Manager’s Message: In October We Celebrate National Cooperative Month
Stearns Electric Association is joining with 30,000 other cooperatives nationwide in October to celebrate National Cooperative Month, which recognizes the many ways cooperatives help build stronger communities and a stronger economy.
THE COOPERATIVE MODEL
The biggest value of a cooperative is the people who make it – you, the members. Stearns Electric is owned by the people we serve. As I mentioned in my September manager’s message, cooperatives are member-owned and not-for-profit corporations. That is why those who receive electric service from us are called members, not customers. This model allows Stearns Electric to focus on member needs and not stockholder return on investment.
The cooperative business model originates from Rochdale, England where a group of weavers and other skilled workers formed a cooperative society in 1844. The principles they created define Cooperatives across the world that bring people together with the same needs to build solutions for the common good.
It’s part of our history. Stearns Electric was founded when neighbors worked together to bring electricity to rural Central Minnesota. Big investor-owned power companies thought they couldn’t generate enough profit so they bypassed rural areas. Back then, there were frequent meetings among neighbors to discuss the formation of the cooperative. Once established, annual meetings were the “must attend” event of the year. The co-op – on behalf of the member-owners – committed to provide the community with electricity.
Fast forward to today, Stearns Electric still operates in the best interest of our members. Since we don’t have to allow for profits to stock holders, all resources go to provide Stearns Electric member’s safe, reliable, competitively priced electricity.
RURAL ELECTRIC COOPERATIVES ARE DIFFERENT
Rural electric cooperatives are different than other energy providers in many ways. First and foremost is our not-for-profit status. Municipal utilities are owned by cities and serve about 50 residents per mile of electric distribution line. Investor owned utilities (IOU’s) are owned by stockholders and typically serve about 30 to 40 customers per mile of electric distribution line. At the same time, rural electric cooperatives average 4 to 5 members per mile of electric distribution line. Company revenue per mile of distribution for each entity is:
- Municipal – $110,000/mile of line
- IOU – $75,000
- Rural Electric Cooperative – $10,000
You can see why electric utility investors choose not to invest in rural areas. Financial returns are much better in urban and suburban areas. Rural electric cooperatives have to do more with less. And in some cases, much less.
Members have democratic control over their cooperative. As member-owners, you have the opportunity to actively participate in setting policies and making decisions. Each year at the Annual Business Meeting, members have the opportunity for their voice to be heard by voting on candidates for the Board of Directors.
Likewise, you have economic participation. As members, your monthly electric bill is more than just another bill. A portion of the bill is an equity contribution, which is used to finance capital projects and increase the Cooperative’s equity. To date, Stearns Electric has distributed over $28 million in Capital Credits back to our members.
Alongside democratic control and Capital Credits, a value that Stearns Electric is passionate about is concern for our communities. We work for the sustainable development of our communities. Whether simply connecting with you over our social media platforms or meeting you personally at a community event, we work hard to be a part
of the communities that we serve; communities that many of us call home. In addition to actively supporting community events, we give back through Operation Round Up.
These principles are a key reason that Stearns Electric, along with all of America’s electric cooperatives, operate differently from other electric utilities – because we put our members first.
COOPERATIVES VALUE MEMBER INPUT
Over the years, as we’ve listened to you and your fellow co-op member-owners, we know that we have
to keep pace as technology and consumer tastes evolve. As we look toward the future, you can be confident that Stearns Electric will commit to explore new ways to help our members and our community. Just recently the Cooperative received the results of the NRECA Member Survey conducted earlier this summer. Our team at Stearns Electric was pleased with results showing that members are overall very satisfied with the Cooperative. Beyond member satisfaction, this survey allowed us the opportunity to hear from our members directly regarding energy efficiency, communication preferences and the potential for future services. Our executive team and the board of directors will evaluate this information carefully as we enter strategic planning this winter. As always, we welcome your participation as we plan for the future.
September 15, 2023
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