011: Box? What Box? How Co-Ops Think Outside Traditional Boundaries

Co-Op Heroes: Stories from Electric Utility Operators

In this forward-thinking episode of The Co-Op Heroes podcast, hosts Pablo Fuentes (CEO of Bloom Spatial) and James Tanneberger (CEO of South Central Indiana REMC) explore what makes electric cooperatives uniquely positioned to innovate and push boundaries that investor-owned utilities often cannot.

James explains how his perception of electric cooperatives completely changed when he entered the industry eight years ago. Rather than the "sleepy organizations" he imagined, he discovered dynamic institutions driven by a single mission: improve the lives of our members. This mission, combined with cooperative structure, creates unique advantages for innovation.

The cooperative innovation advantage:

• Self-governance through member-elected boards rather than regulatory oversight
• Non-profit structure allowing investment in community benefit over profit maximization
• Ability to move quickly on opportunities without lengthy regulatory approval processes
• Willingness to take calculated risks when downside is minimal but upside is transformational

Real-world examples: James shares how Indiana cooperatives transformed the state's connectivity landscape. When state leaders trusted co-ops to bridge the digital divide, 25 out of 38 utilities built fiber networks. But cooperatives didn't stop there...30 organizations connected their networks to create Accord, a regional data superhighway that moved Indiana from 32nd to top 5 nationally in connectivity. This model expanded nationally through Tapestry, now supporting 12 states.

Managing innovation risk: James outlines his approach to risk management: only pursue opportunities where the downside risk is minimal but the upside could be transformational. He shares the story of building a fiber connection to a regional hub that seemed like a modest efficiency gain but opened unexpected doors, including a partnership with Indiana's I-light network that more than paid for the entire project.

The next big opportunity: The episode reveals an emerging opportunity that could reshape rural economic development: distributed data centers. As mega data centers face community opposition due to massive power consumption (200-500 megawatts) and water usage, cooperatives have identified an alternative model. With substations typically running at 50% capacity and fiber already connecting their networks, co-ops can deploy smaller 10-megawatt data centers on 1-3 acres without water consumption or major infrastructure upgrades.

This distributed approach offers multiple benefits: it's less disruptive to communities, utilizes existing capacity, improves co-op load profiles by adding consistent daytime consumption to balance residential peaks, and positions rural America as a competitive player in the AI economy.

Key insight: James argues that for cooperatives serving heavily forested territories with reliability challenges, the greater risk is not innovating. Standing still means accepting poor reliability and high rates, while calculated innovation creates paths to better serve members.

This episode challenges the perception of cooperatives as traditional utilities and reveals them as innovation leaders tackling some of rural America's biggest infrastructure challenges.

The Co-Op Heroes podcast brings you real stories from electric utility operators: the people who work around the clock to keep our communities powered.