Electrical Cooperatives: The Economic Impact - Essay Example

Today, the electric cooperatives in the US maintain 43% of the lines and deliver 10% of the nation's electric needs (NRECA). While the impact on the national e. They provide employment for 67,000 workers in the United States that contribute a payroll of $3 billion to the businesses and commerce of the local area of the cooperatives (NRECA).In addition to providing a direct benefit for the people who are employed in the generation and distribution of electricity, there are also indirect economic impacts.

Electric cooperatives supply their businesses through local purchases of the required resources. This can be anything from computers to vehicles. This money circulates back through the local economies and generates a ripple effect through the communities. Construction of major projects, though temporary, contributes a considerable financial input to a local area during the life of the project and can have a significant effect on the local economy (Schunk 5). The economic activity from these business transactions creates local jobs for service and retail businesses.

In addition to providing employment and stimulating the local economies around the country, the cooperatives contribute $1.2 billion in local, state, and federal tax revenue (NRECA). These revenues provide relief for the tax system and generate increased economic activity through the funding of federal infrastructure programs. In addition to the direct input of tax revenue, the electric cooperatives receive a smaller federal subsidy than municipal and investor-owned power companies. According to Lawrence R.

Klein of the University of Pennsylvania, ".all types of utilities (Investor Owned Utilities (IOUs), Municipal Owned utilities and electric cooperatives enjoy some form of subsidy" (qt. in NRECA).