Riverland Energy Cooperative

Brady WilliamsUniversity of Wisconsin—Madison

Riverland is a cooperative that distributes (doesn’t generate) power to rural areas of three western Wisconsin counties—Trempeleau, Buffalo and La Crosse

Approximately 14,600 members Anyone with home or business connected to their grid is a

member Relatively new cooperative (1999), but has roots in

New Deal Rural Electrification Administration of the 1930s

Is highly integrated with other cooperatives Prioritizes quality service to members over cheap rates

Overview

Primarily distributes power from substation to home / business for rural residents of Trempeleau, Buffalo and La Crosse counties while urban residents are served by Xcel energy, a private utility

Monitors temperature, water and power for Gold n’ Plump chicken growers

Wholly-owned subsidiary Riverland Communications provides personal emergency response services, direct TV service, and wireless internet (via satellite for most remote members)

Services

In 1920s and 30s, private utilities brought power to populated areas

Rural (especially agricultural) areas were left in the dark due to lack of profitability in extending lines

REA made loans available to groups of rural people (often farmers) who wanted to found rural electric cooperatives

Met with strong opposition by investor-owned utilities Most cooperatives founded by county; Trempeleau and

Buffalo cooperatives created at this time These two cooperatives merged in 1999 forming

Riverland Energy Cooperative Increased efficiency and better service for members

History

Each home or business that receives power from Riverland is treated as a member with the ability to exercise one vote (17,000 meters, 14,600 members)

Bigger customers get discounted rates but not more voting power

Governed by a 9-person all-member board (one from each district) which advises the general manager Each district elects 15 members to serve on the district

committee; committees then nominate potential board members

The district committees receive a special board briefing on the last year’s activity of the co-op and the future direction over the next year

Structure

Board members serve 4-year terms (limited to 4 terms)

Board elections occur 3 out of every 4 years. (3 per year, then an “off-year”)

Much less costly than yearly elections Training of board members time-intensive and

costly. Want each member to have a good understanding of the cooperative model

About 30% turnout for elections

Structure

Other than board participation and voting, relatively little member participation in daily functioning of co-op (offers very specialized service)

What features (other than 1 member, 1 vote decision making) distinguish Riverland as a co-op as opposed to an investor-owned firm?1) Emphasis on service and member programs2) High reliance on other cooperatives in its operations

Structure

Riverland’s American Customer Service Index rating ranked 8 points higher than the area’s private utility (100 point scale). Why might this be the case? Good communication

Rates especially high on “friendliness” Communication about outages affecting 25+ members Challenge in communicating with members from non-

rural backgrounds Dedication to service technology over cheap rates

State-of-the-art software combined with flyover maps increased monitoring effectiveness

Automated GPS-driven truck monitoring system helps fix outages more quickly

Automated metering

Communication, Service and Programs

Special member programs Co-op will pay for energy audit (but most

suggestions aren’t implemented) CHERP (Cooperative Home Energy Retrofit Project)

Cooperative effort w/ Center on Wisconsin Strategy and two other energy co-ops

Seeks to reduce financial barriers to energy-saving retrofits in rural areas

Targets people with low income, but who don’t quite qualify for government assistance

Co-op personnel will coordinate activities and administrate program

Communication, Service and Programs

CHERP Program centered on pre and post retrofit energy

audit Energy improvements that have a positive

return on investment within 10 years On-bill financing through the cooperative such

that annualized energy savings at the very least offset loan payments

Just beginning pilot phase

Communication, Service and Programs

Dairyland Electrical Industries Owns power plant, transmission lines and substations Is collectively owned by Riverland and ~25 other rural

electricity cooperatives Cooperative Finance Corporation

Exclusive lender for Riverland Cooperatively owned by many electricity co-ops

around the country Importance of debt financing for electricity distributors

60% of annual construction costs are debt financed Don’t want current customers to have to subsidize future

infrastructure

Integration with other Cooperatives

ROPE (Restoration of Power in an Emergency) Riverland shares help with neighboring electric

cooperatives during times of need Sent crews to Louisiana during Katrina

CHERP involves partnership with two other co-ops

Integration with other Cooperatives

Does it matter that Riverland is a cooperative? YES!

Focus is clearly providing the highest level of cost-effective service to its members through open communication, efficient technology and targeted programs

High level of cooperation and integration with other cooperatives makes providing these services possible

Conclusion

Special thanks to David Oelkers, General Manager, Riverland Energy Cooperative