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Powering up progress.

How Indiana's rural electric cooperatives aid economic development

Improving life in rural America was the goal years ago when rural-electric cooperatives began stringing electric lines from farmhouse to farmhouse along narrow county roads. That's still the aim today as Indiana's RECs work to promote economic development outside of the state's metropolitan areas.

"What we do is very consistent with our business," says Dick Heupel, director of economic development at Hoosier Energy, a Bloomington-based company that generates electricity for distribution by its member REGs. "Our founders brought the electric infrastructure to rural areas where none existed. Their purpose was to improve the quality of life and the economy in rural areas. Today, our economic health as an organization is determined exclusively by the health of the regions we serve."

Indiana's rural electric cooperatives take on the business of economic development with a somewhat different perspective than' investor-owned utilities might have. As cooperatives, they are in effect owned by their own customers, by the people who live in the communities they serve. "These are the communities in which we live and work," says Michael Core, executive vice president of the Indiana Statewide Association of Rural Electric Cooperatives. "We have a vested interest in opportunities and growth in the communities."

But RECs in particular need more commercial accounts to balance out their mostly residential customer base. "These kinds of customers tend to use their electricity at different times from the residential load, and we tend to be more residential," Heupel says. In fact, while homes make up just a third of the customer base at a typical metropolitan electric utility, REC customers may be as much as two-thirds residential. That forces RECs to service a disproportionately high energy demand during the hours that people tend to be at home.

"So anything we do to shift that load away from those times is a good thing. It makes for more efficient use of our plant," Heupel says. And these kinds of efficiencies reduce costs, which benefits RECs' owner-customers. "We've passed along a reduction of about 25 percent since 1987."

How do RECs go about encouraging economic development in rural areas? In many of the same ways that metropolitan utilities help out. "We're owned by 18 rural electric cooperatives, and 90 percent of what we do is through them," Heupel points out. These kinds of efforts are particularly crucial in smaller communities whose governments may not have the economic-development resources that bigger cities enjoy.

"We're doing prospect-generating kinds of activities as well as product-development activities relating to infrastructure improvements and organizational support of local economic-development organizations," says Steve Hilton, manager of economic development for Wabash Valley Power Association, which provides electricity to 24 member RECs. Wabash Valley and Hoosier Energy both, through their member cooperatives, help pay for development-related technical, engineering and environmental studies.

They also help smaller communities with staffing and training needs related to economic development. They pay for local development officials to attend training at places that include Ball State University's economic-development academy. "We also provide financial support for their participation in local and regional economic-development activity, and for their membership on the boards of economic-development groups," Heupel says.

Hoosier Energy, Wabash Valley and their member cooperatives are heavily involved in. the kinds of marketing activities that generate and cultivate development leads. "We develop marketing materials for sites and buildings," Hilton says. "We do regional and local profiles with statistical snapshots. We do some advertising in economic-development publications, and we do trade shows."

Heupel says Hoosier Energy helps identify good available sites in rural areas. And when a rural community gets a nibble from a development prospect, the electric company can help pass along the kinds of information needed to make a site-selection decision. "We provide them information about tax rates, electric rates, labor-force information, wage rates, union activity," Heupel says. "And we work with the state to identify grant opportunities and other incentives."

Whatever Indiana's RECs are doing in the area of economic development, it seems to be working, Core says. "Rural Indiana in the last several years has been rediscovered as an excellent place to do business."
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Title Annotation:impact of Indiana's rural electric cooperatives on economic development
Author:Kaelble, Steve
Publication:Indiana Business Magazine
Date:Jun 1, 1996
Previous Article:Small-town charm.
Next Article:Who's developing Indiana?

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