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What’s in it for “we?”

One of the most attractive features of cooperatives is that we answer the popular question, “What’s in it for me?” with “What’s in it for we!” Cooperatives are formed when the market fails to offer a good or service, with decent quality, at an affordable price. Electric cooperatives in Tennessee were formed in the 1930s because, when investor-owned utilities realized there was not enough profit to be made in our community, they refused to offer electricity.

The founding members of these co-ops went door to door to collect $5 in order to raise a portion of the original investment the co-op needed. Those “go-getters” realized the only way to get electricity for me was to get it for we, the whole community.

Cooperative ownership is in the hands of the people who use the co-op’s goods and the services (not investors), so not only do co-ops start out answering the question of “What’s in it for we?” – they continue to answer that question for as long as they exist.

These days, we often hear about companies that abandon their local communities and move overseas in search of cheaper labor. This negatively impacts the community through job loss, decline in housing values and school closures. Because local residents own a majority of cooperatives, they are less likely to leave their community. In fact, it would be impossible for Tennessee’s electric cooperatives to operate elsewhere. The co-op is a critical part of what makes the community a community.

The way co-ops continue to answer the question, “What’s in it for we?” is critical to their survival. It is imperative that we keep you – our members – as the primary focus. Keeping rates as low as possible is one major part of that focus, but ensuring that we provide real value as your trusted energy advisor is also extremely important.

By maintaining that focus with your help and support, we will continue to be able to serve the “me” and the “we” in our community long into the future.

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There is a Cooperative Difference

While all electric utilities offer the same product, where it comes from makes a difference.

In the U.S., the vast majority of people receive their electricity from one of three types of utilities; investor-owned, municipal-owned or through their electric cooperative, which is owned and controlled by the people who use it. Let’s take a closer look at these three types of ownership models and see why it matters to you.

In the investor-owned model, the corporation is owned by a great number of stockholders who may or may not be real customers of the utility. Investor-owned utilities tend to be very large corporations such as Entergy, Con Edison or Excel. They serve large cities, suburban areas and some rural areas, too.

In most cases, investor-owned utilities (IOUs) have few employees in the communities where they operate. This, combined with the fact that they have outside investors whose sole motive is to make a profit on their investment, generally tends to lead to less personalized service. Consumer surveys confirm that IOUs have the lowest customer satisfaction ratings. About 72 percent of the U.S. population is served by investor-owned utilities.

Municipal electric systems, as the name implies, are government owned. They can serve large cities, like Los Angeles, Austin or Orlando, or smaller areas, like Jackson, Knoxville or Chattanooga.  In municipal systems, the city runs the utility with little to no meaningful oversight from the citizens. About 16 percent of the market is served by municipal utilities.

Rural electric cooperatives serve the smallest number of consumers, about 12 percent of the market, which equals 42 million people. There are more than 800 other electric co-ops in 47 states in addition to the 23 in Tennessee. While co-ops serve the fewest number of people, our electric lines cover more than 75 percent of the U.S. landmass. This is because we provide power where others once refused to go because of the low population density. Electric co-ops rank highest in member satisfaction among the three types of utilities. We believe this is because we serve member-owners, not customers.

As the electric utility business continues to evolve, we are committed to being there for you, our member, to provide for your electric energy needs. Unlike large investor-owned utilities, we are rooted right here in Tennessee. Over the years, we have answered the call to provide additional benefits and services because it is extremely important to us that our community thrives and prospers.  This is why Tennessee co-ops are active in economic development and energy efficiency and help to prepare young leaders for the challenges of tomorrow.

There is a cooperative difference. You own us, and we are here to serve you.

Adam Schwartz is the founder of The Cooperative Way a consulting firm that helps co-ops succeed.  He is an author, speaker and member-owner of the CDS Consulting Co-op.  You can follow him on Twitter @adamcooperative or email him at [email protected]

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