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After World War II, suburbanites began replacing farmers in Dakota County, Minnesota, a 587-square-mile area immediately south of the twin cities of Minneapolis and St. Paul.
By the 1970s, only about 1,500 of 30,000
Dakota Electric Association meters served farm buildings. The rest recorded usage at tract homes, shopping malls, schools, and commercial buildings.
Many of the newer Dakota Electric members had never thought about the difference between an investor-owned utility and a co-op. Their consumer loyalty stretched only to their last monthly bill payment.
This left the co-op vulnerable to attack for any misstep. Dakota Electric had made a few in recent years, and they erupted into a fury of member unrest in the summer of 1979.
High rates, a high power-cost adjustment, and scorching temperatures in July after a cool June combined to cause members’ bills to increase dramatically between those two months. Many saw their bills double.
Protest meetings were held, and the publisher/editor of a chain of community newspapers serving the county emerged as the leader of a member revolt. There were “articles and editorials almost very week regarding the operations of the cooperative and how our rates compared with some of the neighboring utilities,” General Manager Richard Okerberg explained in a speech he gave at the NRECA Member Services Conference in 1981. “The rate comparisons unfortunately showed that our rates were from 20 to 40 percent higher.”
The upshot of the revolt was a petition drive to have the co-op regulated by the Minnesota Public Utilities Commission. The first attempt failed, but a second was successful. As required by state law, a mail ballot of co-op members was conducted. About 56 percent responded, Okerberg said, and the vote was 60 percent in favor of regulation and 40 percent against. This was a blow to Dakota Electric, which had just gotten out from under PUC review about a year and a half earlier.
Okerberg spent the rest of the speech outlining the steps management and the board of directors took to win back the members’ loyalty.
An NRECA management consultant helped Okerberg and his staff see that the co-op had put little effort into keeping members informed. So the co-op started publishing a monthly newsletter and producing at least two pages a month for the statewide consumer publication. It also beefed up its advertising in local newspapers.
It formed a member advisory committee made up of two couples from each of its nine director districts (36 people). It established a loan program for residential energy efficiency improvements (called “energy resource conservation” in those days), and found a Twin Cities credit union that would welcome Dakota Electric members.
On the employee side, the co-op started publishing an internal newsletter, instituted an employee recognition program, and in 1981 held a banquet for employees and their spouses. Meetings with employees to discuss rate changes and other co-op issues became the norm.
Patty Smith, the NRECA consultant, had “pointed out that we had neglected our employees, who can often be one of our biggest assets in improving our relationships with our members,” Okerberg told his Member Services Conference audience.
He ended his speech with three suggestions for other electric co-ops:
1) Always keep in mind that the members own the co-op, and they want to be kept informed and have a voice in important decisions like rate increases. Think twice before making budget cuts affecting your member services department, “for in our experience, you will spend considerably more money later on trying to make up for what you’ve lost.”
2) Don’t neglect the local news media. Cultivate positive relationships with publishers, editors, and reporters. “Work with them, give them stories, and get a reputation for always giving out the truth.”
3) “Put out as much advance publicity as possible on any rate changes.” It will cost less than what you’ll pay for damage control later. There will still be members who don’t pay attention to the co-op’s messages and react with anger. But “you can reduce this number considerably by advance efforts.”
A year and a half after Smith’s visit to Dakota Electric’s Farmington, Minnesota, headquarters, Okerberg could report: “Complaints from members have dropped even though rates are now higher than they were when the whole affair started.