Electric Cooperatives and a Changing Power Industry: How Outdated Statutes Short-circuit Competitive Markets

Publication Date: August 2002

Publisher: Reason Foundation

Author(s): Lisa A. Skumatz; Terri Kandalepas; Lynne Kiesling

Research Area: Energy

Type: Report

Abstract:

In this study we argue that much of the decades-old public policy governing electricity cooperatives has become obsolete due to changes in technology, incomes and demographics in the American economy. Cooperatives are seizing opportunities to make the most of burgeoning competition, but they still argue for being treated more favorably than other private companies. We focus on three particular policies: tax exemption, loan subsidies and guarantees, and preference in purchasing power from federal generators. These policies, relics of the rural electrification movement, are not suited to a competitive environment.