The North Dakota Association
of Rural Electric Cooperatives
The North Dakota
Association of Rural Electric Cooperatives (NDAREC), established in 1958,
works with the state’s 19 distribution co-ops and 6 generation and transmission
co-ops to provide quality service to the state’s population (NDAREC web
site). Its headquarters are located in Mandan, North Dakota.
The NDAREC has formally been involved with cooperative development since
1990, and is regarded as a key supporter of new generation cooperative
formation.
In the late 1980s,
the NDAREC began to focus on the need for rural economic development.
Its own well-being was at stake if no action was taken. A declining
rural population would mean less demand for electricity, and the electric
cooperatives would be left with excess, unused capacity. This trend
was already evident. In the 1970s, the rural electric cooperatives
expanded their capacity to serve the booming farm economy, which was thriving
because of high grain prices. As well, energy projects in the state
were booming due to high oil prices. Per capita income from 1970
to 1978 in North Dakota rose 142 percent. However, the boom faded
by the early 1980s and the rural electric cooperatives found themselves
with 1,000 megawatts of surplus power. Something needed to be done
and the electric cooperatives, seeing that no one else was really stepping
up to the plate, decide to initiate their own economic development efforts
(Campbell).
In 1990, the
NDAREC began its Rural Economic Development Program, at which time it hired
Bill Patrie as the director of the Program (NDAREC Rural Development Program
Report). Mr. Patrie remains as the director for the NDAREC’s rural
development activities. Prior to joining the NDAREC, he had been
an economic development officer for the state. Mr. Patrie has been
involved with the formation of many new generation cooperatives.
He also played a role in the development of the “Growing North Dakota”
legislative package in 1991 and in the formation of the Commission on the
Future of Agriculture’s report in 1998. Patrie, who was recognized
as one of the ten most notable North Dakotans by the Bismarck Tribune in
1998, completed a manual for the United States Department of Agriculture
(USDA) entitled Creating ‘Co-op Fever’: A Rural Developer’s Guide to Forming
Cooperatives. This publication is based on his experience with agricultural
value-added cooperatives.
Part of the NDAREC’s
Rural Development Program is the Dakotas Cooperative Business Development
Center, an organization that has provided strong support to new generation
cooperative development. Mr. Patrie is the director of the Center.
Dakotas Cooperative Business Development
Center
Established in
1994 and operating under the umbrella of the North Dakota Association of
Rural Electric Cooperatives (NDAREC), the goal of the Dakotas Cooperative
Business Development Center is to improve the quality of life in North
Dakota by developing good paying jobs in rural areas. The Center
provides technical assistance to develop value-added, cooperatively owned
agricultural processing businesses. The Center’s technical assistance
comes in the form of organizational development, strategic planning, start-up
administrative services, fund raising for development activities, consultant
referrals, due diligence on consultants’ reports, and assistance with obtaining
financing. It also provides office space for projects that are in
the development stage. The Center’s staff is comprised of a director,
three cooperative development specialists, and an assistant. As well,
some of the individual rural electric cooperatives have a cooperative developer
on staff. This enables the Center to extend its reach throughout
the state. Since 1994 the Center has been funded by a federal Rural
Cooperative Development Grant provided by the USDA's Rural Business Cooperative
Services division, with matching funds primarily provided by the NDAREC.
The Center also receives funding from the North Dakota Association of Telephone
Cooperatives (NDAREC Pre-application for the Rural Development Cooperative
Grant)..
The Center performs
other services that promote rural development. For instance, it implemented
the Agricultural Research Fund for the State Board of Agricultural Research,
which funds research that seeks to improve the quality of agricultural
commodities, increase efficiency in production, and make a positive impact
on North Dakota farmers. The Center holds a position with the North
Dakota Coordinating Council for Cooperatives, whose goals is to promote
cooperatives and cooperative development throughout the state. The
Center also has linkages with the Renewable Resources Research Institute,
which is an organization that helps commercialize innovations in agricultural
product use. It engages in outreach activities such as sponsoring
conferences and participating in a national network of cooperative development
centers. The Center’s staff are frequently asked to give presentations
to other cooperative developers throughout the nation. The Center
also holds an annual Rural Development Tour that allows participants to
see first-hand the economic development occurring in the state. The
last tour, held in July 1998, attracted 60 participants (NDAREC Pre-application
for the Rural Development Cooperative Grant).
The Center also
works with rural electric and telephone cooperatives to establish revolving
loan funds provided through the USDA's Rural Utilities Service. Rural
electric and telephone cooperatives, with the Center’s assistance, apply
for funds through Rural Utilities Service to establish these revolving
loan funds. These funds are then loaned by the utility cooperatives
to new or expanding rural businesses at an interest rate that is equal
to prime or less. In some cases, zero interest loans are awarded
(NDAREC Pre-application for the Rural Development Cooperative Grant).
In the 1998 USDA manual, Creating 'Co-op Fever': A Rural Developers Guide
to Forming Cooperatives, Bill Patrie indicated that zero interest loans
were used aggressively by North Dakota cooperatives. Perhaps more
importantly, the availability of these loans encouraged discussion among
farmers about cooperative opportunities (Patrie).
Individual Rural Electric and Telephone
Cooperatives
Individual rural
electric cooperatives, along with rural telephone cooperatives, have taken
an active role in projects undertaken within their area of service.
They provide low-interest loans to help new projects and low-cost power
in the early years of operation. In 1995, the Fargo Forum reported
that these cooperatives had loaned over $4 million to 33 projects across
the state (Springer). Three electric cooperatives that have been
noted for taking an active involvement in projects are Basin Electric,
Tri-County Electric, and Cass County Electric (Krause). Cass County
Electric’s economic development specialist noted that the cooperative has
helped several projects by hosting meetings to help get projects started,
providing seed money, and assisting in stock sales. It even provided
a corporate airplane so that organizers of United Spring Wheat Processors
could attend stock sale meetings in South Dakota and Minnesota (Koepplin).
References
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