Guest Editorial
By Jack Reasor, President & CEO, Virginia, Maryland & Delaware Association of Electric Cooperatives

Jack Reasor
Jack Reasor

Self-determination is the ideal upon which this nation was founded. It is the principle that under-girds democracy.

The first cousin to self-determination is self-help. "Doing for yourself" is the concept that spawned the electric cooperative movement in the 1930s and 1940s, when rural communities across America formed consumer-owned utilities to bring electric energy to the countryside.

These traditions — self-determination and self-help — have perpetuated and strengthened our nation over its 211-year life. They also form the core reasons why electric cooperatives have been so successful.

And now, Virginia’s consumer-owned electric cooperatives believe the time is right for co-op consumer-owners to have a choice as to whether to self-regulate, which is a very logical extension to the ideas of self-help and self-determination.

So during the 2001 session of the General Assembly, the trade association that represents Virginia’s electric cooperatives will seek legislation to allow each co-op’s membership to vote on whether it will regulate its rates and services and other business matters, or continue under full State Corporation Commission regulation.

Self-regulation is neither new, nor is it unusual. In fact, cooperatives in about three-fourths of the states across the country establish their own rates. And rates are only one facet of a cooperative’s operations that might be considered for self-regulation. Setting the terms and conditions of electric distribution service could also be considered for self-regulation by Virginia’s electric cooperative consumer-owners.

The Case for Self-Regulation

So why would you, as a consumer-owner of an electric cooperative, even want to consider voting to allow your co-op to self-regulate?

Public service commissions — such as Virginia’s State Corporation Commission — regulate utilities and other corporations with public domain in order to protect the consumer. The public service commission acts as a buffer between the interests of consumers and the interests of a corporation’s owners, since the interests of the two groups are obviously different, and at times even at odds.

But electric cooperatives are different: The consumers are the owners. These consumer-owners elect from their midst the members of the cooperative’s board of directors. Since a cooperative utility’s consumers and owners are one and the same, there exists no potential for conflicting interests. Why would consumers overcharge themselves, or provide themselves with less than the best possible service? The answer, of course, is that they wouldn’t.

More importantly, self-regulation could enable electric cooperatives to better serve their consumer-owners by helping to save considerable amounts of money. For example, it can cost tens of thousands of dollars or more in staff time and consulting fees for a cooperative to file a rate-adjustment case before the State Corporation Commission. If the adjustment is for a decrease in rates to the consumer-owner, then the cost of filing reduces the amount of that decrease. If the adjustment is for an increase, then the cost of filing adds to the rate increase. Self-regulation would eliminate these costs.

Up to You, the Consumer-Owner

What this boils down to is giving you, the consumer-owner of your electric cooperative utility, the freedom to choose whether you want your co-op to be self-regulated, or whether you want the State Corporation Commission to continue regulating your cooperative.

As the legislative process unfolds, you may be called upon to assist your cooperative in this effort to bring the freedom-of-choice issue to a vote. Remember: The proposal is not for legislation that would force cooperatives to self-regulate, but rather legislation that would allow cooperative consumer-owners such as you to vote on whether to self-regulate. And this legislative proposal would not remove your cooperative from all regulatory oversight: Under the proposal, the State Corporation Commission would continue to regulate safety issues and to define service territories.

This effort is really just a re-affirmation of the principles on which this nation and your electric cooperative were founded: self-determination and self-help.

Jack Reasor, a former state senator, currently serves as president and CEO of the Virginia, Maryland & Delaware Association of Electric Cooperatives, and of Old Dominion Electric Cooperative.


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