Keith Taylor of UC Davis, an institutional economist, offers a new perspective on electric cooperatives, arguing that if they join forces and federate, they could become a powerful force in scaling distributed energy.
Taylor, who specializes in cooperatives and describes himself as a free-market anti-capitalist, argues that America’s 800-plus co-ops are a form of “latent community capacity” hiding in plain sight. Keith explains why co-ops are often more efficient than investor-owned utilities, how they could compete in the microgrid era, and what a Lake Tahoe utility crisis reveals about who really gets served when data centers come knocking. It’s a hopeful, practical conversation about doing “policy from below.”
Key takeaways
Look beyond the market and the state. Drawing on Nobel laureate Elinor Ostrom’s insight that “there are no panaceas,” Keith argues we systematically overlook the civic economy — a third leg of the stool alongside the market and government — where cooperatives operate on logics of service at cost rather than profit.
We already have energy democracy. The U.S. has more than 800 electric cooperatives serving roughly 42 million Americans, generating about $42 billion a year in revenue. Of those members, some 8,000 serve as elected board directors — a political economy of its own that’s ready to be leveraged, not built from scratch.
Co-ops are often more efficient, not less. Investor-owned utilities serve about 30 households per mile of line; the average co-op serves about 7 — yet co-ops deliver comparable rates. In the 1930s, IOUs claimed lines would cost $2,000/mile; co-ops innovated the cost down to under $650/mile. Keith sees the same pattern today in broadband, where a South Carolina co-op (Carolina Connect) is stringing fiber for ~$15,000/mile against incumbent telco estimates of $200,000–$300,000/mile.
Small doesn’t mean weak — they federate. Individual co-ops stay locally controlled but pool into federations for financing (CoBank, the National Rural Utilities Cooperative Finance Corporation, and USDA’s Rural Utilities Service together hold over $300 billion in assets), insurance (Federated Insurance), and white-label marketing (Touchstone). Keith’s vision: a “microgrid federation” that makes co-ops a trusted vendor for communities building distributed energy.
The Tahoe warning. A pocket of ~50,000 Californians around Lake Tahoe is served by the Nevada grid — and as Nevada’s data-center demand grows, that region may be dropped in about 18 months, facing spot-market rates and rolling blackouts. It’s a concrete example of customers losing out to data centers, and of why platforming alternative institutional models matters.
Policy parity works. Co-ops have lagged on renewables largely because of incentive structures — they were historically excluded from renewable subsidies and often exempt from state renewable portfolio standards. When the Inflation Reduction Act’s “direct pay” provision finally gave them parity with IOUs, co-ops rapidly expanded their renewable and distributed-energy portfolios.
Start local, start now. Keith’s call to action is bottom-up: engage your co-op’s board and member-relations staff, join a member advisory committee, or run for the board. Where there’s no co-op, look to public utility districts, community choice aggregators, or form a new association.
About the guest
Keith Taylor teaches at UC Davis and approaches energy from an unusual angle — not energy policy, but institutional economics, rural sociology, and rural economic development. He earned his PhD at the University of Illinois in a multidisciplinary program called Human and Community Development, then completed a postdoc at the Ostrom Workshop at Indiana University, named for Nobel laureate Elinor Ostrom. A self-described “systems thinker,” Keith centers the individual in his analysis and describes his own philosophy as “free market anti-capitalism” — pro-choice and pro-participation, but against the excesses of hyper-speculative capitalism. His research is rooted in “appreciative inquiry”: hunting for the models that already work.
In this episode
[00:00] Cold open: do we already have the model to fix our electricity problems?
[00:31] The decentralized grid opportunity — welcome to Energy Changemakers
[01:14] Meet Keith Taylor and his systems-thinking lens on energy
[03:01] Beyond market and state: Ostrom, “no panaceas,” and the civic economy
[05:23] Civil society explained — the three-legged stool and “free market anti-capitalism”
[08:36] Co-ops as local power: latent community capacity
[11:47] Why co-ops feel different — the grocery-store CEO and Elisa’s Rappahannock story
[12:52] Competition and co-op value — efficiency, agriculture, and the Costco analogy
[15:33] A word on the Energy Changemakers newsletter
[16:34] Can co-ops scale and compete? Cream-skimming, cost-per-mile, and federations
[23:27] The Lake Tahoe / Liberty Utilities crisis and the data-center squeeze
[27:19] Microgrids and the role of standards
[29:59] The microgrid federation toolkit — co-op banks, insurance, and CCAs
[33:53] Renewables critiques and how the IRA changed the game
[36:38] How to get involved locally
[39:20] Bottom-up policy: doing “policy from below”
Memorable quotes
“I think of this as latent community capacity… now that you know they exist, they’re waiting for you to engage with it, to use it, to leverage it.” — Keith Taylor
On why co-ops feel different — a North Dakota co-op CEO’s line: “Hell, that doesn’t happen with us. All they gotta do is bump into me at the grocery store and tell me what’s on their mind.”
“I want the co-op to compete against a capitalist firm. I want that capitalist firm to compete against the co-op… competition makes both of those better.” — Keith Taylor
“We can, so we must.” — Elinor Ostrom (one of Keith’s favorite lines)
People & concepts mentioned
Elinor Ostrom — Nobel laureate (2009) for her work on collective action; the Ostrom Workshop at Indiana University
Lorenzo Kristov — grid thinker and advocate for local power generation
Bruce Carlson — North Dakota electric cooperative CEO
Liberty Utilities — the investor-owned utility at the center of the Lake Tahoe situation
Costco — cited as a hyper-capitalist firm that runs on cooperative-style member logics
Carolina Connect — South Carolina broadband cooperative
Community Choice Aggregators (CCAs) — described as “California’s way of doing electric cooperatives”
The Inflation Reduction Act (IRA) and its “direct pay” provision
Resources
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