Economic Impact of America’s Electric Cooperatives | FTI Consulting

The Economic Impact of America’s Electric Cooperatives

Economic Consulting | Energy, Power & Products (EPP)

March 25, 2019

Power

To measure the impact of electric cooperatives (“electric co-ops” or simply “co-ops”) from 2013 to 2017, the National Rural Electric Cooperative Association (“NRECA”) and National Cooperative Services Corporation (“NCSC”), an affiliate of the National Rural Utilities Cooperative Finance Corporation (“CFC”), engaged FTI Consulting, Inc. (“FTI”) to perform an economic impact analysis of the sector. For decades, America’s electric co-ops have played a vital role in the U.S. economy. Electric co-ops were built by and belong to the consumers they serve, and they are locally-engaged in their communities, driving economic activity, and fostering development.

These benefits extend beyond their direct employment, spending, and investments, and they ripple throughout the economy, creating economic value for communities, regions, and the country. We found that, over the five-year period, America’s electric cooperatives contributed $881 billion in U.S. sales output, $440 billion in gross domestic product (“GDP”), $200 billion in labor income, $112 billion in federal, state, and local tax revenues, and supported an average of nearly 612,000 U.S. jobs on an annual basis.

To perform this analysis, FTI worked with NRECA and CFC to develop data on the financial scope of electric co-ops, including information on revenues, expenditures for operations, capital investments, maintenance of infrastructure and other types of equipment, and capital credits retired and paid in cash to co-ops’ consumer-members. FTI then used this data as inputs into a national economic model to simulate the economic effects from the direct expenditures by co-ops. The model calculated the “indirect” effects throughout the industrial supply chain and the “induced” effects from consumer expenditures by the employees of co-ops and their supplier firms.

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