On November 8, 2018, a live 115 kV line broke off from a transmission tower owned by the Pacific Gas & Electric Company (PG&E) in Northern California. The tower was ninety-nine years old—twenty-five years past the expiration of its planned operating lifetime. The wire hit some vegetation and set it alight. The fire rapidly intensified, with ample fuel from dead trees that had been killed off during the recent historic drought. Before a proper evacuation could be organized, the fire roared through the nearby town of Paradise and destroyed it completely. This was the deadliest wildfire in California history. Eighty-five people were killed and 14,000 homes were lost.
The destruction of Paradise was the result of interlocking trends within capitalism, technology, and ecology—as are other recent catastrophes of power infrastructure, such as the February 2021 outage in Texas that had me revising this essay in the cold and dark. The transmission and distribution grid is arguably the very foundation of modern society. It harnesses, stabilizes, and distributes energy in its most fundamental form: electricity. This is a delicate, complex, and dangerous task that is crucial for public welfare. And yet, across much of the US, the grid is controlled by investor-owned utilities (IOUs) like PG&E: corporations whose core purpose is the maximization of private profit.
As regulated monopolies, IOUs do face certain constraints on how they can go about making money. Nonetheless, the logic of profit maximization generally holds: minimize costs associated with labor, maintenance, and operations, and keep electric rates as high as possible, in order to maximize returns to investors. One direct consequence is that infrastructure is allowed to fall into disrepair. Investigations into PG&E after the devastation at Paradise revealed a systemic tendency to run equipment to the point of failure, rather than invest in inspections and preventative maintenance. In fact, many of the most destructive fires in recent California history have been caused by failing PG&E equipment, which supplied the literal sparks to set fire to the dead vegetation that is accumulating across the state due to historic, carbon-exacerbated droughts. Meanwhile, PG&E shareholders have reaped the benefits. In a 2019 court case, a judge pointed out that the company has paid out billions in dividends over the years while neglecting its maintenance and land management responsibilities.
What if the grid were owned in a different manner—say, by the same rural communities that have suffered so much at the hands of PG&E? What if serving the needs of these communities, rather than enriching investors, was the purpose of a power utility?
In fact, an entity that operates in this manner not only exists, but is present across the US, in forty-eight states and covering a majority of its landmass. These are the rural electric cooperatives (RECs): nonprofit, local, democratic institutions that collectively control 42 percent of the country’s power distribution system and deliver electricity to over 40 million people. RECs were born out of the New Deal in the 1930s, as part of a broader federal push for rural electrification. Private utilities didn’t see any profit in connecting poor and sparsely populated regions, which resulted in large swaths of the country remaining without power. So the Roosevelt Administration stepped in, establishing the Rural Electrification Administration, which worked with rural residents to form cooperatives. These cooperatives were encouraged to apply for government loans and grants so they could build much-needed power infrastructure themselves. The initiative turned out to be wildly successful. Within twenty years, rural America went from having electrification rates of roughly 10 percent to matching the 90 percent and higher rates of urban areas.
But RECs weren’t just designed to bring power to rural communities. They were also designed to be owned and governed by those communities, which to this day are largely poor and working-class. RECs are run by boards elected by the membership, and their revenues come almost entirely from this membership paying their electric bills to the co-op. They are relatively small-scale and localized, with members being neighbors, relatives, friends, and coworkers. They are structured as 501(c)(12) not-for-profit cooperative organizations, which requires them to provide electricity at “cost of service.” Moreover, they must distribute excess revenues back to the membership. This works more like a refund than a dividend: if there is money left over after covering the cost of service, a portion of a member’s electric bill is returned. RECs aren’t allowed to amass profits like IOUs, thus eliminating the temptation to let equipment fall into disrepair for the sake of shareholder returns.
RECs are a model of what democratic control of infrastructure can look like. Of course, the reality is more mixed. The history of RECs over the past century is littered with cases of mismanagement, corruption, and antidemocratic practices. As the scholar Abby Spinak explores in her 2014 doctoral dissertation, many RECs have stagnated, with relatively few members taking an active interest in cooperative management, thus enabling technocratic bureaucracies to take root.
Nonetheless, RECs have a unique potential for allowing ratepayers to overcome these sorts of problems, and are ultimately an indispensable tool for forging a democratic path to decarbonization. The premise of the Green New Deal is that we can decarbonize as we democratize—that a zero-carbon world can also be a fairer one. But what are the actual building blocks of the Green New Deal? For an answer, we can turn to the old New Deal, and the cooperatives it created.
Something of a Revolution
In January 2006, Ric Sternberg made what he thought would be a simple phone call to his power provider, Pedernales Electric Cooperative (PEC). PEC is the largest REC in the country, covering over 8,000 square miles of territory west of Austin, Texas. Sternberg wanted to get information on any incentives or programs offered around residential solar systems. To his dismay, it turned out there weren’t any. Worse, nobody at PEC seemed much interested in the topic. When Sternberg broadened his inquiries to try to learn more about the co-op’s governance policies and how rules could be changed, he quickly found himself hitting walls—walls clearly meant to undermine member-owners like him from exercising their rights and obligations. Basic information was locked away, meetings were only open to management and board members, and the board—which was supposed to be elected by the membership—had set up a system whereby the only people who could run for election were those selected by a board-approved nominating committee. What was supposed to be a democratic institution had been taken over by a small group of power brokers.
In response, Sternberg organized something of a revolution, which he recorded and analyzed in a charming amateur documentary. Over the next six months, Sternberg found more co-op members who shared his concerns, and together they formed an activist group called PEC4U. At first, they tried to work within the system by making moral appeals to the nominating committee and the board to allow more people to run for election. When these pleas went unheard, PEC4U escalated accordingly. They used traditional activist techniques to spread the word about PEC’s antidemocratic leadership and build a movement to take back control of the co-op: flyering and tabling at co-op events, canvassing various towns and communities across the territory, and phone banking. They also organized a class-action lawsuit centered on PEC’s opaque administration and exorbitant board salaries, and how it was using its profits from selling electricity. The lawsuit proved to be an especially useful tactic, as it forced PEC to open up previously confidential records of its management and accounting practices. This revealed even deeper issues of corruption that had taken root at the highest levels. The new discoveries, combined with organizing efforts by PEC4U, led to hundreds of angry co-op members showing up at the 2007 annual membership meeting to demand changes. This was a stark contrast to the previous year, when only a handful of people showed up to present softer criticisms and milder demands.
The unprecedented level of mobilization by co-op members, combined with growing scrutiny from state legislators, cracked open the once-impenetrable fortress of the PEC administration. Key figures resigned or announced their retirement, including the general manager, who had held his position for three decades and would soon face criminal charges for embezzlement and money laundering. Under pressure, the remaining members of the board amended the election bylaws, and in 2008, PEC had its first truly democratic election. Fifty-eight candidates ran for the five contested seats, and practically all of the incumbents were ousted. With the membership back in control of PEC, the gears finally began to turn on the issue that had initially kick-started Sternberg’s crusade: the co-op committed itself to one of the most aggressive decarbonization goals in the country.
Encoded for Democracy
What is striking about the PEC saga is just how quickly the administration was overthrown, relative to similar efforts targeting for-profit utilities. It took about two and a half years between Ric Sternberg making his first phone call to the co-op and the total overhaul of the bylaws and the board. Far less ambitious campaigns advocating reforms at IOUs tend to take much longer to succeed—if they ever do.
The successful revolution at PEC underscores how RECs encode democratic rights into their very structure. RECs are meant to be controlled by their ratepayers—the co-op membership—through the direct election of board members. This principle is formally enshrined in legislation and in the official legal definitions of cooperatives. Thus, even in situations where crooked administrators try to undermine the democratic process, a mobilized membership has bylaws, charters, and tax codes on their side. This is also why vigorous member engagement is so important to the health of the co-op, and why cases of corrupt RECs are almost always linked to an inactive and apathetic membership.
While co-ops are controlled by members, IOUs are controlled by shareholders. Ratepayers have no say in who sits on the utility’s board, and are several steps removed from exerting influence on policy. Regulation is typically the job of a state’s public utility commission, whose administrators are appointed by governors and confirmed by state legislatures. Grassroots movements looking to reform these utilities are thus faced with a byzantine and technocratic apparatus. An IOU run by a self-serving elite is functioning exactly as intended.
The contrast between RECs and IOUs also hinges on another less obvious, but equally important dynamic: profit. The ability to extract and accumulate surplus revenue has an enormous impact on power relations. The restrictions on profit-making at RECs—enacted through a combination of tax code provisions, government regulations, and member oversight—limit the material base on which a self-perpetuating power structure can be built. Without free access to profits, co-op executives and administrators are constrained in the resources they can use to preserve and expand their privileges. Bad actors in a co-op can skim off the top of day-to-day operations, and after several years they might be able to afford a small yacht or a sports car—but the co-op’s legal and tax status prevents them from turning the entire institution into a vehicle for wealth accumulation or acquiring so much power that they can extend their reach into the state and corrupt regulatory structures. This was the case at PEC. While the co-op suffered from outright criminal mismanagement, the power exercised by the administrators was fragile. They lacked the resources to mount a serious defense of their interests once co-op members started getting organized.
Compare this to the scandals that have plagued for-profit utilities. In recent cases in Illinois and Ohio, profits from utility operations enabled industry elites to project their power into the highest levels of state government. The IOUs drew on their annual profits—typically in the range of hundreds of millions to billions of dollars—to underwrite a corrupt nexus of executives and politicians, who entrenched themselves in the state and developed ways to extract even more money from people’s energy bills. Across the US, supposed safeguards like regulatory commissions and legislative oversight are consistently undermined by the ability of for-profit utilities to use their accumulated resources to bribe lawmakers, co-opt regulators, and essentially purchase their own legislation.
This feedback loop of profit and corruption is the logical consequence of trying to regulate privately controlled monopolies instead of abolishing them. Even outside of overtly criminal conspiracies, IOUs across the country interfere with state institutions. In California, PG&E has long been a powerful influence within the state government; even after the wildfires of 2018 and 2019 pushed the company into bankruptcy, PG&E was still spending large sums on political lobbying. Since electricity rates must be approved by state regulators, and these rates determine the profits of the utility, the fundamental fiduciary responsibility of the IOU is arguably to invest in controlling the rate-making process by corrupting the officials who oversee it. The most lucrative line of investment is not in maintaining and improving infrastructure, but in securing political power.
A Just Transition
The power of IOUs has had grim consequences for the climate. In the last decade, for-profit utilities have engaged in egregious acts of political interference directed at stymying clean energy standards, undercutting the renewable energy industry and protecting fossil-fuel power plants. Even when IOUs have been forced to accept decarbonization, they have worked tirelessly to ensure that they themselves, and their shareholders, reap the benefits of the transition.
Given this context, it is noteworthy that the member revolt at Pedernales was sparked by grassroots interest in solar power. In terms of fossil fuel dependence, RECs as a whole are not so different from IOUs—they are highly dependent on carbon energy and are often an ally of the fossil fuel industry. But the structure of co-ops makes it easier for member-owners to demand, and to win, shifts toward clean energy. There are clear means by which ordinary people can put their own interests first, and for the technical questions of power generation and distribution to be connected with questions of social equity. Whether this actually happens is, of course, a matter of whether local communities are mobilized around such issues. But what’s important is that co-ops allow for this opportunity to exist in the first place.
Increasingly, the question isn’t whether the world will decarbonize, but how it will decarbonize—and co-ops are ideal vehicles for pursuing a democratic path to decarbonization. Top-down, technocratic approaches that rely heavily on market logic, such as those pursued by IOUs, tend to favor the rich. Co-ops offer an egalitarian alternative.
In 2010, the membership of Kit Carson Electric Cooperative (KCEC), a REC in New Mexico, voted for 100 percent renewable energy. Shortly afterward, a steering committee that included board members as well as co-op member-owners decided on “community solar” as the ideal vehicle to decarbonize their distribution system. In the community solar model, individuals buy “shares” of an installation and receive the benefits as credits on their electric bill, as if they had the panels on their own roof.
In 2012, KCEC built New Mexico’s first community solar development, a 100 kW system with distributed ownership of its 420 panels. It soon expanded the program more than tenfold, to over 1 MW. (For comparison, a typical residential rooftop system is between 5 to 15 kW). As of 2020, KCEC had almost 20 MW of utility-scale solar, with plans to double that number in 2021, and is aiming to get 100 percent of its daytime electricity from local solar power by 2022.
KCEC’s decision to embrace community solar wasn’t just driven by environmental considerations, but by social ones as well. The solar power industry is dominated by individually owned rooftop solar systems. This is a rather exclusive technology, as it’s not available to those who can’t afford to put panels on their roof, or who don’t own their own homes. Community solar, by shifting the focus from individual to collective ownership, makes solar power more accessible. That’s partly why RECs have been a leading force in organizing community solar projects. In 2016, seventy-eight different co-ops had programs; today, there are more than two hundred.
IOUs, on the other hand, have at best a mixed record on solar—and an awful one when it comes to collective solar ownership. They are particularly nervous about decentralized solar systems cutting into their profits, and even potentially inducing a “death spiral.” In accordance with laws around “net metering” in most states, excess electricity generated from rooftop solar tends to be bought by the utility at the full retail price, which is substantially higher than the wholesale price that utilities pay to standard power producers. This works well as a means to subsidize much-needed zero-carbon energy production, but also pushes the price of electricity up for utilities—who, in an effort to protect their profit margins, try to increase rates for everybody else, which drives even more people to buy their own solar systems. The utilities could mitigate this problem by investing in their own solar installations, but they have been largely reluctant to do so, due to their close alliance with the fossil fuel industry and their desire to protect their own fossil-fuel generation assets. Instead, IOUs have used their wealth and power to sabotage clean energy mandates and decarbonization initiatives. In sun-drenched Florida, for example, powerful private utilities have lobbied hard against solar, and have kept the state lagging in terms of renewable development.
This aspect of IOUs points to another contrast with RECs. KCEC has not sought to unilaterally shut out rooftop systems. Instead, the co-op has initiated a process to discuss and debate the problem, holding public meetings to bring together technical professionals, rooftop solar installers, homeowners interested in solar, environmentalists, and other local stakeholders to hash things out and come up with solutions. It is a perfect example of what democratic control over technology could look like, where different parties with different interests and perspectives—users, developers, platforms—figure out how to overcome problems and conflicts and move forward together.
All across the country, RECs are investing in clean energy. Washington EC in Vermont was pushed by its members in the 1970s and 1980s to move into renewables early, and currently gets half of its power from a landfill gas power plant that it owns. Farmers EC, a small co-op in Iowa, has one of the highest concentrations of solar power in the US—much of it built by a local high-school physics teacher. The Delta-Montrose Electric Association in Colorado is working with local farmers and ranchers to investigate using agricultural waste products for power production.
RECs are also moving beyond electricity, making use of their existing network of electric poles to build out fiberoptic networks and connect their rural members to high-speed internet. Perhaps even more ambitiously, some co-ops are stepping into the world of ecology. Roanoke EC, in eastern North Carolina, is running a program to distribute knowledge about sustainable forestry, targeted specifically toward Black landowners and embedded in a framework of racial justice. This initiative is rooted in a longer tradition stemming back to the 1970s, when Black co-op members fought for the administration and its policies to reflect the demographics and interests of the territory’s majority-Black population. So far, Roanoke EC has helped implement land conservation techniques on over 13,000 acres of land.
An electric co-op entering the world of land management is not quite as random as it may seem. Power transmission and distribution systems require extensive land management in order to ensure that trees and foliage do not interfere with electrical lines and poles, and vice versa. And, as the wildfires in California have shown, land mismanagement by utilities can have fatal consequences, which will only grow in size and scope as the climate crisis escalates. Countering the crisis will require a massive expansion of conservation efforts, and these efforts are unlikely to come from entities that prioritize profits above all else. Rather, the best stewards of the earth are those accountable to a mass constituency, rooted in local experiences and knowledge, and committed to the creation of public, not private, wealth.