The members of rural electric cooperatives can't control their electric rates any more than the customers of investor-owned utilities such as Public Service Company of New Mexico. But they have one advantage over PNM customers: They can change management at the ballot box.

Plus, their membership meetings can be almost as much fun as a professional wrestling match.

Take the Mora-San Miguel Electric Cooperative that serves more than 10,000 people in four counties, including a little corner of Santa Fe County. Two years ago, the members voted at the annual meeting to reduce the board's size from 11 to five. Six months later, the board called a special election in the middle of the week in the little mountain village of Mora to re-vote on the matter.

"Some of the board members that were going to be kicked off because of the earlier vote cooked up the special election in the middle of day and middle of week when everyone was working," said Ed Littleton, a cooperative member from Ojo Feliz, N.M., who attended the meeting.

More than 850 people — three times the usual number who participate in the annual elections — took time off from work and braved icy roads to show up for the special election at the VFW building. "It got into a screaming match, and almost a fistfight, between board members who were losing positions and some of the co-op members who were championing the reduced board size," Littleton said.

The members voted overwhelmingly to uphold the board reduction.

A similar issue drew heated debate at the Kit Carson Electric Cooperative's annual meeting in June. State Rep. Al Park, an Albuquerque attorney, was invited to act as parliamentarian because the meeting was expected to be controversial. And Park was impressed. As a PNM customer, he said, "I don't get to say anything. They read my meter and I pay the bill." This was different. "It is not representative democracy. It is democracy in action," he said.

Going renewable

While New Mexico's largest cities are powered by investor-owned, public utilities such as Public Service Company of New Mexico and El Paso Electric, most of the state is served by 16 rural electric cooperatives. More than 200,000 New Mexicans rely on them for power to run their homes and businesses.

Electric cooperatives follow a different set of rules than investor-owned utilities, but they are facing many of the same challenges including a new renewable energy requirement. They must get 5 percent of their electricity from renewable sources by 2015 and 10 percent by 2020.

Kit Carson dove into solar energy a couple of years ago. The cooperative serves 28,000 people in Colfax, Rio Arriba and Taos counties. It just finished construction of a 500-kilowatt solar array on 3.5 acres at The University of New Mexico-Taos. The campus now produces enough energy to meet its own needs, with a little left over to feed back into the grid.

Luis A. Reyes, Kit Carson's general manager, said the co-op's next project is installing a parking lot canopy that doubles as a solar photovoltaic system. The cooperative's goal is to have 1 megawatt of solar power distributed around the valley and online for customers.

Tri-State Generation and Transmission Association, the company that produces power for 44 electric cooperatives, including 12 in New Mexico, is building a 30-megawatt solar concentrating facility near Springer. When finished, it will be one of the largest solar energy plants in the country.

The state's 16 electric cooperatives had renewable energy — hydroelectric — as part of their energy mix portfolio long before there were mandated standards. "Since the 1920s and '30s, we've been 20 to 30 percent renewable through hydroelectric power (from Glen Canyon Dam)," said Keven J. Groenewold, general manager of the New Mexico Rural Electric Cooperative Association.

But hydroelectric power isn't counted under the renewable energy standard, he said.

Long-term power contracts with Tri-State also hamstring the ability of rural cooperatives to use more renewable energy. Tri-State controls where its cooperative members get 95 percent of their power, and most of it right now is from coal-fired power plants. Under their contracts, cooperatives are only allowed to buy 5 percent of their annual power needs from other sources, including their own renewable energy systems. Five rural cooperatives in Nebraska sued Tri-State in federal court in September over this issue. They aim to break their contracts and seek cheaper power.

Groenewold acknowledged that rural cooperatives have been attacked by environmentalists for not supporting renewable energy, but he believes that "whatever is done with renewable energy has to be affordable, reliable and available. Outside of that, we don't care what you do."

Birth of electric cooperatives

According to Groenewold, electric cooperatives differ fundamentally from investor-owned utilities in purpose. Co-ops are in business to provide power to rural customers, he said, while "investor-owned utilities are in it to maximize profits."

PNM disagrees with that analysis, since its rates and return on investments have to be approved by the state Public Regulation Commission. But it's true that cooperatives don't have to please investors, only their members.

They owe their existence to the federal Public Utility Holding Company Act of 1935, legislation that regulated investor-owned companies such as PNM and created new, member-owned electric cooperatives.

Prior to passage of the legislation, 90 percent of all power generation was owned by 19 companies, according to the federal Energy Information Administration. And many homes were left out. "The big companies were cherry picking, only serving people along certain roads," Groenewold said. But once a rural electric cooperative chose a service area, "they had to serve everyone — eventually," he said.

Originally, New Mexico's rural electric cooperative members paid $5 to join. That bought them a connection to the electric grid and the right to vote on board of trustee memberships and co-op bylaws.

Upfront loans to install lines were provided through the federal Department of Agriculture's Rural Development Electric Program. World War II interrupted the efforts of several cooperatives to provide power to members, but after the war was over they worked to string thousands of miles of power lines across steep mesas, over deep canyons and through rugged mountains to reach ranch houses, farms and villages.

Over the next couple of decades, power reached the most remote areas of rural New Mexico.

Some of the early co-op applications were turned down by the federal government because the cooperatives had too few customers to make the utility financially viable. The Jemez Mountains Electric Cooperative wasn't approved until it bought a small investor-owned utility in Española in the late 1940s. Now the cooperative serves more than 30,000 customers in five counties including the northern edge of Santa Fe County.

Utility companies and investors have fought hard to repeal the 1935 act, saying it was antiquated, burdensome and squelched competition in the energy industry by requiring financial regulation of utility holding companies. "That same reasoning led to the banking deregulation that was behind America's recent economic problems," Groenewold said. "Rural electric cooperatives fought against repealing the act."

In the end, Congress got rid of the act in 2005, shifting some of the regulatory authority to the Federal Energy Regulatory Commission. Sen. Jeff Bingaman, D-N.M., supported repeal of the Public Utility Holding Company Act, saying it would allow needed investment in electric infrastructure.

Energy efficiency before it was cool

New Mexico's rural electric cooperatives brag they were promoting energy efficiency long before the phrase became politically popular.

In 1972, they handed out orange pamphlets containing 30 ways to cut the cost of heating homes. A lot of those ideas haven't changed — weather-stripping, improving insulation and turning down the thermostat.

Groenewold, an electrical engineer, said energy efficiency always made sense for customers. The less electricity people used, the less they had to pay on their bill each month.

Electricity use varies widely by cooperative. Mora-San Miguel Electric Cooperative's members use the least electricity per month, averaging 420 kilowatt-hours. Roosevelt County Electric, which serves the needs of many farms and oil and gas operations, averages 1,008 kilowatt-hours.

Rates for electric cooperative customers vary from 8 cents to 18 cents per kilowatt-hour. "The more people using electricity in a cooperative, the cheaper it is (per unit)," Groenewold said.

The rural electric cooperatives opposed a law approved by New Mexico state legislators in 2005 that allowed the companies to add an energy-efficiency tax to electric bills, effectively requiring people to pay more for steps they have taken to reduce consumption. "We're saying, don't make us charge our customers a tax to do what they've been doing," Groenewold said.

The law requires public electric and natural gas companies such as PNM to offer their customers energy-reduction programs, but allows the companies to charge an "energy-efficiency" fee. PNM's energy-efficiency programs approved by the state Public Regulation Commission offer customers rebates for trading in energy-guzzling appliances and lighting for more efficient ones, and incentives for building energy-efficient homes.

An electric cooperative has to have an energy-efficiency plan in place, but the plan must be approved by the co-op's board, not the PRC. Cooperatives can also collect fees from their members for renewable energy and conservation, but the fees must be no more than 1 percent of a customer's bill. The money has to be maintained in a separate account and must be used only for renewable energy, managing power loads and energy efficiency. Roosevelt County Electric Cooperative is the only one to establish such a fee for members so far, according to the U.S. Department of Energy's database of state incentives.

Groenewold said many rural electric cooperative customers can't afford increases in energy costs, so it is unfair to charge them for energy-efficiency programs.

"Our co-op members are the poorest of the poor in the state," he said. "Energy efficiency for some of our members means around Thanksgiving they go out and stack straw bales around the trailer up to below the windows. Then in the spring, they take the bales down."

Kit Carson's Reyes said his customers have already reduced energy use from 600 kilowatt-hours a month to 480 kilowatt-hours a month. "Our argument when state and feds put up these standards is how much lower can we go? We've already done about as much energy efficiency as we can without hurting our quality of life."

Looking ahead

Investor-owned utilities and electric cooperatives share one main problem for future power delivery — an aging transmission structure that is close to capacity.

Whether electricity comes from nonrenewable or renewable sources in the future, more transmission lines are needed. Groenewold said rural cooperatives have 45,000 miles of existing power lines and right-of-way easements in New Mexico. "That may be our biggest asset," he said.

Those easements could be used for new fiber optic lines, he said. "We're the perfect testing ground for a smart grid."

A smart grid allows utility customers and distribution centers to control the timing of power to customers electronically. Power can be reduced or shut off to customers when they aren't at home or during peak power periods when electricity costs more. Smart-grid technologies could be tested within rural cooperatives and replicated elsewhere.

"If you take a small smart-grid project over 1,000 miles of line in Taos, that can be replicated elsewhere," Groenewold said.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.

By The Numbers

Number of New Mexico electric cooperatives: 16
Number of consumers served: 203,107
Average kilowatt-hours used per month: 565
Total miles of electric line: 44,486  


ON THE WEB

The National Rural Electric Cooperative Association has helped establish rural electric cooperatives around the world. For more information and to see photos of the association's projects, go to www.nrecainternational.org/.