Issue 1

Yes, There is a difference

During the past several years, as we have debated issues before North Dakota’s Legislative Assembly, we have often heard supporters of cooperatives claim there really is no big difference in how cooperatives and shareholder owned utility companies conduct business. We are often told a cooperative is just a different form of free enterprise.

Free enterprise?

As during almost every summer, certain parts of North Dakota suffered damage from summer storms during 2003. One of last summer’s casualties was a 345,000-volt transmission line that delivers electricity from a plant near Center, ND to consumers in eastern North Dakota and western Minnesota. Minnkota Power Cooperative based in Grand Forks owns this 345KV transmission line.

And as we all know, transmission lines cost a lot of money to build, and it costs a lot of money to repair them when they are damaged.

Here comes FEMA.

The Federal Emergency Management Agency stepped in and awarded Minnkota Power Cooperative a grant of some $1 million or more dollars to help repair the storm damage. But did you know that if that damaged transmission line had been owned by Montana Dakota Utilities, Xcel Energy or Otter Tail Power, the storm damage would have been paid for entirely by either their shareholders or their customers or by a combination of the two?

FEMA dollars are not available to help repair storm damaged facilities owned by private utility companies, but ALL taxpayers can be tapped to repair storm damaged cooperative property.

It certainly doesn’t seem that a rural electric cooperative operation meets the definition of free enterprise when state and federal income tax dollars are partially used to fund rural electric cooperatives. And most especially so because these taxpayer subsidized cooperatives are continuing to enjoy unlimited growth by serving electricity customers in growing ND cities in direct competition with shareholder owned, tax paying, companies.

This article should not be construed as being critical of Minnkota Power Cooperative, which does a good job supplying electricity to its rural consumers. But rather, this article’s purpose it to point out one more reason why rural electric cooperatives should not be viewed as a “free enterprise” operation, in spite of what you may see in slick television advertisements.