Powering up progress.

• Author: Kaelble, Steve
• Position: Impact of Indiana's rural electric cooperatives on economic development

How Indiana's rural electric cooperatives aid economic development

Improving life in rural America was the goal years ago when rural-electric cooperatives began stringing electric lines from farmhouse to farmhouse along narrow county roads. That's still the aim today as Indiana's RECs work to promote economic development outside of the state's metropolitan areas.

"What we do is very consistent with our business," says Dick Heupel, director of economic development at Hoosier Energy, a Bloomington-based company that generates electricity for distribution by its member REGs. "Our founders brought the electric infrastructure to rural areas where none existed. Their purpose was to improve the quality of life and the economy in rural areas. Today, our economic health as an organization is determined exclusively by the health of the regions we serve."

Indiana's rural electric cooperatives take on the business of economic development with a somewhat different perspective than' investor-owned utilities might have. As cooperatives, they are in effect owned by their own customers, by the people who live in the communities they serve. "These are the communities in which we live and work," says Michael Core, executive vice president of the Indiana Statewide Association of Rural Electric Cooperatives. "We have a vested interest in opportunities and growth in the communities."

But RECs in particular need more commercial accounts to balance out their mostly residential customer base. "These kinds of customers tend to use their electricity at different times from the residential load, and we tend to be more residential," Heupel says. In fact, while homes make up just a third of the customer base at a typical metropolitan electric utility, REC customers may be as much as two-thirds residential. That forces RECs to service a disproportionately high energy demand during the hours that people tend to be at home.

"So anything we do to shift that load away from those times is a good thing. It makes for more efficient use of our plant," Heupel says. And these kinds of efficiencies reduce costs, which benefits RECs' owner-customers. "We've passed along a reduction of about 25 percent since 1987."

How do RECs go about encouraging economic development in rural areas? In many of the same ways that metropolitan utilities help out. "We're owned by 18 rural electric cooperatives, and 90 percent of what we do is through them," Heupel points out. These kinds of efforts are...