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Electric Cooperatives are private, non-profit
corporations owned by their consumer-members. They are similar in
concept to other consumer-owned businesses such as farm produce
marketing co-ops and news-gathering and reporting co-ops, like the
Associated Press. All Cooperatives were formed out of what is known as
the “Rochdale Principles,” so-named because of a system
designed by a group of 28 weavers in Rochdale, England, to market their
products.
Essentially, each consumer of the Cooperative is a member, with one vote in the affairs of the Cooperative.
Bylaws, adopted by the members, set forth their rights
and responsibilities and lay out the guidelines that assure a
democratic organization. Members elect directors to serve on a Board of
Trustees, and an annual meeting is held to conduct the business of the
Cooperative. The local board employs a professional manager for the
co-op, and the manager then has the duty of hiring trained personnel to
perform the work necessary for the co-op to function.
The local Cooperative Board establishes rates, based
upon what it actually costs to provide dependable electric service and
to meet payment schedules on loans. Rates are designed so that revenues
exceed expenses. This “margin” is allocated back to members
of the Cooperative in the form of capital credits. Members receive
money back based on the amount of electricity they have used during the
allocation period. This return of capital maintains the non-profit
status of the Cooperative.
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