it out of the Great Depression. The 1930s saw a growing understanding among Western elites regarding the importance of aggregate consumer demand as the fuel for the circulation and accumulation of capital. If wages were too low, workers could not buy commodities, leading to reductions in production, further cutbacks on jobs and wages, and so on, in a positive feedback loop of stagnation—which could generate labor unrest and potentially lead to a social revolution. States, however, could intervene in this process by boosting aggregate demand via directly employing workers or investing in infrastructure. Rural electrification was part of this vision and was seen as an important way to drive both the industrialization of agriculture, which would boost farmers’ incomes and productivity, and the creation of a new source of consumer demand for electrical appliances, which would boost the manufacturing industry.⁶

Guided by this framework for economic stabilization, the REA wielded a heavy hand in the fledgling co-ops and the development of their overall business plan. It was particularly insistent that they prioritize debt-driven consumption, both by signing up as many people as possible to the co-op, as well as encouraging individual households to make full use of electricity access—an effective way to drive up consumer demand when present incomes and savings were too low. Just as the co-ops took out loans to fund the purchasing of poles, wires, and transformers, families were encouraged by REA agents and co-op managers to take out loans to purchase new appliances and equipment, such as refrigerators, dishwashers, and clothing irons. The total combined cost of signing up for the co-op, wiring up a home, and buying the standard suite of electrical appliances was typically around one thousand dollars—on the order of a typical small farming family’s yearly income. The REA thus shaped the co-ops as consumer-centered businesses, whose primary and sole purpose was to deliver electricity and encourage and facilitate its consumption. This still allowed for some of the structural benefits of the cooperative form to take root, such as keeping resources within local communities and creating some semblance of democratic influence over a new technology that was revolutionizing daily life—but pushed aside was any radical vision of seeing electric cooperatives not just as a business, but as a space for collective governance that could potentially move into other sectors of technology and the economy. RECs thus did not open up a new front against capitalist exploitation, but in fact, served as an instrument for the expansion and consolidation of capitalist modernity.⁷

The emphasis on standard business practices also meant that basic democratic engagement was limited, if not completely nonexistent. Annual meetings—which technically were supposed to be a mass forum where co-op issues were discussed and debated, and directors were voted in and out—were instead mostly a venue for entertainment and socialization, where members could hear routine status updates from co-op management, and perhaps learn something about the latest and greatest consumer products. Elections were often a mere formality, with uncontested elections being normal, and new candidates typically nominated by the existing board of directors. Thus, despite RECs technically being structured as democratic bodies, in practice they became closed-off technocracies, with extremely low rates of voter turnout, and little member engagement in general—a trend that has persisted to this day, and indeed, reflects the general nature of democracy in the United States.⁸

Democratization Movements Under Late Capitalism

Despite ossifying into mundane, run-of-the-mill utilities, the formal structure of RECs and the lip service they paid to cooperative values did leave open space for member activism. In recent years, increasingly numerous movements within RECs have sought to reform the technocratic culture that was instilled at their origins, and more specifically, to push them to be more responsive to the climate crisis and decarbonization needs.⁹ However, their trajectories showcase the challenges in mobilizing broad popular movements around electricity and climate.

Consider the reform movement that emerged in the late 2000s at Pedernales Electric Cooperative (PEC), the largest electric distribution co-op in the country, located west of Austin, Texas. For decades, PEC’s board of directors had been keeping themselves in power via a closed-off election process where only those nominated by a board-appointed committee could stand for office; as a result, the co-op had become largely unresponsive to member needs and interests, especially with regards to the growing desire for local renewable energy. A member who was disgruntled about the lack of pro-solar policies at PEC began to build a coalition of like-minded locals, and together they spoke out at town halls, wrote op-eds, canvassed their neighbors, and filed lawsuits. The activists eventually succeeded, forcing the board to hold free and contested elections—which new activist candidates won—while also uncovering a corruption racket among the co-op’s upper management, who were promptly fired, charged, and convicted.

The movement at PEC shows how, unlike IOUs, the democratic structures of co-ops allow for accountability and redress—as long as members actually stay alert and organized. But the movement was also limited; even at the most contentious general meetings and during the most pivotal voting periods, only a fraction of the membership bothered to show up or vote. The activists themselves were mostly drawn from elite managerial professionals, including one with connections to a powerful law firm based out of Austin. This is the context of how the actual victory over the intransigent board was largely dependent on a successful lawsuit that forced them to hold free and open elections, rather than on a mass movement applying direct pressure. Ultimately, the reform movement was a reactive effort against corruption and fiscal irresponsibility, rather than an active struggle to expand economic democracy and social change.¹⁰

The class disparities were even starker in the case of Holy Cross Energy (HCE), a REC based in the Rocky Mountains west of Denver, Colorado. Founded like most other RECs to serve a largely rural working-class population, the area has since become something of a boomtown, driven by growth in the ski and tourism industries based out of Aspen and an influx of professionals, managers, and executives. The changing demographics resulted in some tensions at HCE, but nothing so intense as at PEC; growing interest in renewable energy and sustainability initiatives led to a relatively smooth transition to a new set of directors in the early 2010s. Central to this transition was a powerful local firm, the Aspen Skiing Company. They decided that the best way to achieve their sustainability goals—themselves likely products of their elite but liberal-cosmopolitan clientele, the kind who like to coat their consumption habits with ethical and ecological aesthetics—was to influence policy at HCE, whose coal-heavy power supply serviced the company. As such, they became directly involved in HCE elections, directly backing “green” candidates with funding and publicity.

The new, climate-conscious leadership deployed many new initiatives around local clean energy and energy efficiency. However, their class allegiance became visible in how reforms were limited to the realm of policy implementation: little changed about how the co-op was structured and how it engaged its members, and there was much resistance around viewing the co-op as a community institution, rather than a business. Board members balked at proposals to invest in programs geared toward equitable economic development. On-bill financing, for example—a program that allows members to affordably finance energy efficiency upgrades via loans from the co-op, which are paid back through the electric bill—was seen by some board members as an unfair subsidy, and thus left at the wayside.¹¹

A version of this pattern even emerges in areas without a strong local presence of professionals and elites. In eastern Kentucky, in west-central Appalachia, there is a long history of working-class struggle against the hegemony of the coal industry. One organization that has been at the center of this is Kentuckians for the Commonwealth (KFTC). These struggles have overlapped with the local power distribution co-ops and their power supplier, Eastern Kentucky Power Cooperative (EKPC), which has been heavily reliant on coal energy. In the late 2000s, KFTC launched a campaign to start pushing EKPC to move away from coal, and in the process got involved with various reform campaigns at its constituent distribution co-ops. But despite the working-class base of KFTC, the actual day-to-day activities of the co-op campaigns, as well as their overall strategy, was mostly driven by middle-class members, like professionals and retirees. As at PEC in Texas, the anti-coal campaign was centered around a lawsuit against a new coal plant. The lawsuit was a success, and the result was the creation of new committees and coalitions that brought together representatives of the co-op, KFTC, and other local interests—mainly other NGOs—to hash out an energy development strategy that would prioritize clean energy—but the only people who had the time, resources, and knowledge to contribute to this new collaboration were professionals and non-profit staffers.¹² While this may have been a moral victory, the lack of widespread working-class militancy around these initiatives is why little seems to have changed at EKPC; as of 2019, the vast majority of its generation was still based on fossil fuels, with less than 6% of its power capacity from renewable sources.¹³

These three examples demonstrate that on one hand, we are in a moment where energy democracy and climate action have become deeply interconnected. Decarbonization requires overcoming entrenched opposition within utilities, and the democratization of these utilities requires active engagement by people passionate about the otherwise dry subject of electricity governance. But at the same time, these movements have mostly reflected the views and interests of a narrow class of educated, upwardly-mobile liberals, and have been ineffective (if not entirely uninterested) in mobilizing the broader working class. As a result, reform campaigns can be hard-pressed to mobilize enough people to overthrow the comfortable old guard. Even when these campaigns are successful, they are not attuned to the interests of the masses, thus keeping RECs from achieving their true potential as spaces of popular economic democracy.

From Business-As-Usual to Class Struggle

The narrow class composition of campaigns around RECs can be partly attributed to activist strategy, which tends to default to mobilizing peers to pursue narrow policy changes, instead of engaging in deeper organizing to build a mass popular movement. But there are also larger structural dynamics at play. Activism (democratic engagement as a whole) is work, dependent on time-consuming and often emotionally-draining tasks like following discussions and debates, attending and contributing to meetings, canvassing neighborhoods, researching and studying, facilitating collective decision-making, participating in protests, and so on.¹⁴ Technical understanding of democratic processes, as well as the objects of governance, is also necessary, especially when concerning a complex technological system like the power grid. However, both of these resources—time and knowledge—are valuable and scarce resources under capitalism. Workers spend much, if not most, of their time laboring for corporations, limiting their ability to substantively participate in social and political activities that aren’t grounded in day-to-day life. On a more fundamental level, capital is constantly deepening the division of labor, concentrating knowledge amongst a small class of professionals and managers, and further alienating the working class from the production process, and science and technology in general.¹⁵ Thus, in a capitalist society, the average worker is functionally excluded from democratic institutions. The default citizen of bourgeoisie democracy ends up being the educated professional, the only segment of the population (outside of the ruling class) that has access to the necessary resources to fully participate in its institutions.

This issue of class composition is thus a general problem for climate activism, energy democracy campaigns, and the development of popular and radical social movements as a whole. It is a tough sell for most people to get involved in such work given the level of resources needed for genuine engagement, without there being a sense that involvement will yield a concrete, material gain that can actually alleviate the stresses and strains of life under capitalism. Unfortunately, for both decarbonization and democratization, the benefits are often too distant or abstract to drive spontaneous mass participation purely on their own merits; moreover, decarbonization, in particular, can be associated with short-term costs, making it even more difficult to be the basis for a mass working-class movement. This idea is captured concisely by one of the slogans raised by the Yellow Vests in France in 2018 and 2019, who rebelled against both fuel taxes and tax cuts for the rich: “End of the Month, End of the World.” This battle cry drew an equivalence between the grim choices that face working-class people when their paychecks run out at the end of the month, and the disastrous future the world faces as the climate crisis escalates—while also rejecting the idea that ordinary workers must bear the costs of the transition away from fossil fuels.¹⁶

What, then, is to be done? Social movements and political struggles must rethink and reconfigure how they form their strategies and demands, and prioritize the concrete needs of the masses, instead of focusing solely on abstract moral or philosophical desires. In the context of RECs, movements must aim for much deeper changes than procedural reforms or clean energy incentives—they must develop and fight for a vision of the co-op as a space for consolidating and expressing working-class interests and power, and preserving and expanding the socioeconomic and political capacity of co-op members against the pressures of capital. In other words, co-ops should be seen as a potential weapon of class struggle. Such a vision is radical but entirely compatible with how co-ops are currently situated and structured. Electricity rates should be made progressive and act as a tax, to discourage the wasteful consumption of big corporations and the wealthy, and to alleviate financial burdens on ordinary residences. Local power production should be seen as not just a way to save money and decarbonize, but also as a means of cultivating local jobs and distributed knowledge in renewable energy.

More broadly, RECs must see themselves as actual community organizations. Their purpose should not just be to maintain physical and technological infrastructure, but social and political infrastructure as well, and to serve as an engine for the reconstruction of communal and collective life. Co-op meetings should proliferate far beyond a one-off annual event, and must actively and continuously encourage year-round participation, deliberation, and education around all co-op matters. This should not just be a top-down system controlled by management, but instead, a process where members are connected to one another, to share information and experiences about electricity, energy, and the environment—and beyond. This process of rebuilding community should also overlap with other public institutions, such as schools, libraries, and post offices, to create a vibrant network of collective educational and cooperative activity. Even more ambitiously, RECs should expand their scope beyond electricity, and use the sizable and stable revenue streams of the power grid to aggressively decommodify other sectors of the local economy, such as agriculture and housing. This could involve helping establish and subsidize new, autonomous co-ops in these sectors; but it must also involve direct support and coordination with the activities of the workers in these sectors. Union campaigns could gain unprecedented levels of power and scope if they had the financial and social backing of local electric co-ops. The importance of unions also alludes to a crucial point—for co-ops to survive and thrive in any context, they must be connected and grounded with an anti-capitalist and working-class political movement that is continuously working to seize space from capital and undermine its power.

All of this applies not just to RECs, but to public utilities in general. Today, there are numerous energy democracy campaigns across the United States.¹⁷ All of these could potentially advance a radical vision of using the public sector to counter capitalist exploitation and develop programs and institutions that build toward genuinely democratic governance of society, labor, and nature. This decade will be make-or-break for the climate—but if energy democracy campaigns rise to the challenge, we stand to win not just a stable biosphere, but a democratic, cooperative, and ecosocialist future.

Notes

1. “Electric Co-op Facts & Figures,” National Rural Electric Cooperative Association, accessed October 22, 2021, https://www.electric.coop/electric-cooperative-fact-sheet.
2. Steven Deller et al., “Research on the Economic Impact of Cooperatives,” University of Wisconsin Center for Cooperatives, June 19, 2009, accessed December 3, 2021, https://reic.uwcc.wisc.edu/electric/.
3. RK Upadhya, “Parliaments of the Earth,” Logic 13 (May 17, 2021), https://logicmag.io/distribution/parliaments-of-the-earth/.
4. Abby Spinak, “Infrastructure and Agency: Rural Electric Cooperatives and the Fight for Economic Democracy in the United States,” (PhD diss., Massachusetts Institute of Technology, 2014), https://dspace.mit.edu/handle/1721.1/87519.
5. “NRECA Files Legal Challenge to EPA Clean Power Plan,” Power Grid International, October 27, 2015, https://www.power-grid.com/executive-insight/nreca-files-legal-challenge-to-epa-clean-power-plan/; Myles McCormick, “Electric Utility Groups are Wary of Democrats’ Clean Power Ambitions,” Financial Times, September 2, 2021, https://www.ft.com/content/6c264fa1-b069-4033-b224-302695848f9a.
6. Debra C. Jeter et al., “Democracy and Dysfunction: Rural Electric Cooperatives and the Surprising Persistence of the Separation of Ownership and Control,” Alabama Law Review 70, no. 2 (2018): 374–385; Gregory B. Field, “‘Electricity For All’: The Electric Home and Farm Authority and the Politics of Mass Consumption, 1932–1935,” Business History Review 64 (1990): 32–60; Spinak, “Infrastructure,” 85–109.
7. Spinak, “Infrastructure,” 109–116.
8. Matt Grimley, “Just How Democratic Are Rural Electric Cooperatives?,” Institute For Local Self-Reliance, January 13, 2016, https://ilsr.org/just-how-democratic-are-rural-electric-cooperatives; Spinak, “Infrastructure,” 241–42, 250.
9. “Community Power: How Grassroots Organizing Coalitions Are Democratizing Rural Electricity,” The Trouble, December 7, 2019, https://www.the-trouble.com/content/2019/12/7/community-power-how-three-grassroots-organizers-are-democratizing-rural-energy; Holmes Hummel, “Power to the People: Organizing Rural Electric Cooperatives,” The Forge, October 19, 2020, https://forgeorganizing.org/article/power-people-organizing-rural-electric-cooperatives; Upadhya, “Parliaments.”
10. GreenDreams—Pedernales Electric Coop Revolution, directed by Ric Sternberg (2011), https://www.youtube.com/watch?v=KIJHRMCxbrM.
11. Spinak, “Infrastructure,” 171–99, 250–51.
12. Jeff Biggers, “Kentucky Cancels Coal Plant, New Power Movement Electrifies Grassroots Alliance,” Grist, November 19, 2010, https://grist.org/article/2010-11-18-breaking-kentucky-cancels-coal-plant-new-power-movement/; Spinak, “Infrastructure,” 200–235, 250–51.
13. “2019 Media Kit,” Eastern Kentucky Power Cooperative, 2019, https://www.ekpc.coop/sites/ekpc/files/PDFs/EKPC%20Media%20Kit%202019.pdf.
14. Alyssa Batistoni, “Spadework,” n+1, no. 34, 2019, https://www.nplusonemag.com/issue-34/politics/spadework/; Spinak, “Infrastructure,” 75–84.
15. Harry Braverman, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century (New York: Monthly Review Press, 1974); David Noble, Forces of Production: A Social History of Industrial Automation (New York: Knopf, 1984).
16. Simon Fairlie, “End of the Month, End of the World,” The Land, no. 25, 2019, https://thelandmagazine.org.uk/articles/end-month-end-world.
17. Nafis Hasan et al., “Take Back the Grid: DSA and the Fight for Energy Democracy,” Socialist Forum, Winter 2019, https://socialistforum.dsausa.org/issues/winter-2019/take-back-the-grid-dsa-and-the-fight-for-energy-democracy/.

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author.