Electric cooperatives are private, non-profit corporations owned by their consumer-members. They are similar in concept to other consumer-owned businesses; including farm produce marketing co-ops and newsgathering and reporting co-ops, like the Associated Press.
Members of electric cooperatives express higher than average levels of customer satisfaction. It’s no wonder. Electric Cooperatives are different from other forms of business, and member-owners of cooperatives notice this difference. Here’s why:
- Co-ops put consumers first because the consumers are the owners. In addition, co-ops are locally owned and operated.
- When members call their co-op, they are talking with their neighbors.
Both of these aspects combine to make co-ops more responsive because members are the owners, and each co-op is accountable to their neighbors and community.
The Cooperative Principles
Cooperatives find the key to success and distinguish themselves because of seven basic principles:
Voluntary and Open Membership:
Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
Democratic Member Control:
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
Members’ Economic Participation:
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
Autonomy and Independence:
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
Education, Training, and Information:
Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
Cooperation Among Cooperatives:
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
Concern for Community:
While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
Any organization failing to measure up to any one of these seven "principle" tests cannot be considered a cooperative.
The role of a member
Each consumer of the cooperative is a member and has the right to:
- Have a vote in the affairs of the cooperative
- Elect directors to serve on a Board of Trustees
- Receive an allocated “margin” in the form of capital credits
To read more about how the electric co-op works or the capital credit process, see our FAQ
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