Retail competition was the talk of the utility industry in the 1990s. Worried they could lose ground, rural electric co-ops sought new territory in new places, including big cities.
1st Rochdale Cooperative Group in New York City, the first urban electric co-op, was a project that NRECA supported. Management experts and lawyers with the association schooled the project’s organizers about the co-op business model and helped them get their operation off the ground in 1998.
The New York group took its name from the first modern cooperative, which opened its doors at 31 Toad Lane in Rochdale, England, in 1844. Its 28 members sold butter, flour, oatmeal and sugar, and established the principles that co-ops around the world still follow today.
Propelling 1st Rochdale forward was Allen Thurgood, a fast-talking Manhattan native with a shock of white hair who headed the Coordinating Council of Cooperatives, a group of 21 housing co-ops in Manhattan, Queens, the Bronx and Brooklyn.
One of them was Penn South Co-op, 10 plain brick towers in bustling mid-town Manhattan. There were 2,820 units, and many of the residents had moved in when Penn South was built in 1962.
Another was Co-op City in the northeast Bronx, with 15,372 units in 35 high-rises and seven clusters of townhouses.
1st Rochdale hoped to serve some 50,000 consumers at the outset and eventually ramp up to 600,000.
Thurgood and 1st Rochdale’s board of directors at first asked NRECA for technical advice and support. Then, as the relationship developed, the co-op asked if an NRECA member—a generation and transmission system or a consortium of them—could supply power to the apartment buildings. 1st Rochdale was reluctant to do business with an investor-owned utility like Consolidated Edison.
“The housing cooperatives are working to build something new, and its critical in this early development phase to partner with someone you can trust,” NRECA lawyer Greg Wortham said in 1998. “They don’t want to share crucial member and customer information with a company that will simultaneously be competing for those same customers.”
Ed Yaker, 1st Rochdale’s treasurer and chairman of the board of Amalgamated Housing, another Bronx housing co-op, was looking at things from the other side of the meter – the conservation side.
“Con Ed and Enron will sell you a kilowatt-hour, but they are not really competing to have you reduce your energy bills, which is [also] what we’re interested in.”
NRECA welcomed the opportunity to consider new markets and to let the public know that electric co-ops could be as viable in urban areas as in the rural and suburban areas they had served for 50 years.
“What makes this exciting is having a new electric co-op in an area where traditionally there have been none,” said then-CEO Glenn English.
Wally Rustad, then NRECA’s director of government affairs, pointed out that 1st Rochdale would augment his staff’s lobbying efforts.
“It’s going to be helpful on the legislative front, because we will have members of an electric cooperative that are located in the heart of the nation’s major metropolitan areas,” he said. “There will be members of the House of Representatives, in particular, who will have rather large numbers of urban constituents as members of an electric cooperative.”
They did, but not for long.
About a third of 1st Rochdale’s customers were commercial accounts (not housing co-ops), and they were always shopping for lower rates. As a result, 1st Rochdale struggled with revenue instability and constricted cash flow and filed for Chapter 7 bankruptcy protection in March 2005. Thurgood died two years later.