South Dakota�s electric cooperatives have nearly a $250-million impact on the state�s economy, a Vermillion-based researcher has concluded.
�In terms of total economic activity, the $248.8 million in expenditures by the 30 South Dakota electric cooperatives generated an additional $111.3 million in economic activity throughout the state, yielding a total activity or output multiplier of 1.45,� wrote Randall M. Stuefen of Stuefen Research, LLC.
Stuefen�s research was based on a survey of the economic contribution of South Dakota�s 30 electric cooperatives as reported in SDREA�s 2010 survey of its membership and is an assessment of the additional economic activity generated by the cooperatives� initial stimulus to the state�s economy in 2009. The two generation and transmission cooperatives together with the 28 retail electric cooperatives employ 881 workers full-time and 78 part-time workers.
�The initial stimulus from the cooperatives and business linkages throughout the economy create an additional 858 jobs statewide. The employment multiplier for the electric cooperatives using 2009 data is 1.93. For every job created by the electric cooperatives in their businesses, there is approximately nine-tenths of an additional job (0.93) created elsewhere in the state�s economy.
This is the third such survey that has been conducted of the economic impact of the state�s 30 electric cooperatives.
�New wealth in the economy is created by the electric cooperatives through business linkages and by the payment of wages and salaries to employees in addition to the rebates and capital credits distributed to owner-members,� Stuefen wrote. �These payments to employees and members totaled $66 million in 2009.�
He also concluded that the wages and salaries paid to co-op employees allowed those households to generate an additional $28.4 million of new wealth as that money made its way through the state�s economy.
�In the 75 years since the first electric cooperative was established in the state, electric cooperatives have had a tremendous impact not only on the communities they serve, but also on the state�s overall economy,� said Ed Anderson, general manager of the South Dakota Rural Electric Association, which commissioned the study on behalf of its members.
�Our cooperatives have strong roots in the communities and areas they serve and this study helps quantify their impact,� said Anderson.
Among the study�s findings:
� Cooperatives reported generating 3,156 new jobs and retaining 3,006 existing jobs through sponsorship of revolving loan funds.
� During a three-year period, co-ops invested more than $2.4 million in business and economic development activities.
� Electric co-ops assisted 188 businesses by providing $48 million in economic and community development loans.
� The state�s 959 co-op employees volunteered more than 62,131 hours on volunteer projects in their communities � an average of more than 60 hours per individual. This service was valued at nearly $1.7 million.
� Since 1995, co-ops have partnered on 215 loans to 183 borrowers totaling more than $48 million through USDA�s Rural Economic Development Loan and Grant Funds.
� Co-ops are helping their members become more energy efficient. From 2007 to 2009, co-ops returned $8.8 million to cooperative member-consumers as monetary incentives for energy efficiency programs.
� Co-op members reaped the benefits of being owners of their cooperative when $29.7 million in capital credits was refunded to member-consumers from 2007-2009.
� In 2009, co-ops paid more than $14.5 million in taxes.
Stuefen also noted that businesses throughout the state benefited from the operations of the 30 cooperatives and their spending on goods and services. These businesses in their operations were able to make payments to labor, increase their proprietor�s income or distribute corporate profits as a result of their activity linkages with the cooperatives.
These payments along with the expenditures of the benefited households increased the state�s household income or wealth by an additional $23.6 million. In total, $123.6 million of new wealth was created or supported by the state�s electric cooperatives for an income multiplier of 1.87.
A copy of the study can be found at www.sdrea.coop.