Cooperative Clean Energy

57 Pages Posted: 5 Dec 2020

See all articles by Alexandra B. Klass

Alexandra B. Klass

University of Minnesota Law School

Gabriel Chan

University of Minnesota - Minneapolis - Humphrey School of Public Affairs

Date Written: November 21, 2020

Abstract

The last decade has seen significant attention and debate among academics, policymakers, and the broader public about how to accelerate the “clean energy transition” in the United States. Legal academics have made valuable contributions to the literature in this field, developing a rich body of scholarship on a broad range of legal, policy, economic, and technological aspects of the clean energy transition in the electricity sector. But this scholarship has for the most part ignored the role of rural electric cooperatives, which serve 14% of the U.S. population. This scholarship gap has important implications. Rural electric cooperatives, first created by local communities in the United States in the early part of the 20th century to electrify rural America, own and continue to operate a significant percentage of the nation’s coal-fired power plants. Retiring these plants and replacing them with clean energy would reduce the nation’s contribution to global climate change and help ensure that rural America is not left with billions of dollars of stranded coal-fired power plant assets that can no longer compete against low-cost renewable energy.

In this Article, we draw on the structure and foundational principles underlying the cooperative form itself to create a framework for clean energy transition in rural electric cooperatives. Notably, the proposals we develop in this Article do not rely on imposing new federal or state clean energy mandates on cooperatives, as has been the focus of the limited legal scholarship that exists to date. Although such mandates can be very effective, the long history of Congress and state legislatures allowing cooperatives to “self-regulate” makes reliance on such mandates a limited solution at best. Instead, we draw on the “Cooperative Principles” that govern all cooperatives—open and voluntary membership; democratic member control; members’ economic participation; autonomy and independence; education, training, and information; cooperation among cooperatives; and concern for community. Emphasis on these principles allows cooperatives to engage in the clean energy transition in a way that builds on their history and foundational principles as self-help organizations controlled by their members. Such an approach also recognizes the increasing grassroots activism within cooperatives that has the potential to increase democratic accountability focused on clean energy deployment along with calls for increased racial and social equity in cooperative governance.

Keywords: rural electric cooperatives, clean energy, climate change, clean energy transition, exit fees, cooperative principles, cooperative governance, utility regulation, racial equity, social equity, clean energy mandates, securitization, accelerated depreciation

JEL Classification: K23, K32, D4, Q3, Q4, Q5

Suggested Citation

Klass, Alexandra B. and Chan, Gabriel, Cooperative Clean Energy (November 21, 2020). North Carolina Law Review (2021 Forthcoming), Available at SSRN: https://ssrn.com/abstract=3735189 or http://dx.doi.org/10.2139/ssrn.3735189

Alexandra B. Klass (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-625-0155 (Phone)

Gabriel Chan

University of Minnesota - Minneapolis - Humphrey School of Public Affairs ( email )

130 Humphrey School, 301 19th Ave. S
Minneapolis, MN 55455
United States
612-626-8910 (Phone)
612-625-3513 (Fax)

HOME PAGE: http://www.hhh.umn.edu/

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