More than a business model

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Most of you probably know that your electric cooperative is much more than the company that provides electricity to your home, farm or business. Your cooperative is part of the fabric of your community. This legacy goes back to the first Arkansas electric cooperative that was incorporated in 1937, aptly named First Electric Cooperative Corporation, headquartered in Jacksonville.

By June 10 of 1946, there were 17 local electric cooperatives providing electricity to homes and businesses all across the state of Arkansas, serving portions of 74 of our 75 counties. These electric cooperatives were formed by, and are owned and governed by, the members they serve. That means that you are a member-owner of your own cooperative, and you have a voice in how your cooperative serves you. This member-owned business model translates into a long list of what we call “member services,” which includes the magazine that you are reading.

This not-for-profit, locally driven business model means that you have local electric cooperative business offices in 43 towns across Arkansas and three in Oklahoma. You can walk into your local co-op office to open an account, pay a bill, talk to a service representative, get information on making your home more energy efficient, or buy a new, energy-efficient appliance for your home. Most of the other electric utilities closed their local offices years ago as a cost-saving measure. But our cooperative employees live, work and worship where you do, so we want your local communities to thrive just as much as you do. Our kids go to school and play ball with your kids. We work hard to grow our crops and businesses just like you do.

Cooperative employees are cheerleaders for the growth and success of their communities. Local cooperative employees are active in city and county government, and serve on school boards; they get involved in chambers of commerce and economic development; they serve on non-profit community service boards; they volunteer for school fundraisers and community events; they serve as Rotary and Kiwanis members.

Another thing that makes us stand out from other business models is the fact that cooperatives are a “not-for-profit” business. Electric cooperatives are similar to credit unions (like Farm Credit), telephone cooperatives, food cooperatives (like Riceland) and housing co-ops. Electric cooperative boards make arrangements for low-cost financing for power lines and substations, and those financing costs are part of the rates on the electric bill. The money that is needed to build large capital projects — such as electric distribution lines, transmission lines and power plants — is usually provided in the form of low-interest loans from sources like the federal Rural Utilities Service (RUS), a division of the U.S. Department of Agriculture. RUS is still assisting many electric cooperatives all across the United States. After the operations and financing costs are paid, the excess revenues from electricity sales — called margins — go back to the members in the form of capital credits. There are no shareholders in other states or foreign countries that profit from the electric bills. It is you, our members, who receive the net revenues from electricity sales.

A cooperative organization is more than a business model; it is a way of life and a belief in serving others. We don’t just serve our towns and cities, we help make them better and make the lives of the citizens — our members — better. The Electric Cooperatives of Arkansas are proud to live and work alongside you and are privileged to have served you since 1937.

Sandra Byrd is vice president of public affairs and member services for Arkansas Electric Cooperative Corporation (AECC) and Arkansas Electric Cooperatives, Inc. (AECI).

 

 

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