If I Have to Read It, You Have to Hear About It

So, where were we?  About to talk about Jim Cooper’s take on electric co-ops (pdf here).

Before we get started in the meat of the thing, let’s take a minute to contemplate footnote 236.  The paragraph in which we find the sentence to which it is attached reads:

An indirect benefit to members—as well as the public—is reducing the environmental harm that power generation inevitably produces.[235] Burning coal produces pollutants such as mercury, sulfur dioxide, nitrogen oxide, and particulates, which harm the region surrounding the power plant and beyond. Another form of pollution, carbon dioxide, affects the global environment. Of course, most other energy sources pollute as well,[236] whether CO2 from natural gas or long-term radioactive waste storage for nuclear plants.

And 236 reads:

236 New hydro power requires dam construction, interrupting free-flowing streams and often depleting oxygen levels in lake water. Wind power generates noise pollution and harms bird migration. Solar power may involve toxic substances in its manufacture. As of the mid-1990s, co-ops owned “over 3,000 megawatts of operating nuclear capacity in 15 plants.” Id. at 173.

And here’s the look on my face:

Noise pollution.

We can blow the tops off of mountains and dump fly ash all over people’s front yards and lie to them about its dangers and try to get immunity from prosecution (god damn straight, I’m looking at you, TVA) and kill off the men in our communities for real after we ruin their souls and their backs with years spent below ground for companies that have been historically notoriously bad to the people who work for them and in the face of that, anyone would dare suggest that a drawback to wind-power is noise pollution?!

Puh-fucking-lease.

Anyway, let’s not get hung up on that, no matter how cute I look when I roll my eyes.  The thing I’ve been thinking about all week in terms of Cooper’s article is how interesting it is that there are these entities–the electrical co-ops, which are owned by the people who get their electricity from them, and yet, as Cooper points out, most people who buy their electricity from the co-op have no understanding that they are, in fact, buying a stake in the co-op with every kilowatt.  They don’t know that they should, then, be deriving some benefit from belonging to the co-op–for sure as inexpensive as possible electricity, but also money.  And yet, because most folks don’t know this, the co-ops have managed to morph through the years into entities that do not serve the interests of their members.

Here’s how an electrical co-op works, simply.  Say there are five people (for the sake of ease) who lived out in the middle of nowhere 100 years ago–we’ll call them John, Paul, George, Ringo, and Stuart.  They form an electrical co-op to bring electricity to their farms and to provide electricity to their farms as cheaply as possible.  Okay, now say that the price of energy in January of that year was $5 per farm.  The co-op can’t know if the price of energy in February is still going to be $5.  What if it’s $6?  Or $10?  So, when it comes time to pay the January bill, the co-op members don’t charge themselves only $5.  Maybe they charge themselves $8, to give themselves a little room for unexpected increases or to pay in case a tree falls on a powerline; they set aside a little reserve.  But let’s say that, though the five guys pay in $8 every month, the co-op only really needs $6 from each of them every month.

So, at the end of the year, the co-op has $24 extra dollars from each of the 5 co-op members or an extra $120.  Now maybe they just divvy the extra money up five ways.  In that case, there’s no real problem.

But, say that halfway through the year, Stuart died and Paul bought up his farm.  And then Billy joined the co-op.  Now you still have five co-op members, but one of the members has only paid for 6 months of service, and one of the members has paid for his original 12 months of electricity on his farm and 6 months of electricity on his new farm.  Paul still may only get one vote and Billy may, too, get one vote, but, if they divvy up the money at the end of the year, Paul will get $36 and Billy will get $12 and Stuart’s estate should get $12 and then Stuart’s membership in the co-op should end.

But I think that, if you look at what Cooper’s saying here, he’s saying that there are circumstances in which Stuart would still, even if he moved away or died, be considered someone with whom the co-op money should be split, because he’s a member, even if he’s no longer in a position to purchase electricity from the co-op.  And it looks to me like what he’s also saying is that, in cases where that is the case, where the co-ops have set up this screwy rule whereby you can still be a member long after you no longer purchase electricity from them, co-ops will be much more likely to pay off, say, Billy, should he decide to move away after 6 months, than they are to pay off Stuart’s family, should they discover after 50 years that Stuart is still considered a founding member of the co-op.

But the reason this isn’t a bigger problem than it is is that very few people who buy electricity through co-ops realize that they are buying electricity not from a regular utility, but from a utility they become part owners of as they pay their bills.  They don’t realize that they have assets tied up in the electrical co-ops and the co-ops are in no hurry to educate them about it.

That’s what I’ve been thinking about.  Why is that?

It’s right there in the name–“co-op.”

And I wonder if there isn’t something seemingly vaguely pseudo-socialist about the idea of co-operatives.  We all pay in, we all vote, we all benefit.

Don’t get me wrong; such a set-up should be the opposite of socialist.  What’s more American than “everyone who pitches in benefits”?

But I feel like we’ve been so wrapped up in this myth of individualism, of doing it for yourself by yourself that it occurs to very few people to ever question whether they’re being cheated out of money they’re owed for no other reason than that they’ve chipped in.