Cooperative 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.
Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions.
Members’ Economic Participation
Members contribute equitably to, and democratically control, the capital of their cooperative.
Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members.
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.
Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together.
Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of their communities.
Electric cooperatives are private, independent electric utilities, owned by the members they serve. Democratically governed businesses, electric cooperatives are organized under the Cooperative or Rochdale Principles, anchoring them firmly in the communities they serve and ensuring that they are closely regulated by their consumers.
Electric cooperatives began to spread across rural America after President Franklin D. Roosevelt created the Rural Electrification Administration (REA) in 1935. The Executive Order establishing the REA and the passage of the REA Act a year later marked the first steps in a public-private partnership that has, over the last 70 years, bridged the vast expanse of rural America to bring electric power to businesses and communities willing to organize cooperatively and accept responsibility for the provision of safe, affordable and reliable electric power.
Today more than 900 electric cooperatives power Alaskan fishing villages, dairy farms in Vermont and the suburbs and exurbs in between. They provide reliable and technologically advanced service to 40 million Americans while maintaining a unique consumer-focused approach to business.
Federal Assistance to Electric Utilities
According to Nobel Laureate economics professor, Lawrence R. Klein of the University of Pennsylvania, all types of utilities (Investor Owned Utilities (IOUs), Municipal Owned utilities and electric cooperatives enjoy some form of subsidy. You may be surprised to learn that electric cooperatives receive the least amount of subsidy per customer.
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All electric utilities receive federal subsidies in one form or another. Calculations based on federal government financial reports show that rural electric cooperatives
receive the least federal amount of subsidy per consumer. This is in spite of the fact that RECs serve only 7 consumers per mile of line compared to 35 for IOUs and 47 for city-owned utilities.
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The difference in federal subsidies for each type of utility becomes even sharper after considering that electric cooperatives typically serve sparsely populated areas: they have an average of 7 customers per mile compared to 35 for IOUs and 47 for municipal owned utilities.