Members of MREA are electric cooperatives – Community-Based Energy Companies
- Private, locally-operated electric utility businesses.
- Owned and rate regulated by our customers.
- Established to provide at-cost electric service.
- Governed by a board of directors elected from the membership, a board that sets policies, procedures and rates implemented by the cooperative’s professional staff.
Cooperatives are rural economic drivers
- The distribution and generation and transmission cooperative members of MREA employ 5,968 people. These are good jobs with good wages and benefits.
- We serve 813,000 customers or about 1.7 million Minnesotans. The median-sized co-op is 8,366 members. Cooperatives range in size between just under 1,900 to more than 129,000.
- We supply over 14.7 billion kWh per year (about 18 percent of the state’s total kWh sold) and generate $1.5 billion in revenues.
- We operate at close-to-cost (a certain level of margins is required by lenders), which provides competitive energy costs for rural and suburban Minnesota businesses and consumers.
- Revenues above our operating costs are returned to members through capital credits. An average of $26 million a year is returned to customers by the state’s electric cooperatives.
- We invest in our communities. Minnesota cooperatives typically are near the top of the 50 states in the use of Rural Economic Development Loans and Grants issued by the USDA.
Cooperatives face different challenges than investor-owned utilities or municipal utilities
- We provide electricity for 85 percent of the geographic area in Minnesota
- Our distribution network (lines and substations) is the largest in the state by far, with more than 148,000 miles of electric distribution. That’s significantly more than Xcel Energy’s Minnesota operation (28,718), or the four private power companies in Minnesota combined (40,722), which reflect significantly higher capital costs.
- We average 7.4 consumers per mile of distribution line, compared with 38 consumers per mile for investor-owned electric utilities and 48 customers per mile for municipal electric utilities.
- Our revenue per mile of line nationally ($15,000) is a fraction what it is for investor-owned ($75,500) and municipal utilities ($113,000), making it harder to spread out the cost of investments in renewable energy and conservation.
- 79% of co-op consumers have a per capita income below the state average, meaning that rate increases impact their budgets significantly.
- We have significantly fewer commercial and industrial accounts, which means conservation programs are more costly and difficult.
2017 Minnesota Legislative Session accomplishments:
The 2017 legislative session ended with a short special session. The Minnesota rural electric cooperative priorities were signed into law by the Governor on May 30 as part of the Jobs/Energy (SF1456) and Public Safety (HF 470) Omnibus Bills.
The local democracy legislation was our main priority, it strengthens local communities by underscoring local decision making. This legislation was about local decisions and driving innovation based on community needs. Legislators across the state know that cooperative local governance has resulted in innovative electric cooperatives providing the essential services Minnesota communities need and want.
The legislation removes duplicative PUC regulation and will save our members time and money. The lasting effect of this legislation is stronger communities through local decision-making authority. This key cooperative difference needs to be protected and reinforced. With this legislation, we’ve done that, establishing that decisions on how to innovate, to change in the face of an evolving energy industry, need to be made locally by elected boards of directors who understand their communities.
Our second priority this session will also have lasting impacts and strengthen rural communities. A carry-over from the changes we made to federally declared disaster relief in 2015, electric cooperatives are now eligible for relief in state declared disasters. This change will provide electric cooperatives the ability to recover some of the costs associated with large-scale disasters, reducing the expense to the member-owners of our cooperatives. We partnered with the Association of State Emergency Managers on this legislation and will continue working with them to integrate this new authority into the state’s disaster response efforts.
Thank you to everyone who helped to make the 2017 session successful.