Study examines economic impact of electric cooperatives

Study examines economic impact of electric cooperatives South Dakota's electric cooperatives and Gov. Mike Rounds Tuesday unveiled results from a study examining the economic contributions the state's electric cooperatives have on local communities across the state.

"This study quantified the major impact that electric cooperatives have on not only the state of South Dakota, but more particularly on mostly small towns and rural communities where the cooperatives serve," said Ken Wetz, chairman of the task force of electric cooperative leaders who commissioned the study. Wetz is manager of Butte Electric Cooperative in Newell.

"Most cooperative headquarters and facilities are located in small towns that struggle to grow or attract industry with good jobs. The study highlights the efforts the cooperatives have made and are continually making to improve our communities and the state of South Dakota," said Wetz.

The study, "South Dakota Electric Cooperatives' Contribution to the State's Economy" was published earlier this year. The study examines the contributions electric cooperatives make through economic investment, community support, taxes and employment and consumer benefits.

"This study demonstrates how our cooperatives embody the seventh cooperative principle � concern for community. This principle pledges that cooperatives work for the sustainable development of their communities," said Audry Ricketts, general manager of the South Dakota Rural Electric Association in Pierre. "This commitment guides cooperatives in helping communities create and sustain jobs, work to improve life for the community's residents. It's simply what cooperatives are about."

"For more than 60 years, electric cooperatives have been providing crucial service to their member-owners. But the contributions these locally-controlled businesses have on the state's economy are far-reaching. This study quantifies these economic contributions," said Ricketts.

This commitment demonstrates what will lead to success in the state.

"When we look at the loan programs that you have set up here, it shows an understanding of what it's going to take to keep rural South Dakota alive, and that's investment and leadership," said Gov. Mike Rounds after reviewing the results of the study.

Results of the study showed that in the economic development arena, electric cooperatives generated more than 800 new jobs and retained more than 1,640 existing jobs through sponsorship of revolving loan funds between 1997 and 2001; invested more than $10.8 million during that time frame and provided nearly $15 million in economic and community development loans to 88 different organizations.

"When nobody else would come out here and put together a plan, the rural electric co-ops did. You talk about those jobs that you see as directly related to the work you do today, I think you are grossly underestimating what you have actually done," said Rounds.

As locally-owned businesses, the cooperatives have a tremendous impact on local communities, the study showed. From 1997 to 2001, cooperatives donated more than $1.2 million to civic and community development activities.

And, because the cooperatives' employees live in the communities where they work, those employees contributed more than 52,000 hours on volunteer projects in 2001.

These volunteer hours have a monetary equivalent of more than $1 million. These volunteer hours average 55 hours per employee � more than triple the number of hours recognized as the national standard for employee volunteer program excellence for Fortune 500 companies.

Cooperatives also purchased more than $244 million in goods and services a year, based on 2001 figures.

The state's electric cooperatives also contributed more than $35.5 million in taxes between 1997 and 2001.

With an employee count of 955 people, cooperatives are collectively the 24th largest private sector employer in the state.

And finally, cooperatives invested in the people who own the cooperative. More than $20 million was returned to cooperative member-consumers for energy efficiency programs in 1997-2001.

Additionally, cooperatives refunded almost $30 million in capital credits to member-consumers in the same time frame.

The state's 29 electric cooperative distribution systems and three generation and transmission electric cooperatives serve nearly 300,000 people across 90 percent of South Dakota's land mass.

These systems are member-owned utilities established to provide at-cost electric service to more than 93,000 farms, homes, schools, churches, businesses and other establishments across the state.

South Dakota's electric cooperatives are the only electric utility to serve member-owners in every county of the state.

South Dakota's electric cooperatives provide electricity to more than 90,000 homes, farms and businesses in the state, averaging only 2.06 consumers per mile of line.

Nationally, cooperatives average 6.6 consumers per mile of line while national and state investor-owned utilities average about 30 consumers per mile of line.

South Dakota's member-owned and member-controlled electric cooperatives are incorporated under South Dakota law as nonprofit cooperative business corporations with the basic responsibility of delivering electricity and other vital services.

They are further affiliated as part of the Touchstone Energy Cooperatives brand � a brand that reinforces the cooperatives' dedication that cooperatives have to serving consumer-members with integrity, accountability, innovation and commitment to community.

SDREA is the service association of the state's electric cooperatives and is devoted to unifying, promoting and protecting the interests of member electric cooperatives in South Dakota by providing leadership, training, communication, legislative representation and other member services.

Each of the 32 SDREA-member cooperatives selects a director from their local board, which is elected by the cooperative's membership, to represent the cooperative on the SDREA board of directors.

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