Rural electric cooperative members in Alabama are unknowingly contributing to political candidates’ campaigns through their monthly utility bills, according to a new analysis from the Energy and Policy Institute.

The Alabama Action Committee for Rural Electrification, the political action committee of Alabama-based electric cooperatives, has contributed $124,500 to political candidates and elected officials since July 2017. Electric cooperatives serve approximately 415,000 customers in Alabama according to the Alabama Electric Cooperative Association’s Media Kit, posted on their website.

The PAC claimed a January 2018 ending balance of $405,859.71, almost $1 per customer in Alabama, even after it made more than $120,000 in political contributions since July of last year. Most customers assume that payments on their utility bills are used to generate and deliver energy to their home, not to curry favor with political candidates. Electric cooperative customers are contributing $5,377.33 per month for political campaigns, according to filings from the Alabama Secretary of State’s office.

Electric cooperatives, unlike investor owned utilities, do not have shareholders or wealthy institutions to purchase their stock. Instead, ownership in an electric cooperative is made up completely of its own customers. Any political contributions by electric cooperatives must be paid for by the revenues collected from its customers.

According to the National Rural Electric Cooperative Association (NRECA), electric cooperatives across the country subscribe to the “7 Cooperative Principles” including “Democratic Member Control” and “Members’ Economic Participation”. The “Members’ Economic Participation” principle implies member control over the use of the cooperative’s capital, and it states:

“Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.”

The PAC spends heavily on Republicans in the state, as might be expected in a supermajority Republican state, but it has contributed almost $25,000 to statewide Democrats since the beginning of 2017. The largest political contributions were to the campaigns of Kay Ivey and Steve Marshall for $10,000 each in December 2017, both incumbent Republicans running for re-election. The PAC had already contributed $5,000 to Kay Ivey’s campaign in August 2017.

Posted by Daniel Tait

Daniel Tait is a Research and Communication Manager for the Energy and Policy Institute.