New report shows economic impact of electric co-ops in Minnesota, nationally
A new analysis finds that electric cooperatives have a wide-ranging economic impact in the United States, supporting nearly 623,000 jobs with $51 billion in pay and benefits each year while contributing hundreds of billions of dollars to the economy over a five-year period.
According to this analysis, co-ops’ activity contributed $554 billion to U.S. gross domestic product between 2018 and 2022 for an average of $111 billion per year. Co-ops also generated $135 billion in federal, state and local tax revenue over this period.
The report, “Economic Powerhouses: The Economic Impacts of America’s Electric Cooperatives,” was commissioned by the National Rural Electric Cooperative Association (NRECA) and the National Rural Utilities Cooperative Finance Corp., (CFC) and conducted by Strategen Consulting, an energy strategy consulting firm and NRECA associate member.
It details the economic impacts of distribution and generation and transmission cooperatives’ annual capital, operations and maintenance expenditures as they engage in the distribution, transmission and generation of electricity, as well as the disbursement of excess operating revenue returned to consumer-members as capital credits.
“This report quantifies what many American families and businesses know well: Electric cooperatives are powerful engines of economic development in their local communities,” NRECA CEO Jim Matheson said. “Affordable and reliable electricity is a key ingredient for a successful economy. Electric co-ops are focused on the long-term success of local communities as they keep the lights on and power economic growth.”
While co-ops had a major impact nationwide, the report also found that much of this activity happens locally. Within the counties they serve, co-ops supported jobs for nearly 424,000 people earning $33 billion in pay and benefits annually and contributing $374 billion toward gross regional product across the five-year period for an average of $75 billion per year.
As for Minnesota, electric cooperatives injected $19.6 billion into the state’s economy from 2018 to 2022, fortifying its financial landscape and supporting an average of 20,800 jobs each year.
“This study’s findings underscore the indispensable role electric cooperatives play in our state’s economic vitality,” said Darrick Moe, CEO of the Minnesota Rural Electric Association. “We are proud to power our communities, provide meaningful careers and give back to our neighborhoods. As consumer-owned not-for-profits, our focus is on helping bring a brighter, more prosperous future to the places we call home.”
Between 2018 and 2022, co-ops invested nearly $409 billion across the United States. This figure includes $75 billion on capital expenses and infrastructure, $304 billion in operational costs and $24 billion toward maintenance activities. Another $7 billion was disbursed to members in the form of retired capital credits.