NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION (NRECA)

The National Rural Electric Cooperative Association (NRECA) is the national service organization for more than 900 utilities (generation and transmission (G&Ts) and distribution system cooperatives) that make up the electric cooperative business network. The association provides national leadership and member assistance through the following:

• Legislative representation before the U.S. Congress and the Executive Branch
• Representation in legal and regulatory proceedings affecting electric service and the environment
• Education and consulting for cooperative directors, managers and employees
• Energy, environmental, and information research and technology through the Cooperative Research Network (CRN)
• Insurance, employee benefits and financial services
• Technical assistance to utilities in 50 developing nations around the globe through its International Program Division (IPD)

NRECA membership includes statewide and regional trade and service associations; supply cooperatives; data processing cooperatives; credit unions; and more than 200 Associate Members. Associate Membership is open to entities that do business with members of the electric cooperative network.

Electric Cooperatives are:

• Private, not-for-profit independent electric utility businesses
• Owned by the consumers they serve
• Incorporated under the laws of the states in which they operate
• Established to provide at-cost electric service
• Governed by a board of directors elected from the membership, which sets policies and procedures that are implemented by professional staff

In addition to electric service, many electric co-ops are involved in community development and revitalization projects, e.g., small business development and jobs creation, improvement of water and sewer systems, and assistance in delivery of health care and educational services. Directors, managers and employees in the electric cooperative network work hard to bring a better quality of life to the people and communities they serve.

Touchstone Energy^® - the national brand of electric cooperatives - provides the resources of a national network that helps cooperatives take advantage of economies of scale and enhance their unique relationships with their local member-owners.

More than 620 Touchstone Energy cooperatives in 44 states deliver energy and energy solutions to more than 22 million members every day. Touchstone Energy helps its cooperatives communicate the distinctiveness of co-ops to business and residential member-owners, large and small, all across the country.

Four values are the foundation of every Touchstone Energy co-op's service to its members. It's how Touchstone Energy cooperatives put their slogan - “the power of human connections” - into action and earn the trust of millions of people, every day. The four values are:

Innovation
Touchstone Energy cooperatives offer new solutions and state-of-the-art technology to meet customers' needs.

Accountability
Since consumers own co-ops, they have a say and help chart the course for the business. Every member has an equal voice in running the enterprise. Unlike an investor-owned utility, in which the investor with the most shares has the most clout, co-op business is conducted through a locally elected board of directors and an annual meeting where policy is proposed and voted on by members, each having one vote.

Integrity
The co-op business model always puts customers first. Not-for-profit electric cooperatives deliver energy to their members at the cost of service. In contrast, investor-owned utilities typically distribute their profits to investors across the nation or even the world — not necessarily to those they serve.

Commitment to Community
Electric cooperatives invest time, money and expertise to build the local economy and strengthen relationships with consumer-owners.

864 distribution and 66 G&T cooperatives serve:

• 40 million people in 47 states
• 17 million businesses, homes, schools, churches, farms, irrigation systems, and other establishments in 2,500 of 3,141 counties in the U.S (80 percent of the nation’s counties)
• 12 percent of the nation's population

To perform their mission, electric cooperatives:

• Own assets worth $97 billion
• Own and maintain 2.4 million miles, or 43%, of the nation’s electric distribution lines, covering three quarters of the nation's landmass
• Deliver 10 percent of the total kilowatt hours sold in the U.S. each year
• Generate nearly 5 percent of the total electricity produced in the U.S. each year
• Employ 67,000 people in the United States
• Retire more than $483 million in capital credits annually.
• Pay more than $1.2 billion in state and local taxes

Electric Utility Comparisons

Note: "Investor-Owned" includes data for IOU affiliates engaged in competitive retail markets where appropriate

Source: 2005 EIA, RUS Data, CFC
NRECA Strategic Analysis ▪ Last Updated: February 2007

For more information about NRECA, visit www.nreca.coop.