The challenge of association in rural electrification.

• Author: Martin, Ed

The rural electric industry contains many collective-action cooperatives, including G&Ts, NRECA, state associations and CFC, to help overcome strategic disadvantages that a single distribution system may have, and are a critical link in the chain to successfully serving the retail consumer. Managing a single distribution system is difficult, but becomes more challenging when it must be done in conjunction with these other cooperatives. Our author stresses the requirement of a "cultural change" to a new and complex set of management skills to learn how to use collective-action opportunities and to overcome any associated problems.

Consider the brief history of the Rural Electric Industry: Cooperatives began; Cooperative associations began; Trouble began! Trouble? Yes, and the sequence has quite a biblical ring. The ideal "beginning" has become tarnished. But why should something as purely motivated as working together for the common good be plagued with so many problems? The difficulty lies not with the motive but with a failure to recognize the complexity of the process. Ideally, a cooperative can accomplish much more than a single unit. And an association of cooperatives can accomplish more than a single cooperative. But each type of cooperative is unique and requires a different set of management skills . . . and that's where the trouble begins.

In its most basic form, a distribution cooperative is a relatively small business comprised of individuals who have joined together to provide electric power for their neighbors and local community. Collective-action cooperatives expand the principles of cooperation between neighbors--to one of collaboration and cooperation between distribution cooperatives, G&Ts, the NRECA and others associated with rural electrification. In this way, individual cooperatives can work together to overcome the strategic disadvantage of their relative small size.

On the surface, collaboration and cooperation appear to be simple management tools. Even the most "well meaning" often arrive at the false conclusion that cooperatives are easy to manage due to the local nature of rural electrics. But in reality, managing a single cooperative in conjunction with other cooperatives is difficult. It requires a new and complex set of management skills that represent nothing less than a "cultural change." But culture is steeped in tradition and change is not easy. Consider these complicating factors: (1) Local boards are...