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Do investor owned utilities and
rural electric cooperatives work together?
You bet! The history of utility
company and utility cooperatives working together goes back to the
beginning of the Rural Electrification Administration (REA) activity
in North Dakota. As the various rural electric cooperatives formed
during the 1930s, they needed electricity to meet the rapidly growing
demands of their rural customers. They purchased power through
contracts with North Dakota's investor-owned utility companies, who
delivered the energy across their own transmission lines.
Supply contracts for power were
common and remained in place until the United States Government
entered the private electricity market. When the government built and
started to operate hydroelectric dams and power plants, the REA
started to provide funding for the other elements necessary for an
integrated electric system. With these major changes in the market,
long term supply contracts between cooperatives and IOUs came to an
end.
The federal government and the REA
seemed more interested in building a government-owned electric supply
system than they were in just providing electricity to unserved areas
of the nation, however. When investor-owned utility companies in North
Dakota applied for REA funding to build additional generation
facilities to supply power to the co-ops, they were denied.
As the utility industry has matured
in North Dakota, however, supply contracts once again are part of
everyday utility operations. Further, joint transmission and
maintenance agreements between the various utilities reduce
duplications and provide economies of operation.
Investor-owned and co-op systems are
intertwined. They rely on each other to provide reliable electric
service to their respective consumers. That's one of the reasons
that--if we are to enter a fully competitive retail and wholesale
electricity market--all utility organizations must be on equal
legislative and regulatory footings.
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