Wind Energy for Rural Electric Cooperatives
Rural electric cooperatives, or “co-ops,” started in the 1930s because large investor-owned utilities were unwilling to serve rural areas. Farmers and ranchers joined together, forming co-ops to finance and build electric lines to serve their areas. The movement was a tremendous success.
A typical rural electric association (REA) has 2,000 to 20,000 members and a sprawling service territory. Most REAs do not generate their own electricity; they buy it from larger power wholesalers that are often organized on the cooperative business model. These generation and transmission utilities include Tri-State Generation and Transmission, which serves co-ops in Colorado, Wyoming, Nebraska, and New Mexico, and Basin Electric, which serves cooperatives in the Dakotas and Montana. REAs are owned by their members/customers and governed by an elected board of directors that is responsible for key policy decisions. Rural utilities work hard to keep their rates low, which is a challenge because of the low population densities in sprawling service territories.
Wind power and rural electric cooperatives are natural partners. A glance at a wind resource map shows that the nation’s best wind sites are in areas served by rural electric utilities. The Great Plains, which is dominated by co-ops, has been called the “Saudi Arabia of wind power.” North Dakota, Texas, and Kansas have enough wind to meet the nation’s entire electricity needs. Other states with excellent wind resources include Oklahoma, Nebraska, Iowa, Minnesota, Colorado, New Mexico, Wyoming, Montana, South Dakota, North Dakota, Oregon, Idaho, and Washington.
The Co-op Challenge
Although wind power is an exciting opportunity for farmers, ranchers, and rural electric cooperatives, many rural electric utilities have been initially reluctant to embrace wind energy. Reasons for this include:
- Some REAs in the western Great Plains have lost customers and experienced declining loads. Unlike urban investor-owned utilities, many REAs do not need new sources of power.
- REAs typically do not own generation, so they may be reluctant to own and operate wind turbines.
- Transmission constraints also limit the amount of wind power that can be shipped to distant markets.
- Most REAs get the bulk of their electricity from coal-fired power plants. Coal is abundant and inexpensive in the heartland. It is difficult for a small wind project to compete with a 20-year-old coal plant.