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.
