A Minnesota Cooperative Shares the Wealth While Advancing a Clean Energy Future

Philanthropy is becoming increasingly undemocratic and reinforcing inequalities. According to a 2020 Institute for Policy Studies report, Gilded Giving, charitable organizations are increasingly having to rely on larger donations from a smaller number of wealthy donors because of shrinking revenue from donors at lower-and middle-income levels. This poses a growing risk to the independence of the nonprofit sector.

In this interview series, we will explore how different grassroots organizations are working, or seeking to work, outside of reliance on wealthy donors.

The first in this series is with Timothy Den Herder-Thomas from Cooperative Energy Futures in Minneapolis.

This interview has been edited for length and clarity.

What is Cooperative Energy Futures?

Cooperative Energy Futures is a community-owned clean energy cooperative based in Minnesota. We’re a member-owned business that focuses on developing renewable energy, energy efficiency, and other clean energy solutions. We have a particular focus on ensuring that our benefits are available to and can be owned by low income and people of color communities. We have 900 members, 800 of whom subscribe to our community solar gardens.

We’re a for-profit enterprise, but instead of having owners or shareholders who collect the profits, our subscribers share in the profits and make decisions democratically.

Community members, faith leaders, local elected officials, and members of the installation team gather to celebrate the launch of the Shiloh Temple Community Solar Garden, 2018.

What is the vision for the future you’re building toward?

In the short term, our vision is for people and communities to have choice over where their energy comes from and how it works.

That looks like cities and towns having the rights to source energy for their residents. It looks like voluntary cooperatives of individuals or small businesses coming together to contract for their energy supply. It looks like neighborhoods being able to share energy with one another through micro-grids and smart grids. It’s about breaking up large energy utilities’ monopolies and putting both the decision-making power and the profit flows of those billions of dollars back into local communities.

The ultimate vision is a world that looks utterly different from the one we live in today.

We look to build a world where people have the ability to decide how they want to spend their lives. A world where people band together through worker co-ops or other sorts of associations to produce the things we all need. A world where people have ownership and share the wealth of housing, energy, food production, transportation, construction, the built environment, and manufacturing. This is particularly crucial for building autonomy and wealth for communities that for so long have had their wealth and power extracted from them.

How is Cooperative Energy Futures building community wealth?

Right off the bat, the amount our subscribers pay each month is less than the credit they receive on their utility bill. Our subscribers save about 7-10 percent on their annual electric bill.

But this is just the beginning because as the co-op generates profit, whatever is not reinvested in the co-op is distributed directly as dividends to members based on their share of the energy produced.

We can distribute those profits through a combination of cash or equity. For equity, we retain cash in the cooperative and invest it in new activities that preserve and grow the wealth each of our members own, for example by financing home insulation and other home upgrades to our members. This insulation would save subscribers’ energy and therefore cut further costs on their utility bills while repaying the co-op’s investments and growing member equity. The co-op creates a democratic process of deciding how much net profit we want to reinvest together versus distribute individually based on what our members need.

We also contract with climate justice and social justice community organizations. They help us find subscribers, and we pay them for that service. We’ve paid out almost $600,000 to community-based organizations to engage subscribers for our first rounds of projects.

There’s also a job creation end to this. We require all of our installation contractors to use at least 50 percent minority labor. We support partner organizations who provide solar workforce training by helping place trainees, such as a program through the Minnesota Department of Corrections to hire formerly incarcerated people.

What role does community-controlled energy play in a just transition?

It’s absolutely central. Community-controlled energy can serve as a template for how we think about just transition. How societies structure their economies, communities, and political power is highly influenced by energy systems. Every major new innovation in how energy is harnessed and utilized has triggered major changes in our economic and political structures.

A key example of this is the industrial revolution. There was a shift from most people being individual farmers or small entrepreneurs to the vast majority of people becoming wage laborers.

The shift towards community-controlled energy is a relocation of our physical energy, which then changes the economies of scale for how we produce food, how we make things, how we organize buildings and communities. It is also a relocalization of wealth and decision-making power.

The Ramp A community solar garden in downtown Minneapolis.

Do you have advice to individuals or groups seeking to enter the cooperative space?

First, a cooperative is a business. Yes, it’s a business whose objective is shared member benefit, not personal profit, but it’s still a business — meaning it still needs to have a model for what it’s going to offer people and how it’s going to economically self-sustain itself. If you don’t have that core engine, you don’t have the resources to do the rest of the mission.

Secondly, I think one of the biggest challenges in creating non-hierarchical decision-making structures is that there’s often a tendency to involve everyone in deciding everything. That’s consistently dysfunctional. A core principle of decision-making and power-sharing in cooperatives is that it’s not everyone deciding everything, it’s everyone agreeing on who decides what. Being really clear on those channels of decision-making and avoiding the too many cooks in the kitchen problem, which just exhausts people, is really key to prevent people burning out.

How can readers support your work?

We are part of an emerging network of energy democracy and climate justice groups who are launching similar community solutions all across the country. If you’re in Minnesota, get involved with us. We’d love to work with you. If you’re in a different area, find a similar group and plug into that. If you can’t find a group, talk to your neighbors and try to start your own cooperative.