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Local control
Being a co-op member means you are a part owner of the utility and have the right and responsibility to vote on how the co-op is run.
Photo by Josh P. Crotzer
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Solving modern problems
Today’s co-ops are tackling new challenges such as a lack of high-speed internet connections in rural communities. TriCoLink, a broadband subsidiary of Tri-County Electric Cooperative, solved the problem for members like Ken and Delia Hasty of St. Matthews by installing firberoptic lines throughout its service area.
Photo by Josh P. Crotzer
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Neighbors helping neighbors
When you call the member service line at your local co-op, you talk to a caring, local professional like Horry Electric Cooperative’s Colby Hunsucker, not some far-away call center.
Photo by Jennifer Cummings
Before Lou Green became a leading South Carolina news anchor and, later, publisher of this magazine, he grew up on his parents’ dairy farm in south Georgia, plowing crops, loading hay and performing other farm work to keep the family business operating.
The farm was served by an electric cooperative, and although Lou did not attend the co-op’s annual meetings, his parents let him know “the co-op was a good thing.” The feeling stuck through two decades in broadcasting and to the day he came to work as a top executive at The Electric Cooperatives of South Carolina, Inc., the state association of electric cooperatives. “I still feel it,” he says, 30 years later.
Hundreds of thousands of South Carolinians have the same sentiment. They don’t give deep thought to how electricity works. They just want it to work. Always. They don’t analyze the corporate structure of their utility. They just want it to be responsive to their needs. Always.
Electricity is as close to a biological human need today as something external to us can be. For most of us, it is how we get our food, our water and our warmth. So, it makes sense to ask, in our fast-paced, ever-changing and electricity-dependent world, are co-ops still “a good thing?”
I believe that they are. In fact, I believe they may turn out to be even better suited to address the challenges we face today than they were in electrifying rural areas 80-plus years ago.
You don’t have to be a cooperative member to understand the benefits of a member-owned utility. The local control. The ownership by consumer members. The business structure that focuses on consumer needs, not shareholder profits.
Cooperatives are the antidote to many of the ills we see in our world today. While chasing better outcomes via automation, increased scale and more complex systems, many of our most-needed institutions have begun to lack humanity, become detached, move slowly and shake our trust.
Where bureaucratic red tape at large institutions keeps needed innovation from occurring in a timely manner, member-owned cooperatives have the ability to respond quickly.
Where big companies can put profits over people, cooperatives, by their very nature, are service-oriented.
Where monolithic authorities create one-size-fits-all solutions to problems, cooperatives bring offerings specifically tailored to their local communities.
The customers are always right
A challenge for any entity with thousands of owners is balancing transparency and accountability with the ability to operate nimbly. For-profit monopolies like investor-owned utility companies are typically regulated by a third-party commission whose job it is to ensure that consumers are protected. For government-owned entities, consumers have a voice either directly or indirectly through their elected officials.
Both of these models have their advantages, but they also can lack the ability to adapt quickly to changing circumstances. Most public matters move slowly. Matters that involve regulatory, legal or legislative proceedings, by their nature, take time. That fact is not an accident or byproduct of poor design; it is a feature designed to encourage reasoned decision-making. For investor-owned, for-profit utilities, time is built in so the third parties representing the interests of the customer can be heard. For government-owned entities, particularly those whose customers are not directly represented, time is built into the political process, and every citizen, whether they take service or not, has the ability to be involved.
In contrast, cooperatives have regulation and oversight by their consumers built into their very structure. Every person who takes service from the cooperative has a vote. Cooperative members directly select the people who decide what is and what isn’t acceptable for their utility. The consumers select the leadership, who then set the rates and guide the direction of the cooperative. Everyone who sits on a board of a co-op and makes those decisions has to be a consumer of the cooperative.
The cooperative business model eliminates the need for third-party regulation since the consumers own and run the business themselves.
The cooperative business model eliminates the need for third-party regulation since the consumers own and run the business themselves. It creates businesses with a nimble accountability. In fact, third-party regulation of cooperatives only makes them less nimble and less directly accountable to their consumers. If legally authorized decisions made by a distant authority contradict the legally authorized decisions made by a locally elected board, how are the interests of consumers served?
This direct consumer control also allows cooperatives to merge functions without losing this nimble accountability. There is an advantage to spreading very large costs across a very large number of people so that each person shares a relatively small amount of the burden. Cooperatives have figured out a way to combine forces and spread costs over many more consumers while keeping all of the decisions in the hands of their members. It is a benefit baked into a model where consumers own and control the company that serves them.
People over profits
The service orientation of cooperatives is ingrained in their DNA.
Electric cooperatives are not-for-profit companies. If your co-op takes in more than it needs to operate in any given year, those excess funds are held in trust for the members. When there are enough operating funds to do so, those excess funds are returned to members on a pro rata basis. These excess funds are called “capital credits,” and they come back in the form of a check or a bill credit.
Cooperatives invest heavily in economic development. In some communities, the cooperative is the primary driver of the effort to bring jobs and new industries. When cooperatives engage in economic development, they do so based on a formula that ensures a positive payback for all members within a short timeframe, and they employ agreements that claw back funds if job and investment thresholds are not met.
Since maximizing profits is not the measuring stick for an electric cooperative, they can more easily focus on other measures of success. Reliability and safety are the two that would be most familiar to folks, but member satisfaction is the ultimate report card for an electric cooperative. That measure is taken each year through the American Customer Satisfaction Index, and electric cooperatives outpace many of the for-profit power providers. If you’ve ever experienced an issue with a bill, had a unique request, or lived through an extended outage, you’ve seen the cooperative commitment to service firsthand. And if you haven’t experienced any of these, that may be because the co-op’s commitment to service prevented the issue before it occurred.
Locally operated
Little is more frustrating than having a problem with an institution and trying to solve it by talking to someone hundreds of miles away (or more). Frequently, we find ourselves at the mercy of a person who can’t relate to our problem in an office that is detached from what’s really happening on the ground. Even when the person on the other end of the line is kind, professional and caring, they can be constrained by one-size-fits-all rules.
On the other hand, little is more satisfying than making a call when you have a problem, reaching a neighbor you know and trust, and knowing they’ll take care of it for you. With an electric cooperative, you know the owner (look in the mirror!), you may go to church with the CEO, or your kids may go to school with the children of a board member. You may be as likely to talk about an issue with your service in the grocery store as you are when calling the member service line.
Another benefit to being part of a local cooperative is the service offerings that are geared to the needs and desires of the community. A great example of this “right-sizing” approach is broadband. In some communities in South Carolina, electric cooperatives have initiated broadband service. In other communities, they have not. In all cases, the decisions were made by local people based on the needs of the community. They were not made by a distant authority determined to offer a one-size-fits-all “solution.”
The co-op is yours
At a time when faith in traditionally trusted institutions is low, having a direct say in the operation of something as fundamental as your power company is more important than ever. But, like most things, you only get out of it what you put in.
The cooperative model is an extraordinarily powerful thing. It has literally electrified some of the most remote spots on planet Earth, bringing a quality of life to people that was unimaginable just four generations ago. The cooperative model, like democracy itself, is also fragile. It cannot function well without the active participation of its members. A strong cooperative has a membership that is engaged and active. They are willing to share their ideas, their time and their effort to harness the power of working together to improve people’s lives in their communities.
As cooperative members, you are doing a great job of actively engaging with your companies. Even when we have seen problems arise within cooperatives, an active and engaged membership has asserted itself and made sure that the consumers at the end of the line, and the principles upon which the cooperatives are founded, were served.
Lou Green’s childhood sense that “the co-op is a good thing” stayed with him throughout a career in the cooperative movement. Having served as the emcee at hundreds of cooperative annual meetings, he still relishes how good it is to see South Carolina co-op members working together through their cooperatives to build, maintain and operate the state’s largest utility network.
“It’s hard not to visit a cooperative annual meeting without feeling invigorated and inspired by it,” he says. “People pulling together to help each other will always be a good thing.”
John Frick is the Vice President for Government Relations at The Electric Cooperatives of South Carolina, Inc., the statewide association of not-for-profit electric cooperatives.