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.
 | Voluntary and Open Membership. Cooperatives are open to all persons able to use
their services and willing to accept the responsibilities of membership. |
| Democratic 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. |
| Members’ 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. |
| Autonomy and Independence. Cooperatives are autonomous, self-help organizations
controlled by their members. |
| Education, 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. |
| Cooperation among Cooperatives. Cooperatives serve their members most effectively
and strengthen the cooperative movement by working together. |
| Concern for Community. Cooperatives focus on filling needs of their members, and
also work for the sustainable development of the communities they serve. |
