Editorial

A Tale of Two Utilities
by Richard G. Johnstone Jr., Editor

Richard Johnstone
Richard Johnstone

To paraphrase 19th-century literary icon Charles Dickens, now really is “the best of times and the worst of times.” It’s an age of high-tech marvels, and low-tech terror. Of smart bombs and dumb human beings. Of medical miracles and ethical dilemmas. Of heart-warming charity and heart-rending cruelty. It’s an age that could usher in unprecedented global cooperation, or unimaginable global catastrophe. The stakes are higher than ever, and so is the potential jackpot when the U.S. has fully won the war on terrorism.

This is also an age of colossal corporate successes, and spectacular failures. Imagine, if you will, a gas-and-electric utility so huge that it reached number seven on the list of Fortune 500 companies. That does business in virtually every state and has $50 billion in total assets. That was one of the most remarkable success stories in U.S. corporate history. Its Houston, Texas-based executives mixed cowboy bravado with energy expertise to create a company that pushed early, hard — and with some success — for deregulation of the electric utility industry. 

This company began life in the natural gas business, later added electricity to its portfolio and became the largest energy trader in the country. Share prices for its stock soared, to nearly $85 a share just over a year ago. At that time, you could have cashed in one share of its stock and bought two box-seat tickets to see a Houston Astros baseball game at Enron Field, whose naming rights the company had bought. As of late November, cashing in a share of Enron stock would have generated only enough money — about 26 cents — to buy a glass of lemonade from a neighborhood child on a hot summer day.

That glass of lemonade would keep you or me going on a sultry August day. Whether and how Enron will keep going at all is an open question, as the company filed for Chapter 11 bankruptcy protection in early December. Its filing marks one of the largest corporate bankruptcies in U.S. history, and surely one of the fastest falls ever from corporate titan to penny stock. Government agencies are investigating, and lawsuits have been filed both by investors and by Enron employees. It will likely take a good while before anyone can determine the company’s long-term prospects.

Meanwhile, miles away as the crow flies and light years away in business philosophy, there’s another breed of utility. One that has no desire to be the biggest, only the best. One that prides itself on its local presence, not its national or international reach. One that doesn’t have to balance the demands of shareholders against the interests of customers, because the customers are the shareholders. These member-owners each own an equal share of the utility, and thus have an equal vote in electing board members or adopting policy. This other breed of utility, of course, is an electric cooperative.

In an era of great change and great challenge, Virginia’s 13 member-owned electric cooperatives are proud to be a stable, reliable presence in communities across the Commonwealth, serving some 350,000 homes and businesses in rural areas, small towns and suburbs. We’ve been around for three generations, having been formed in the 1930s by local citizens who wanted to provide themselves with a service that no one else was willing to provide. We hope to continue serving your community for many generations to come. 

We’re responsive because we’re local. We’re competitively priced because we sell our power at cost to our member-owners. Our most important “balance sheet” is what you think of us. Our “long-range business plan” is to be your utility of choice in a changing electric utility environment.

We’ll never move among the heady circle of Fortune 500 giants. But then, we don’t want to. We just want to stay right here, in this community, and continue serving you.

 

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