The future of electricity could be a cooperative one:
- 1st Rochdale Cooperative Group NYC opened for business three years ago,
to help people in New York City reduce their energy bills. Today it's grown
to 20,000 members, offers lower electric rates than the city's main utility,
and has diversified into heating oil, solar power, and telecommunications.
- This summer the Chicago-based Center for Neighborhood Technology established
The Energy Cooperative to reduce electricity demand in targeted parts of Chicago.
- A member of the California Public Utilities Commission, trying to figure
out how to cope with deregulation-related power outages and soaring electric
rates, sent an invitation for a visit by Glenn English, CEO of the National
Rural Electric Cooperative Association.
These co-op solutions offer a more human, customer-service approach to success,
at a time when large power companies are merging to create even larger companies.
Co-ops could be an appealing alternative to traditional competitive approaches
that say "bigger is better."
Over the past few years we've written a lot in the pages of this magazine about
electric utility deregulation. Although our comments are highly critical of
the notion of restructuring the electric utility industry, we're not opposed
to higher levels of competition that would benefit consumers. In fact, Kentucky
electric cooperatives helped get the 1st Rochdale co-op started in New York.
Illinois electric co-ops helped launch The Energy Cooperative in Chicago.
Co-ops are competitive by nature. Since they are not-for-profit, all their energies
go into providing the best service and lowest cost for the members. Co-ops tend
to fill a need that even the most competitive for-profit companies don't want
to fight for. Electric cooperatives started 65 years ago because city utilities
didn't think they could make enough money stringing lines to people in the country.
Today co-ops continue to watch out for the customer, as the nation holds a debate
over electricity deregulation. Twenty-four states have restructured their electric
utility industries. Congress has held hearings on national legislation, and
Kentucky has a state task force studying the issue. In these deregulation debates,
co-ops are often the ones taking the lead in asking tough, but necessary, questions:
Are we absolutely sure rates will go down for everyone? How will reliability
be guaranteed? What about California's experience that saw electric rates triple
this summer? That's not opposition to deregulation. That's asking common-sense
questions. That's looking before leaping.
But multinational corporations buying each other up is not the only way for
competition to benefit consumers. The New York 1st Rochdale co-op thought there
was a better way to serve consumers, even though electricity in New York is
supplied by one of the largest utilities in the nation. The secret, says Allen
Thurgood, founder and CEO of 1st Rochdale, is "competitive rates and top-notch
service. We go to bat for the customer in a way that no other energy company
That's somebody eager to compete with anybody. It's a philosophy shared by electric
co-ops all across the country, including Kentucky. NRECA's Glenn English described
this cooperative tendency to focus all energies on the customer in a speech
last spring, when he said, "Our success will be measured - not in profits
- but in our ability to help the people we serve improve the quality of their
lives." Because of that, he said, "We will become more and more important
to this country as the years go by."
As the electric utility industry changes, cooperatives could well become more
and more important as the standard-setters for measuring the best combination
of price and service. From the small-town communities of Kentucky, to California,
New York, and Chicago, electric co-ops are showing how to keep the customer
the top priority.