Legal & Regulatory

Digital Solutions Provide Great Benefits for Cooperative Utilities

Although cooperatives may not have the financial resources of large investor-owned utilities, valuable digital solutions are still within their grasp. Because they have fewer resources to employ, co-ops may even benefit more from advanced technology than their deep-pocketed brethren.

Accounting for almost half of America’s distribution lines and working in some of the country’s most rural areas, cooperative (co-op) utilities offer a profoundly unique experience for their members, but they’re facing a major change in the way they operate. Co-ops have historically lacked the access to debt and capital that would allow them to benefit from newer technologies. However, following a government boost of almost $11 million last year, co-ops may be more equipped than ever to take the next steps and utilize digital solutions to make energy more affordable for their members.

Community at the Fore

Working to serve their members rather than drive profits for shareholders, co-ops have their foundations in seven operating principles. Ranging from democratic membership control to education and training, these are all grounded in supporting and protecting the local communities they power.

In fact, this commitment to community has seen co-ops stay one step ahead of trends across the utility industry. For example, in Illinois recent changes to law dictate that utilities cannot shut off the power to customers who haven’t paid their bills when the temperature exceeds 90F. This is something that the Egyptian Electric Cooperative Association, headquartered in Murphysboro, Illinois, has been offering voluntarily to its members for many years.

 

1. More than 800 distribution cooperatives make up the U.S.’s electric co-op network, which serves more than half of the nation’s landmass. Source: Envato Elements

Make no mistake, utility co-ops strive to bring the best service at the lowest possible cost to their members. But the high cost of maintaining the infrastructure needed to cover large areas (Figure 1), often lacking large cities and dense populations, can make balancing the books difficult. Considering their typically rural operating areas, co-ops have the unenviable job of delivering power to homes that may be several miles from their next neighbor, leaving them with large quantities of transmission and distribution (T&D) assets over vast areas—which then need to be inspected and kept up to standards.

Collectively responsible for more than 2 million miles of distribution lines, accurate and regular inspection is no mean feat. Budgets are often tight for co-ops, who aim to keep prices low. The fact that co-op revenue comes from servicing only about 12% of the population, but expenses stem from maintaining three times the number of miles of powerlines serviced by privately owned utilities, means efficiency is paramount.

Technology to the Rescue

Meanwhile, co-ops serve about 92% of U.S. counties designated as being in persistent poverty, so utility jobs are considered extremely important to local communities. In some cases, the fear of job losses has slowed the uptake of digital solutions. The reality, however, is that technology doesn’t eliminate jobs, it enhances productivity.

Artificial intelligence (AI)-driven solutions for T&D operators work as partner tools for existing employees, providing them with dynamic real-time data that allows them to make smarter decisions. An example is utilizing purpose-equipped helicopters or drones to perform accurate data collection to build rich 3D models of T&D assets including surrounding vegetation and buildings. At a glance, employees can immediately see problem areas and allocate resources, meaning workers no longer need to make educated guesses at where their presence is needed and can immediately get right to the heart of any problems. This leads to greater employee efficiency and satisfaction—as well as more effective allocation of resources and money.

Furthermore, in parts of the country where qualified electrical workers are an aging population, a tech-first approach could also help co-ops entice new, younger workers, who may help carry forward existing expertise for the next generation.

Future-Proofing

Looking forward, the potential benefits of digitalization for cooperatives are clear. By adopting solutions like digital twins, co-ops can take a proactive approach to asset management, using precision AI to stay one step ahead of the challenges they face.

With a more thoughtful approach to operations and maintenance, co-ops can ensure that asset health is carefully monitored, as well as managing nearby vegetation to keep the lights on year-round. Not only this, but with communities that demand the lowest possible prices for their electricity, co-ops can maximize their budgets by inspecting hundreds of miles in one day with a drone or helicopter, rather than tens of miles with a worker and a ladder.

Co-ops have a unique working model, and a unique set of challenges that come with covering a vast expanse of rural land, so they need a specialist digitalization partner that speaks their language. Once equipped with a tailor-made solution, these cornerstones of our electricity industry have the potential to be trailblazers in the power sector—all to the benefit of the deserving communities they serve.

Lisa Stannis is customer development director at Sharper Shape.

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