Introduction
Electric cooperatives, also known as rural electric cooperatives, are member-owned organizations that provide electricity to rural areas. These cooperatives are different from investor-owned utilities (IOUs) as they are owned and governed by the consumers they serve. Electric cooperatives have been serving rural America for many decades, bringing electricity to areas that would otherwise be underserved or unserved.
History of Electric Cooperatives
The history of electric cooperatives dates back to the 1930s when President Franklin D. Roosevelt established the Rural Electrification Administration (REA). The REA aimed to bring electricity to rural areas by providing loans to electric cooperatives for the construction of power lines and other infrastructure. This initiative was a response to the lack of electricity in rural areas, which hindered economic development and quality of life.
How Electric Cooperatives Work
Electric cooperatives operate on a not-for-profit basis, which means that any revenue generated is reinvested back into the cooperative to improve infrastructure and provide better services to members. Members of the cooperative are also owners and have a say in how the cooperative is governed. Each member has one vote, regardless of the amount of electricity they use.
Benefits of Electric Cooperatives
There are several benefits of being a member of an electric cooperative. Firstly, electric cooperatives prioritize serving their members rather than maximizing profits. This means that members can expect reliable and affordable electricity. Additionally, electric cooperatives often provide other services such as energy efficiency programs, renewable energy options, and community development initiatives.
Cooperative Principles
Electric cooperatives operate based on seven cooperative principles:
1. Voluntary and Open Membership
Electric cooperatives are open to all potential members who are willing to accept the responsibilities of membership and contribute to the cooperative's mission.
2. Democratic Member Control
Members of electric cooperatives have equal voting rights, regardless of the amount of electricity they consume. This ensures that decisions are made democratically and in the best interest of the cooperative as a whole.
3. Members' Economic Participation
Members contribute to the cooperative's capital and share the economic benefits that result from the cooperative's operations.
4. Autonomy and Independence
Electric cooperatives are autonomous organizations that are controlled by their members. They have the freedom to make decisions that are in the best interest of their members and their communities.
5. Education, Training, and Information
Electric cooperatives provide education and training opportunities to their members, employees, and the general public to promote understanding and knowledge about the cooperative model and the benefits it offers.
6. Cooperation Among Cooperatives
Electric cooperatives work together and support each other to strengthen the cooperative movement and provide better services to their members.
7. Concern for Community
Electric cooperatives are committed to the sustainable development of their communities. They actively participate in community initiatives and support local economic growth and social well-being.
Conclusion
Electric cooperatives play a vital role in providing electricity to rural areas and promoting community development. Their member-owned and not-for-profit model ensures that the needs of the members are prioritized. By operating based on cooperative principles, electric cooperatives foster a sense of community and empower their members to participate in the decision-making process. As we move towards a more sustainable future, electric cooperatives are also embracing renewable energy options and energy efficiency programs to provide cleaner and greener electricity to their members.