Mergers, alliances put co-op principles in practice


One of the seven cooperative principles is “cooperation among cooperatives.” While all cooperatives strive to make that statement true, several Basin Electric member cooperatives take it a step further and employ it as a strategy to strengthen their businesses.

The Jan/Feb 2013 issue of Basin Today includes an article featuring three such cooperatives. They’ve come together with neighbors and friends to pursue mergers and alliances. Read Mergers and Alliances Put Co-op Principles in Practice.

An excerpt:

Humboldt County Rural Electric Cooperative in Humboldt, IA, is small but strong. Many of its 14 employees have long served the cooperative, including manager Steve Long, who surpassed 38 years in 2012.

Three years ago, as Long pondered his own retirement, he knew he wasn’t alone. Half of his small staff would be eligible for retirement in the coming years. And though the co-op was financially stable, it had no prospects for load growth and the lowest density of any cooperative in Iowa – less than two members per mile of line – leaving fewer members to bear ever-rising costs. Long was finding it harder and harder to go back to the membership to request rate increases.

“When 70 percent of every dollar goes for power costs, and by the time you subtract interest and depreciation, that doesn’t leave you with very many dollars to run a co-op,” he says.

Humboldt County’s directors took a look at the bigger picture. “Our board felt it was time to visit with the neighboring co-ops to see what interest there was before we went out and started filling positions. Did it make more sense to merge than to fill positions?” Long says.

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