As big business keeps getting bigger, how 2 Iowa electric cooperatives find success staying small
Pleasant Hill Community Line's most recent annual report says a lot about 87-year-old Leonard Rotschafer's three decades at the small electric cooperative in north-central Iowa.
General manager: Leonard Rotschafer.
Customer relations and complaints: Leonard Rotschafer.
Accounts payable: Leonard Rotschafer.
"He does everything," said Jim Cisco, Pleasant Hill's board president, laughing. "He's unbelievable."
At a time when the federal government worries that the merger-driven ballooning of big businesses — from tech firms to drug makers and meatpackers — are stifling competition, padding profits and potentially gouging consumers, the north Iowa cooperative has found success in staying small.
Really small. Pleasant Hill Community Line provides power to about 120 farmers, families and businesses in the rural area south of Webster City.
Its residential electric costs rank 38th lowest in the state, based on an analysis of 181 rural cooperatives, municipal and investor-owned utilities by Jim Martin-Schramm, a Winneshiek Energy District board member in northeast Iowa.
That's better than the two big investor-owned utilities serving Iowa: MidAmerican Energy ranks 41st, and Alliant Energy, 178th, the analysis shows.
"We run with volunteers. We have no vehicles. No employees. No office," Cisco said, adding that Rotschafer contracts with the board to read the co-op's meters, so "our overhead is pretty low."
Boone Valley Electric Cooperative, which vies each year with Pleasant Hill as the state's smallest electric provider with about 130 customers, does even better, with the state's 19th-lowest residential rates.
Like Rotschafer, Boone Valley's Curtis Meinke fills several roles at the cooperative in rural Humboldt County, about 40 miles north of the Pleasant Hill cooperative's service area.
Meinke and his wife, Karla, read meters in 20-below-zero snowstorms and 100-degree heat. They've fielded outage calls during a funeral and while on vacation and occasionally get angry stares from unhappy customers at the grocery store.
Like Rotschafer, Meinke is committed to the cooperative.
Boone Valley's service area includes the first home in Iowa to receive electricity under the 1936 Rural Electrification Act. The New Deal legislation provided loans that helped accelerate the co-op movement, in which farm communities banded together to establish electrical systems in areas too sparsely populated to draw commercial providers.
"There’s a lot of history here," said Meinke, who farms and runs a trucking business as well as working part-time for the cooperative.
"The members have been reluctant to merge or sell out to a larger co-op," he said.
But Boone Valley and Pleasant Hill are nearing a crossroads: Rotschafer and Meinke, 58, both have to find people to replace them in jobs that are more community service than paying gigs.
After two knee-replacement surgeries, Rotschafer lets Cisco scramble down steep ice-covered paths to read hard-to-reach meters in the Briggs Woods county park. The board has yet to decide how to move forward once Rotschafer decides to retire, Cisco said.
Meinke acknowledged his eventual departure could likewise put the Boone co-op in a bind.
"It's going to be a challenge," he said of finding someone to take over his role.
His wife wants to talk about retiring but Meinke is hesitant. "We disagree," he said. "But I can't do it without her. So I don't know how many more years we'll do it."
Heat, ice, bird poop: Whatever the hazards, meters must be read
Rural electric cooperatives aren't immune to the consolidation that's swept through the country. Citing the need to become more efficient, lower costs and improve service to members, many have allowed themselves to be acquired by larger operations.
Rotschafer said Pleasant Hill put itself up for sale in 1970, when the cooperative's infrastructure needed significant repairs, most likely after a severe storm.
"We were in bad shape," he said. "But no one would make us an offer. So, we rebuilt the lines. And it's worked for us."
Cisco said the cooperative takes pride in having served its rural customers for 93 years. Many of the founding members' descendants still live in the area and are active on the board.
"If you want to start a fight, just mention something about selling off the place, and those guys come to life pretty fast," Cisco said.
For 30 years, Rotschafer and his wife, Colleen, have read the system's 123 meters once every three months, a billing cycle that's unique to Pleasant Hill. More recently, it has been Cisco who makes the quarterly rounds with Rotschafer. They check meters monthly for large hog confinements, businesses and government operations.
"Nowadays, most utilities have little handheld scanners and someone drives up and down the neighborhood," Cisco said, "just scanning numbers off of the meter." Or utilities use smart meters that transmit power and gas usage data to their home offices, eliminating the role of readers.
Luckily, Rotschafer can read some of Pleasant Hill's meters with binoculars, Cisco said. Others are more work.
"A lot of these meters were put in years ago," he said. "They're nearly inaccessible. With glare from the sun or bird poop, sometimes you just got to go down there and read the darn thing."
So Rotschafer and Cisco are "walking down in ditches, crawling across ice," Cisco said. "We have one meter where you practically have to drop a rope over a ravine to go read it."
Meinke said he and his wife drive about 180 miles each month to read Boone Valley's meters. The cooperative provides power to Renwick, a town of about 275, but the city reads its own meters and maintains its power lines.
Meinke tackles the hard-to-reach meters — and a few homes that have farm dogs. His wife is a little leery of "unruly dogs," he said, but the canines seem to like him. "I've never had a problem."
On call '365 days a year, 24 hours a day'
Both Boone Valley and Pleasant Hill buy power wholesale and distribute it through their locally owned electric lines. Boone Valley has 60 miles of lines; Pleasant Hill, 30 miles.
Power for both cooperatives comes from Corn Belt Power Cooperative in Humboldt. Boone Valley buys it directly from Corn Belt, and Pleasant Hill buys it via Webster City's municipal utility, which also provides billing services and repairs lines during outages.
Working from their home, Meinke and his wife manage the billing, using a computer program developed for the cooperative. He handles outage calls and calls Prairie Energy Cooperative in Clarion or another utility to repair lines during storms.
"I’m on call 365 days a year, 24 hours a day," Meinke said. "I’ve been in Florida on vacation and at my aunt’s funeral and had to handle outage calls.
"Those are challenges that someone else will have to take on some day," he said.
Rotschafer, who joined the Pleasant Hill Community Line in 1992 as the cooperative's board secretary, contracts with Webster City to answer outage calls when he's out of pocket.
Though Iowans owed about $41 million on their utility bills in January, Pleasant Hill and Boone Valley say delinquencies aren't something they struggle with. Neither reported uncollectible accounts in their 2019 annual report to the Iowa Utilities Board, the most recent available.
"I'm not saying we've never been burnt, but for the most part, it's a non-issue," Meinke said.
Rotschafer said he works with families who get behind. He calls, and if that doesn't work, he uses old-fashioned shoe leather.
"I knock on people's doors," he said. "We don't want to see anyone get cut off."
While most of Boone Valley and Pleasant Hill's customers are residential, they're still competitive on the statewide list when commercial and industrial rates are added in: Boone Valley ranks 38th lowest and Pleasant Hill drops to 100th, according to Martin-Schramm's analysis.
MidAmerican has the state's sixth-lowest rate and Alliant, the 109th.
'He knows each pole by name'
Being small helps the cooperatives with maintenance, according to their leaders.
Rotschafer and Cisco visually inspect Pleasant Hill's electric lines and poles every three months; the Meinkes inspect Boone's every month.
That approach is unusual, Cisco said. Lines owned by some utilities may go uninspected for five years or more. "We literally see every inch of the system every 90 days and have over the past 93 years," Cisco said.
Rotschafer is especially good at spotting poles or lines that need repair, Cisco said, most likely because the octogenarian worked for a telephone company for 42 years.
"He can spot a pole needing repair a mile away," Cisco said. "He can see a dangling wire, a tree branch" that has the potential to interrupt power.
"He knows each pole by name," Cisco said.
Still going by the book
When Rotschafer started working with what was then Northwestern Bell as a lineman, he said some customers still used magneto phones, hand-cranked machines that now exist only in old movies.
Shortly before he retired from the company that's now CenturyLink, he was installing equipment that connected homes to high-speed fiber cable.
Rotschafer has been slower to adopt technology as a retiree, though.
Uninterested in buying a computer, he carries a thick book to record customers' energy use as he reads meters. A Webster City clerk types the information into the city's billing system.
Rotschafer chafes under state and federal regulators' requirement that utility data be filed online. Cisco provides his general manager a digital connection to regulators. "It's a pretty simple process. We can't be hacked," Cisco joked.
The small cooperative might look at getting smart meters someday, he said. But not while Rotschafer is willing to keep serving it. "He just keeps chugging along."
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at email@example.com or 515-284-8457.