The Power of Community Utilities

By Thomas Hanna, Johanna Bozuwa, and Raj Rao - The Climate and Community Project, April 2022

Publicly and cooperatively owned electric utilities (community utilities) have the potential to demonstrate what an equitable, clean energy system looks like in the United States. They could become powerful “anchor institutions” in their community by grounding their decisions in democratic governance and community partnership, affordable energy and community wealth building, and access to renewable energy.

The United States urgently needs to transition off of fossil fuels and onto clean sources of energy (especially renewable energy) to maintain a livable climate. As of 2020, only around 20% of US electricity generation is from renewable energy sources. Energy utilities – the companies that run our power systems – have enormous control over the scope and scale of the transition, but have often dragged their feet or even fought against clean energy. Not only does their inaction imperil the very future of humanity, but it directly harms families – often Black, Indigenous, low income, or otherwise marginalized – who live in the shadow of toxic power plants. The current US energy system is dirty and expensive. 31% of households in the country have to make the choice between buying groceries or paying their energy bills. In response, communities across the country are beginning to mobilize to demand an energy transition.

We have a powerful tool to accelerate the energy transition in a way that builds community wealth and energy justice in our communities: publicly and cooperatively- owned energy utilities. In this report, we refer to these types of utilities as “community utilities” because they are owned by the local community. Around thirty percent of households in the United States get their energy from community utilities. This is no small part of our energy system. As non-profit utilities without faraway shareholders that are ultimately accountable to the local community, these utilities have the potential to be an example for what an equitable, clean, and democratic energy system could look like. Collective action and organizing to push community utilities toward the intersections of clean/ renewable energy and community development can be more tractable than in corporate utility areas because community utilities’ mandate is to provide a public good, not to maximize profits for shareholders.

Community utilities and cooperatives have a radical history. In the early days of electrification one hundred years ago, residents across the country rose up against profiteering private utilities who provided poor (or nonexistent) service at high prices by creating their own publicly and cooperatively owned utilities. In the state of Nebraska, for instance, they kicked all private utilities out of the state for good. To this day, there are no private utilities providing electricity to Nebraskan homes. This cause was, in turn, taken up by national leaders. For instance, Franklin D. Roosevelt started the Rural Electrification Administration (REA) after rural communities pushed for access to light in their regions. Before that, corporate actors didn’t want to enter rural areas because they didn’t see how they could profit from such unpopulated land. The REA program took electrification from ten to ninety percent in ten years as groups of farmers banded together to start their own electric cooperatives, run on cooperative principles. However, today some community utilities have forgotten their past and are not living up to their potential. Many still rely on fossil fuel energy and some have even pushed back against important climate resiliency approaches like rooftop solar. In some places, democratic governance structures have deteriorated (or been manipulated by powerful interests) and residents don’t even know that they actually own their utility. It is time to reignite the radical history of community utilities to herald the transition to a genuinely democratic, equitable, and clean energy system.

Download a copy of this publication here (PDF).

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.