Tracking Legal Events involving Electric & Telephone Cooperatives

Scholarly Articles



Here we attempt to highlight scholarly and well researched papers and writings dealing with Rural Electric Cooperatives and Rural Telephone Cooperatives.

Some of these links take you outside of the Coop Litigation News website so we aren't responsible for the content.

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Electric Co-Operatives:
From New Deal to Bad Deal?

Harvard Journal on Legislation

United States Congressman Jim Cooper

45 Harv. J. Leg. 335

Most people who live or work in rural America must buy their electricity from their local co-operative, a unique and largely unregulated type of utility.  Electric co-ops are owned by their customers who are called “members.”  This Policy Essay by Congressman Jim Cooper focuses  on the primary obligation electric co-ops owe their members: “at-cost” service, i.e., the lowest feasible electric bills.  To meet this obligation co-ops must provide low electric rates and timely return of equity.  They must also reduce the quantity of unneeded electricity purchased.  This Essay demonstrates that most distribution co-ops have a financial incentive to sell more electricity, not less.  It also shows that co-ops have sought to conceal information from their members—information to which owners are entitled in other business contexts.

America’s 930 electric co-operatives are the sole source of electricity for homes, farms, and businesses for parts of 47 states.  Although 66 co-ops also generate and transmit wholesale electricity (“G&Ts”), the 864 distribution co-ops (“co-ops”) simply resell and deliver electricity to retail customers across the crucial “last mile”  between the national electric power grid and the co-op members that ultimately use that electricity.  Nationwide electrification is considered by engineers to be the greatest accomplishment of the twentieth century.  It is hard to imagine life without it.

Cooperative Director Liability Exposure:
Issues and Resolutions

Washington State University

Ken D. Duft and Robert L. Zagelow

Serving as a member of a cooperative Board of Directors often comprises an experience mixed with rewards and anxieties. Such service, after all, fulfills the basic democratic premise that cooperatives are owned and controlled by the very patrons they are destined to serve. . . .

BASIS FOR EXTREME CAUTION

As a general rule, newly elected cooperative directors are aware that the position to which they have been elected carries serious responsibilities and that under certain circumstances their actions, individually or as a board, may provide some personal liability exposure.

If they are not aware, then they must be made aware that they are subject to suit by persons who feel the actions of the cooperative have caused them undue harm.  The likelihood of such action may be minuscule, but becomes significantly more likely whenever directors permit or knowingly cause the cooperative to operate contrary to law, or to operate in a manner that contravenes a law.  From a practical standpoint, the potential for litigation grows dramatically when cooperatives suffer serious financial losses or insolvency, in that members seek to know “what went wrong.”