Rural Utility Cooperative Law Blog

View the PDF version of this Cooperative Tax Brief here. When it comes to financial losses, many cooperatives are uncertain how to handle them.  Because cooperatives attempt to operate at cost, the uncertainty likely arises from the rare occurrence of

What happens when a utility cooperative’s largest customer goes belly up? Industrial and commercial customers can be the largest accounts for utility cooperatives, such as electric cooperatives, telephone cooperatives, water cooperatives, etc. When these customers fail to pay their bill,

CFC Solutions Newsletter (Monday, 21 March 2016) The latest short-term outlook from the U.S. Energy Information Administration (EIA) pegs natural gas to produce 33.4 percent of the country’s electricity generation this year, compared with 32 percent for coal. “This marks

In 1988, the Tennessee Legislature changed state law to give rural electric cooperatives a temporary, four-year city and county property tax exemption on their investments in new facilities and plants. The law sat on the books, unnoticed, for almost 20 years

Last May, the Middle Tennessee Electric Membership Cooperative (MTEMC) and the City of Murfreesboro signed a memo of understanding (MOU) for MTEMC to acquire the Murfreesboro Electric Department (MED). Since then, there have been meetings and workshops on this unusual

The following article was published in the National Rural Utilities Cooperative Finance Corporation (CFC) Solutions NewsBulletin, December 14, 2015, Vol. 17, No. 45, and is reprinted here by permission from the organization. Lincoln Electric Cooperative in Eureka, Montana, recently refinanced

It took over ten years, but the dispute over coal transportation costs between Berkshire Hathaway-owned BNSF Railway and the regional utilities associated with the Laramie River Station (LRS) in Wyoming, including Lincoln Electric System (LES), has finally been settled. Now

A Renewable Portfolio Standard (RPS) is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal. RPS-type mechanisms have been adopted in several countries, including Britain, Italy, Poland, Sweden, Belgium,

By Richard R Oswald Once upon a time, telegraphs and kerosene lamps were state of the art. Telephones and 110-volt wall outlets were the next big thing. Now we have the Internet. Costs of hard-wired improvements are just too high

In May of this year, Midwest Energy Cooperative, serving southern Michigan, adopted a resolution to become member-regulated, in accordance with Public Act 167 of 2008, the Electric Cooperative Member-Regulation Act. Assuming it has fulfilled all of the notice and hearing

Since 2009, at least 14 cases have been filed against electric cooperatives over patronage capital (or capital credits) in eight states: Alabama, Arkansas, Georgia, Missouri, New Mexico, North Carolina, South Carolina, and Texas. Now the membership of a water utility

Socorro, a New Mexico city of 72,000 about 75 miles south of Albuquerque, is seeking to pass several ordinances concerning the governing of its electric cooperative, including one that will establish an electric utility to compete with the co-op. The

Attorney David Cook will be presenting a “Tax Update for Cooperatives” at the NTCA 2015 Finance & Accounting Conference.  NTCA – The Rural Broadband Association is a group that represents telecommunications companies in rural and small towns. David will cover

Dave Osborn, CEO of Valley Telephone Cooperative, Inc., explains why lawmakers need to update the USF to account for the services of rural telcoms. Read the full article here.  Here is a short summary: What began as a small cooperative

Real Estate Investment Trusts and Cooperatives’ Patronage Dividends Some of the more interesting cooperative tax cases involve the interplay of cooperative tax law, such as Subchapter T or Section 501(c)(12), and other tax systems. One such other tax system –

To view this Cooperative Tax Brief in the traditional PDF format, click here. Introduction What counts as notice of patronage under Subchapter T? Traditionally, notices of allocation have been written – in the sense of paper and snail mail. But

To view this AHC Cooperative Tax Brief as a PDF, click here.  The IRS has rejected an organization’s application for exemption under Section 501(c)(12), even though the organization was organized under a state’s cooperative statute and provided services to telecommunications

Developers are constantly looking for ways to find capital for their energy development projects.  They have solicited all sorts of capital, including banks, angel investors, private equity investors, private development bonds, and other sources.  One other potential source of capital

USDA Magazine Article Discusses Management of Capital Credits and Patronage Dividends The USDA publishes a bi-monthly magazine, Rural Cooperatives, which covers various issues encountered by cooperatives of all types.  Recently the magazine published an article written by attorney David Cook

Cooperatives May Offset Bad Debt with Capital Credit Balances Like for-profit companies, cooperatives encounter bad debt of members and patrons.  They can initiate collection efforts to pursue bad debts, but because their members are also their owners, debt collection can

Electric Cooperative Partners with Lumber Company for Biomass Plant This blog post was provided by Flathead Electric Co-op. Implementation of a Power Purchase Agreement (PPA) between Flathead Electric Co-op and F.H. Stoltze Land & Lumber Company will begin October 1st.

This guest post was obtained from CFC's Solutions News Bulletin, Vol. 15, No. 40 (Oct. 28, 2013). Co-ops Receive $3.6 Million in Solar Funds Last week, the U.S. Department of Energy's SunShot Initiative awarded $60 million to support solar energy research

FEMA Disaster Relief Withheld from Electric Cooperatives Electric cooperatives in Iowa were surprised by FEMA's rejection of disaster aid, according to this article.  The utilities sought approximately $20 million in funds to replace electric facilities damaged by recent storms.  Their

Like public utilities, municipalities and other political subdivisions that provide electricity to customers must procure wholesale power.  A recent IRS ruling discusses municipalities' use of a generation cooperative to procure wholesale power and related services.  The ruling explains that the