Manager's Message
The Magnificent Seven
As we approach your cooperative's March 25 annual memebership meeting and, a few months on past that, our 65th anniversary on September 29, it's appropriate to reflect on the seven cooperative principles. As important as they are, we at Swisher Electric don't do a very good job of "tooting our own horn," so to speak, abou the seven cooperative principles and why they should have meaning to members.
1. Voluntary and Open Membership. Membership in an electric cooperative is voluntary and open. Anyone who chooses to purchase electric energy and service through the cooperative becomes a controlling member regardless of who they are, where they live, or how much electricity they use.
2. Democratic Member Control. As member-owners of an electric cooperative, the members control the cooperative by electing qualified members locally to serve on the cooperative's Board of Directors. The Board of Directors, acting as your elected representatives, control the cooperative by approving bylaws which govern the business structure. The Board is charged with the legal responsibility for governing the business on behalf of the member-owners and applicable state and federal laws and regulations.
3. Member Economic Participation. In an electric cooperative business, the member-owner’s patronage is an integral part of the business assets and financing. As a customer and member of an electric cooperative, members have an obligation to utilize the cooperative’s services. This obligation and the rates they pay for service help to finance the cost of building, maintaining and operating the utility.
Since the purpose of an electric cooperative is to provide service without generating excessive margins, the co-op sets rates that will enable it to pay all operating and financing expenses. Any net income remaining after these expenses is refunded to the members or credited to their accounts based on the amount of electricity they use in a given year. This net margin is called member equity.
Many of you recently got a first hand lesson in how capital credits refunds work. Jan Evans who heads our data processing department wants me to remind you to cash those capital credit checks, no matter how small they are. Jan points out that the state of Texas ends up with them if you don’t, and she says, “It’s a whole lot easier to get your money out of us than the state of Texas.” You have till February 16 for the checks to clear our bank before they become void (we gave you 120 days).
4. Autonomy and Independence. As a membership organization, an electric cooperative is a private business that is chartered under its respective state business statutes. The member-elected Board provides local leadership, sets business policies, approves operating budgets and rates charged for services, and directs the cooperative’s planning through a manager. The manager is hired by and reports to the Board. The manager supervises and coordinates the day-to-day business operations by managing Board-approved service work plans, people, capital and physical resources.
5. Education, Training, and Information As a member-controlled business, the bylaws require the Board and management report to the membership aobut the cooperative’s plans and operations. To carry out this responsibility, the cooperative uses several different methods to keep in touch with you, the members. These include meetings, surveys, mailings, newsletters and magazines, and annual reports that keep members abreast of issues concerning the operation of the co-op. Although cooperative business structure is older than this country itself, it is not commonly taught in formal educational institutions.
Therefore, directors and managers must constantly keep themselves updated on the latest developments in financing strategies, laws, regulations and technological changes that have an impact on the cooperative. Employees, who are truly among the cooperative’s most valuable assets, are well trained to work safely and are informed about new technology and member needs and wants.
6. Cooperation Among Cooperatives. Electric cooperatives represent the largest electric network in the United States, covering three-fourths of the nation and serving more than 31 million consumers. To supply their energy needs, many cooperatives have banded together to form generation and transmission cooperatives, such as Golden Spread Electric Cooperative, that produce or aggregate the purchase and delivery of electric energy from reliable sources, to ensure the co-ops, such as SEC, can meet the needs of you, our members.
Other national cooperative organizations, such as the National Rural Electric Cooperative Association (NRECA) and the National Rural Utilities Cooperative Finance Corporation (CFC), have been formed by the nation’s individual cooperatives. NRECA serves as an a dvocate for the cooperative way of doing business, while CFC helps finance the need to continually upgrade and our services to you, our members, to meet your growing needs.
Electric co-ops have also formed supply cooperatives to guarantee the best prices on supplies and equipment; statewide associations, such as Texas Electric Cooperatives (TEC), which provide a variety of services, from safety training to legislative activities; and other federations to provide co-ops with insurance and other services designed to meet a co-op’s distinct needs at reasonable prices. TEC also has its own pole plant and transformer facility to help serve your and our needs.
7. concern for Community. Electric cooperatives are local people helping local people. The directors represent local member-owners in the cooperative service area. The management and employees are locally based. Therefore, electric cooperatives have an inherent concern for their neighbors. Whatever affects the elecric cooperative member also affects the directors and employees who live next door.
That’s why three-fourths of America’s electric cooperatives are actively involved in some type of community development activities. Co-ops throughout the country provide services to their communities that range from installing Christmas lights around the courthouse of town square to donating money to volunteer fire departments.
For electric co-ops like SEC, one of the most important roles we fill is just being a good neighbor. We sponsor college scholarships for local students, sell electric appliances and water heaters at competitive prices, offer cellular phones and rate plans through another cooperatively-owned business, send young people on a week-long trip to Washington, D.C., to learn about their government and get a huge dose of patriotic spirit and pride in the process, and participate in a multitude of community activities.
Cooperative History and Principles
People have formed cooperatives primarily to provide a service or a benefit that was unavailable or unaffordable from other sources. For instance, electric cooperatives were established to provide electric service to primarily rural areas where investor-owned utilities were unwilling to serve, or where electricity was so highly priced most residents couldn’t afford it. By pooling their resources, cooperative members have been able to provide lower prices and more efficient and reliable services for themselves, or to offer services that were simply unavailable before.
Cooperative history in the United States dates back to 1620, when the signers of the Mayflower Compact agreed to cooperative in building schools, churches and homes in one of America’s earliest colonies. In 1752, Benjamin Franklin led the effort to develop mutual fire insurance in Philadelphia – the first formal cooperative agreement in the United States.
These seven principles are what sets cooperatives apart from other forms of business. We live them everyday, and we hope it shows in the services we provide for you.
Manager's Message
By Charles Castleberry