Klass & Chan: Cooperative Clean Energy
Cooperative Clean Energy (forthcoming North Carolina Law Review) examines the role and potential of rural electric cooperatives in movements toward clean energy in the United States. Authors Alexandra B. Klass (Minnesota Law) and Gabriel Chan (Public Affairs, Minnesota) start from the premise that rural electric cooperatives, which serve over 14 percent of the American population, have been overlooked in scholarship about accelerating our collective transition to more green energy sources.
Klass and Chan argue that rural electric cooperatives’ strategic retirement of coal-fired plants and transition to cleaner energy sources would not only reduce carbon emissions but also help ensure rural American energy infrastructures are secure and not, over time, stranded in a changing energy landscape. But, Klass and Chan are also realistic that the incentives currently in place for making this transition are not good fits for rural electric cooperatives. Unlike their investor-owned utility counterparts, these cooperatives are non-profit, tax-exempt, governed by boards elected by their consumers, and these consumers both own and purchase electricity from it. Therefore, more traditional federal and state policies—such as mandates, tax incentives, and strategies for shareholder pressure—that encourage clean energy in investor-owned utilities do not have the same effect on rural electric cooperatives.
Instead, Klass and Chan return to rural electric cooperaties’ original guiding principles and historical self-regulation purposes and set a course for more grassroots activism and locally driven efforts to reinvigorate rural communities’ participation in clean energy transitions. In the article, the authors evaluate three case studies of cooperatives around the country that have taken steps towards this clean energy transition and use these case studies as context for a range of proposed strategies to support a transition to cleaner and more equitable rural energy resources.
Ulitimately, Cooperative Clean Energy provides four approaches for rural electric cooperatives to move into a clean energy future. These approaches are: (1) increasing the value of the clean energy transition by more closely integrating cooperatives in wholesale markets, (2) rethinking cost allocation for clean energy investments, (3) rethinking cost allocation for the retirement of fossil fuel assets, and (4) bolstering support for internal governance structures that represent all cooperative members equitably.
Overall, the authors’ approach is unique because it does not rely on imposing new federal or state mandates or other regulations. Instead, it asks cooperatives to continue with their guiding principles and create a more robust support system for cooperative governance. In sum, the authors articulate that cooperatives’ ability to act as “self-regulating” and “self-governing” has the greatest potential to drive an urgent clean energy transition in rural electric cooperatives, to realize the goals of “energy democracy,” and most importantly, to encourage cooperatives to take steps right now in the face of climate change.
