The electric co-op history of innovation

History-of-InnovationDid you know one of the most cutting-edge places for technology is right up the road at your local electric cooperative?

That’s right. Innovation isn’t happening just in computer labs or on satellites rocketing into space. Electric co-ops lead even the highly technical electric utility industry in such fast-changing areas as renewable energy and installation of smart meters that allow the more efficient use of electricity.

While it may seem surprising to think of your electric co-op as a high-tech leader, it’s part of a way of doing business that has been finding new approaches to solving modern problems for nearly 100 years.

Making light out of darkness

In fact, electric co-ops were originally created to solve one of the most basic and complex of needs and desires—making light out of darkness.

That legacy still works today, and that’s why time is set aside each October to recognize National Co-op Month. It’s a reminder that businesses succeed not just through competition, but also through cooperation.

As a result of the member-owned cooperative form of business, co-ops stand out in many areas of the electric utility industry. They lead the way in community solar—an initiative in which the co-op utility builds a solar array that is supported by interested co-op members buying shares of the project. Electric vehicles are getting a boost from co-ops as well, with many placing charging stations in public parks and other rural locations.

And just as co-ops first brought electricity to unserved rural areas nearly a century ago, today many of them are working to bring high-speed internet service to their local communities.

In the early part of the last century, America’s cities were being transformed by this new thing called electricity. But outside the municipal boundaries, people could only look with envy at the glow from over the horizon. Setting poles and stringing power lines miles outside of town for one or two customers was deemed too expensive.

Luckily, go-getters in America’s rural communities believed they could solve the problems that kept the power companies from connecting them to modern society.

They called their friends and neighbors together and started forming their own utilities. They were community-based organizations, democratically-run, not-for-profit businesses called cooperatives. Today, there are more than 900 electric co-ops in the U.S. In Illinois, there are 25 distribution electric cooperatives and five generation and transmission cooperatives. 

It wasn’t easy, especially at first. They got a huge boost when, after getting the attention of some key politicians, the federal government created the Rural Electrification Administration (REA). The REA made loans available, helping finance expensive utility construction. It provided technical consulting, developing engineering techniques to carry electricity longer distances. The agency drew up model co-op bylaws and even went on the road with tent shows to demonstrate how to use the latest conveniences like electric ovens and washing machines.

A true grassroots movement

The biggest innovation is simply the co-op itself, and the notion of a utility with only one mission—to make life better for its members, who are also its customers.

Electric co-ops didn’t spring from a national directive or organization. They are truly homegrown products of what local people wanted for their community. Electric co-ops first started forming as early as 1914, and the formation of the REA in 1935 helped smooth the way forward. But it was local community initiative over the next three decades that finally brought electric service to nearly everyone.

The story of electric co-ops is of a true grassroots movement of unique, homegrown organizations. The one characteristic that applies to all of them is that they care for and listen to the local members they serve.

For electric co-ops, one size does not fit all—it’s the local community that’s in charge. In recognizing that every one of us is different, co-ops make both an electric connection, and a human connection.

And that’s a truly powerful innovation. 

It’s a matter of principles

Cooperatives around the world operate according to the same set of core principles and values, adopted by the International Co-operative Alliance. These principles are a key reason why America’s electric co-ops operate differently from other electric utilities, putting the needs of their consumer-members first. Here is a rundown of the seven cooperative principles.

Voluntary and open membership
Membership in a cooperative is open to all people who can reasonably use its services and stand willing to accept the responsibilities of membership, regardless of race, religion, gender or economic circumstances.

Democratic member control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Representatives (directors) are elected among members and are accountable to them. In primary cooperatives, members have equal voting rights (one member, one vote); cooperatives at other levels are organized in a democratic manner.

Members’ economic participation
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital remains the common property of the cooperative. Members allocate surpluses for any or all the following: developing the co-op, setting up reserves, benefiting members in proportion to their transactions with the co-op, and supporting other activities approved by the membership.

Autonomy and independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control as well as their unique identity.

Education, training and information
Education and training for members, elected representatives, CEOs and employees help them effectively contribute to the development of their co-ops. Communications about the nature and benefits of cooperatives, particularly with the general public and opinion leaders, help boost cooperative understanding.

Cooperation among cooperatives
By working together through local, national, regional and international structures, cooperatives improve services, bolster local economies and deal more effectively with social and community needs. 

Concern for community
Cooperatives work for the sustainable development of their communities through policies supported by the membership.