Principal Principles
By Richard G. Johnstone, Jr.

Now that the new century is here, the year 2002 — which "way back" in 1999 seemed so far away — seems almost close enough to touch. It’s in 2002 that electric competition in Virginia will officially begin. Between now and then, there’ll be several pilot programs designed to introduce Virginians to the concept of choice in the electric utility industry.

And under the electric utility restructuring legislation passed last year by the Virginia General Assembly, all Virginians will be given the opportunity to select their electric supplier beginning in 2002 and by no later than Jan. 1, 2004. The legislation requires that all Virginians be given the opportunity to choose their supplier — that is, the company that provides the actual electricity that flows into their home or business. The utility that delivers the electricity to a given home or business will remain the same, so your electric cooperative will continue to be your "local carrier," as it were.

And your electric cooperative also wants to continue to be your electric supplier as well, offering the best possible value for your energy dollar. In a competitive electricity marketplace, cooperatives possess a tantalizing array of competitive advantages — namely, our local presence, commitment to community, devotion to outstanding service, operation at cost, and ownership by those we serve.

These competitive edges are byproducts of who we are. When the first modern-day cooperative was formed by a group of weavers and tailors in Rochdale, England, in the 1840s, these artisans were forming their own self-help group to provide themselves with necessary products at the best possible price. For similar reasons, rural residents of the U.S. created electric cooperatives in the 1930s, to provide themselves with a vital service that large companies were unwilling or unable to provide.

And anchoring all cooperative businesses — including the 900-plus electric cooperatives that serve some 30 million Americans — are seven key principles. These principles define what each cooperative stands for, and how it operates. What it holds dear, and who it serves. What it needs and what it offers, and why. These seven principles have stood the wrenching tests wrought by more than a century and a half of enormous change. The seven Cooperative Principles developed by the Rochdale pioneers follow.

bulletVoluntary and Open Membership. Cooperatives are open to all persons able to use their services and willing to accept the responsibilities of membership.
bulletDemocratic Member Control. Cooperatives are controlled by their members, who actively participate in making decisions, such as adopting or revising bylaws. Board members are elected democratically from the membership and represent the members in such functions as setting policy.
bulletMembers’ Economic Participation. Cooperatives are owned by their members. Electric cooperatives operate on a not-for-profit basis, with any excess revenues allocated to the members in the form of capital credits, and later returned to members in proportion to their usage.
bulletAutonomy and Independence. Cooperatives are autonomous, self-help organizations controlled by their members.
bulletEducation, Training and Information. Cooperatives communicate regularly with their members and elected representatives, and provide training for their managers and employees, so all these groups can contribute effectively to the development of their cooperative. Cooperatives also inform the general public about the nature and benefits of cooperation.
bulletCooperation among Cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together.
bulletConcern for Community. Cooperatives focus on filling needs of their members, and also work for the sustainable development of the communities they serve.

Democratic ownership and control, open communication with those they serve, and attentiveness to the needs of their communities are obviously strong selling points for cooperatives in the budding competitive marketplace for electricity. But more importantly, they’re the values electric cooperatives have lived by since being formed 65 years ago.


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