I read the news articles in The Madison Daily Leader about the Dakota Energy lawsuit against East River Electric. I agree that they should have the right to buy power from whoever has the cheapest power which will result in cheaper rates for their members.
The REA movement was established in 1936 to provide cheap power to the farm and ranch areas that were not profitable for the private power companies or the municipal electric utilities to serve. The REAs started out to be an efficient organization that served their members with cheap reliable electricity. They received tax breaks from state and local government and federal government subsidies, which enabled the REAs to provide low-cost reliable electric service to their members.
As time went on, over 90% of their new member customers are nonfarm or ranch related. The REA organization has evolved into the most inefficient organization I have ever witnessed. They have no desire to provide cheap electricity to members even though they still get tax breaks, and government subsidies, but due to their inefficient operations, their rates are higher than the private power companies, who make a profit for their shareholders.
I think we need to inject competition into the electrical industry both in the private and cooperatives, but most important to the cooperatives, because the private power companies are responsible to their shareholders as well as their customers.
However,the REAs spend more time brainwashing their members as to how great they are, and courting the local and federal politicians to pass laws that would favor their position, than they do in trying to run an efficient operation. A good example is the telephone cooperatives which have to keep their rates low to compete with the private telephone companies because of the deregulation.
The ideal way to inject competition would be to deregulate the electric utility industry, and I bet in a short while the rates would come down, and we would see an efficient operating organization again. I'm not sure that will happen, because the politicians are not smart enough to figure out how to accomplish that.
However, if the distribution cooperatives were allowed to purchase power from the company that has the cheapest rates would be a step in the right direction to inject competition in an electric cooperative movement, like Dakota Energy is trying to do.
Wentworth, March 31