ARLINGTON, Va. – A new report on the nationwide economic impact of electric cooperatives shows that co-ops supported nearly 612,000 American jobs and contributed $440 billion in U.S. GDP from 2013 to 2017, or $88 billion annually.
“This report quantifies what many rural American families and businesses know well—electric cooperatives are powerful engines of economic development in their local communities,” said NRECA CEO Jim Matheson. “Affordable and reliable electricity is a key ingredient for a successful economy. Because electric cooperatives were built by, belong to, and are rooted in the communities that they serve, they play a vibrant role as economic cornerstones for millions of American families, businesses and workers.”
Scott Nystrom, a Director in the Economic Impact Analysis practice at FTI Consulting and an author of the report, added, “Access to electricity was a vital component of economic development and diversification in the mid-20th century, and that remains true today. Roughly 1 in 8 residents nationwide are served by an electric co-op, meaning direct co-op employment and investments can ripple throughout the economy and create additional economic value for local communities, regions and the country.”
From 2013-17, electric co-ops contributed $881 billion in U.S. sales output, $200 billion in labor income and $112 billion in federal, state and local tax revenues.
Nationally, electric co-ops spent $359 billion on goods and services across the economy, including $274 billion on operational expenditures, $60 billion on capital investments, $20 billion on maintenance, and $5 billion on credits retired and paid in cash to consumer-members under the membership structure of cooperatives.
The report was commissioned by NRECA and the National Rural Utilities Cooperative Finance Corporation (CFC). FTI Consulting used data from 815 distribution and 57 generation and transmission cooperatives as inputs into a national model to simulate the economic effects from the direct expenditures by co-ops. The model also calculates the indirect effects throughout the industrial supply chain and the induced effects from consumer spending by the employees of co-ops and their suppliers.
The National Rural Electric Cooperative Association is the national trade association representing more than 900 local electric cooperatives. From growing suburbs to remote farming communities, electric co-ops serve as engines of economic development for 42 million Americans across 56 percent of the nation’s landscape. As local businesses built by the consumers they serve, electric cooperatives have meaningful ties to rural America and invest $12 billion annually in their communities.
Created and owned by America’s electric cooperative network, the National Rural Utilities Cooperative Finance Corporation (CFC)—a nonprofit finance cooperative with approximately $27 billion in assets—provides unparalleled industry expertise, flexibility and responsiveness to serve the needs of our rural utility system members.
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 4,700 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.03 billion in revenues during fiscal year 2018. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.