ILLINOIS
COMMENTS
  From Poles And Wire To High Tech
The evolution of Illinois electric cooperatives

Mick Cummins
former manager
SouthEastern Illinois Electric Cooperative

In the mid 1930s only those rural farms and residences that could afford to pay construction charges ranging from $2,000 to $5,000 per mile, and had enough income to pay monthly energy charges, which typically ranged from 8 to 25 cents per kilowatt hour, could afford the luxury of electric service. Consequently only 10 percent of rural America was electrified at that time. Rural Illinois residents wanted and needed electricity, but it seemed like an impossible dream until the Rural Electrification Act (REA) was passed in 1935.

Need and opportunity often partner to ­create solutions and before long, Illinois established a State Rural Electrification Committee, formed from the members of the various farm ­organizations, the State’s Department of Agriculture and the ­Illinois Commerce Commission. Combined with the ­efforts of hundreds of farmers who did the man­datory groundwork of promoting rural elec­trification and collecting the typical $5 membership fee, 27 electric cooperatives had been organized by 1940. With loan funds provided through the REA, power lines were finally being constructed in rural Illinois.

Although those early electric co-ops ­provided their members with the modern miracle of ­electricity, they were not very sophisticated by today’s standards. At least one of them provided its members with pre-addressed post cards as a means of outage notification, and generally speaking, all of them were just poles and wire companies who resold energy purchased through short-term contracts with the nearest investor-owned utilities.

Those short-term supply contracts subjected the co-ops to periodic and substantial rate increases and it wasn’t long before co-op members and directors became disenchanted with their limited and expensive power supply options.

It was Illinois’ own Abraham Lincoln who said, “Towering genius disclaims a beaten path. It seeks regions hitherto unexplored.” Apparently following that advice, several co-ops joined together with the City of Cairo in 1947 to seek alternative sources of generation, including tapping into the TVA system via transmission lines which they hoped to build from Illinois into Kentucky. ­Although that particular effort did not come to fruition, a number of co-ops did receive rate reductions and were able to sign longer-term supply contracts as a result of the attempt.

In the ensuing decades, Illinois co-ops con­tinued to pursue the goal of providing their members with safe, reliable and affordable service, a goal that eventually led to the construction of two co‑op owned power plants in the Illinois by 1965.

Now let’s fast-forward some 30 years to the era of deregulation. In 1996, Federal Energy ­Regulatory Commission (FERC) Order 888 provided open ­access to the nation’s transmission grid. That change allowed some co-ops to purchase energy from power marketers and other providers at a lower cost than was available from their incumbent provider. However, over a period of time the market value of power began to increase again, creating the same price uncertainty in the late 1990s that co-ops experienced in the 1940s. Several co-ops found they could renew their alliances with the power supply co-ops at contract terms and rates more favorable than those available from the competitive wholesale market.

At the present time, 25 co-ops are operating in our state. Of those 25, 11 receive power from the Soyland Power Cooperative of ­Jacksonville, six are members of the Southern Illinois Power ­Cooperative at Marion, three belong to the ­Wabash Valley Power Association headquartered in Indianapolis, Indiana, two purchase from Ameren, one is a member-owner of Wisconsin’s Dairyland Power Cooperative and two acquire their energy needs from power marketers.

Although all 25 co-ops are the children of the same poles and wire company environment of the 1940s, each has evolved into an entity that meets the unique needs of its members and geographic area. Combined, they provide a myriad of services other than electricity, including water, sewers, ­Internet, propane, natural gas and home security, just to name a few. All utilize advanced tech­nology to better serve their members. Today the same co‑op that once provided its members with post cards to report outages, now remotely checks each of its 24,000 meters every hour to ensure service is available.

Co-ops are installing innovative technology at a fast pace, but the co-op philosophy and principles remain unchanged and rock solid. Co-ops are still anchored to their local communities and base their decisions on what is best for the member-owners.

Every co-op still holds an annual meeting where members elect other members to the board of directors, and learn about their co-op’s current operation and future plans. During such ­meetings, each co-op’s leaders discussed the option of participating in retail deregulation as provided by the Illinois Electric Service Customer Choice and Rate Relief Law of 1997. After evaluating the ­option to participate in retail choice, 24 ­cooperatives concluded that participation is just not in the best interest of their members at the present time. ­Observing the chaos caused by deregulation so far we should be thankful this decision remained under the control of locally elected co-op leaders.

Overall co-op members want the same thing that every other electric consumer in Illinois wants—reliable and affordable electric service. The co-op form of business, where members own the utility, helps ensure that is what they will receive.

Finally, our state has tremendous coal reserves, with an estimated capacity sufficient to power ­every home in Illinois for the next 1,000 years, and yet we continue to import coal and electric energy from other states, adding to the uncertainty of electric energy price and supply. Illinois coal reserves provide us with the opportunity to construct mine mouth power plants utilizing available, proven, low emission technology. The construction and operation of such mine mouth generation would help stabilize future electric costs, provide needed employment, improve our tax base and lessen our dependence on foreign fuel. We can be the leader in energy independence if we are willing to follow Lincoln’s advice and, “…seek regions hitherto ­unexplored.”

 

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Mick Cummins is the former manager of SouthEastern Illinois Electric Cooperative. He recently retired from the co-op, but is still working as a consultant.