An Efficient Contracting Approach to Rural Electric Cooperatives and the Development of Upper Midwest (U.S.) Wind Resources

Many factors support the likelihood of major wind power deployment in the Upper Midwest of the U.S. over the next two decades. This paper specifically considers the dilemma faced by the existing rural electric co-ops (RECs), to whom wind development poses simultaneously a threat and an opportunity. We argue that the threat can be ameliorated through more appropriate tariff strategies, and that there is an efficient-contracting rationale for RECs to take the lead in future development of the wind resource.