The Cooperative Difference:101



Buddy Hasten

One of my most recent surprises is how many people are unaware of “The Cooperative Difference” — the degree to which electric cooperatives are unlike other utility providers. Back in the 1940s, when for-profit companies were unwilling to bring electricity to rural Arkansas, electric cooperatives were formed. The term “electric cooperative” was synonymous with community teamwork, opportunity and change. Rural electric cooperatives have been serving their local communities for more than 80 years, but nowadays, many people simply see them as companies that send monthly bills, just like any other utility.

So, in iconic Paul Harvey fashion, here is the rest of the story. The fact is that rural electric cooperatives are member-owned, not-for-profit companies that serve members who live in areas with challenging terrain for building electricity infrastructure. In these areas, there are often only a few homes located per mile of line, known as low meter density, which increases costs to provide service. Cooperatives provide power to two-thirds of Arkansas’ landmass, including 74 of 75 counties and a third of the population. Cooperatives serve an average of seven consumers per mile of line, compared to investor-owned utilities that serve an average of 36 customers per mile of line. Publicly owned municipal utilities average 48 consumers per mile of line. When you think about the inherent cost disadvantage that rural electric cooperatives operate with, it is a testament to the cooperative business model that we can achieve rates at near parity with other electric providers in the state.

I have the honor and the privilege of working closely with the CEOs and board members of the 17 electric distribution cooperatives in Arkansas, and I see “The Cooperative Difference” every time I meet with them at their local offices. The old saying is, “If you have seen one electric cooperative, you have seen one electric cooperative,” in that they are all different. However, they also have a lot in common because they are all formed around the cooperative business model where members, not profits, come first. 

I first became aware that cooperatives do not tout their business model often enough when I went to North Carolina to visit my son, Nicholas, who was serving in the Army at Fort Bragg. My wife, Tracy, and I got the call that our first grandson had arrived, and we trekked from Missouri to North Carolina to welcome Logan to the Hasten family. We were visiting in Nicholas’ kitchen when I noticed their electric bill on the counter with the cooperative logo, aka “the green ball,” on the envelope. I commented to Nicholas that it was cool he was a member of the electric cooperative. Nicholas seemed confused by my statement, so I showed him the logo and explained that his electric company was a rural electric cooperative. Still no connection. To Nicholas, it was just the electric company, and it became clear to me that cooperatives don’t do enough to explain and promote “The Cooperative Difference” to their members.   

Arkansas’ rural electric cooperatives strive for affordable, reliable and responsible service to their members, and they excel at personal service. The ability to call or drive to your local electric cooperative office to get first-rate, in-person member service is another cooperative difference. Anyone who has called a major corporation and had to weave their way through a dozen voice-activated menus without ever getting to talk to a real person, or who has been routed to a call center halfway around the earth, should clearly understand this cooperative difference.           

Local leadership that serves members in the local community without the pressure of a profit margin is another cooperative difference. I worked for an investor-owned utility in Iowa after I retired from the Navy. It was a great company, full of wonderful people; however, it was also constrained by a business model that required the company to serve two masters — shareholders versus customers. The beauty of the cooperative model is that our shareholders are our customers — or, as we call them, members — and we are not a house divided. If we make a profit (called “margins”) on the electric service, we allocate all of those funds back to the members and return it in the form of patronage, which are those checks that you get from your cooperative.  

The cooperative business model is the closest thing I have found to serving in the military, with a community based on comradery and employees truly believing in the mission of the company. Everyone pulls together for a worthy cause for the greater good. This cooperative difference is why I choose to serve the cooperatives. So, if you see a white Ford F-150 driving down the road with a cooperative logo on the front license plate and a back bumper sticker that says, “I (heart) My Electric Co-op,” that will be me. Please honk or wave if you enjoy “The Cooperative Difference.”