The term electric cooperative — or electric coop — may not be well known to city dwellers or those living in or near cities most of their lives. For those in rural America, which consists of many folks in Texas, electric coops are an integral part of life. Electric cooperatives supply electricity to many homes and businesses in rural areas across the United States.
What is an Electric Cooperative?
The majority of electric cooperatives are non-profit organizations that are owned and run by the same people that pay into them. Electric cooperatives are not interested in making a profit; they aim to provide reliable electricity to the community. In turn, this helps residents to have better access to power and encourages the development of many businesses.
Utilities vs. Electric Cooperatives
To help you better understand exactly what an electric cooperative is and does, it helps to compare these organizations against utilities. There are countless electric cooperatives and utilities in deregulated (and regulated) markets across the country.
Service vs. Profit: Electric cooperatives focus on providing reliable electricity service. The money that goes into the organization is put towards different needs, but no individual or group makes any kind of profit. One of the major reasons why utilities do not provide electricity service in rural areas is because there just aren’t enough people that require services to justify the extra cost.
Democratic Process vs. Board: Utilities have customers that purchase their electricity services. A board of directors, who make all the decisions for the company, is governed by a board of directors. Customers can file complaints, however they do not have any say in how the utility is run. Members of the community run electric cooperatives. These members all have a vote and say in the decisions that affect the organization.
Member-Owners vs. Customer: In many cases, in order to receive electricity in rural areas, you need to be a member of the electricity cooperative. This means that you have to pay into the cooperative to receive your electricity, but you also get to participate in the democratic process of running that cooperative. On the other hand, utilities have customers who pay to receive services. The involvement in the organization ends there.
History of Electric Cooperatives
In the early 1900’s, electricity was really only available to people living in major cities. People living in rural areas were forced to use lanterns, candles, and wood-burning stoves to see in the dark and cook their food.
It wasn’t until 1933 where this changed. This occurred when regulated authorities in Tennessee set up the Tennessee Valley Authority Act. This act helped to get electric transmission lines in only a few rural areas until 1935, when President Franklin D. Roosevelt established the Rural Electrification Administration (REA). This executive order allowed rural communities to form electric cooperatives.
Before these communities could get their electric cooperatives off the ground, they did require some additional funding. The REA provided loans to these rural areas to help them build the electric power systems needed to bring electricity into the communities. By 1935, around 90% of rural areas in the United States had access to electricity.
Electric Cooperatives in Texas
Electric cooperatives in Texas have very specific goals that they abide by in order to provide electricity to their members. Some of these goals include:
- During natural disasters, help other cooperatives with power recovery
- Provide funding for youth programs to promote electricity education within the community
- Provide help for electricity economic development and other community projects and initiatives
- Support schools, local government, fire departments and other community organizations that require electric services
- Offer education to the community regarding energy efficiency and energy savings
There are many electricity cooperatives in Texas. Some of these electric cooperatives include:
- HILCO Electric Cooperative
- Greenbelt Electric Cooperative
- CoServ Electric
- Bartlett Electric Cooperative
- Central Texas Electric Cooperative
- Brazos Electric Power Cooperative
- Fannin County Electric Cooperative
- Southwest Arkansas Electric Cooperative
- Concho Valley Electric Cooperative
- Bailey County Electric Cooperative Association
- Coleman County Electric Cooperative
- Cooke County Electric Cooperative
- Fort Belknap Electric Cooperative
- Farmers Electric Cooperative (Texas)
- Grayson-Collin Electric Cooperative
Many of these electric cooperatives in Texas have joined together to generate better opportunities for every community that requires electricity. This community of electric cooperatives is known as the Texas Electric Cooperatives (TEC).
Texas Electric Cooperatives (TEC)
Founded in 1941, TEC’s mission was to gain a better position to bargain with power suppliers in Texas. With its headquarters in Austin, Texas, the organization currently includes, 11 generation and transmission and 64 distribution cooperatives.
Over the course of its existence, TEC has developed 7 guiding principals that help govern all electric cooperatives throughout the state. These principals include:
- Concern for Community
- Autonomy and Independence
- Democratic Member Control
- Voluntary and Open Membership
- Education, Training and Information
- Cooperation amongst Cooperatives
- Members’ Economic Participation
Since there are so many electric cooperatives in rural areas of Texas, these organizations also help to provide employment opportunities within the community.
Electric Cooperative – Business Growth Opportunities
Businesses, organizations and individuals who provide services and products to electric cooperative members have the opportunity to become involved in the electric cooperative. As a result, these businesses receive support from the electric cooperative and rural community. Joining this program gives businesses:
- Ability to go to TEC related conferences and meetings
- Exhibition privileges at TEC related conferences and meetings
- Member recognition at TEC conferences and meetings
- Access to TEC training opportunities and other member discounts
To apply to be a business member, you need to fill in an application form. This form is available on the TEC website.
Electric Cooperatives and Energy Deregulation
Texas is one of the many states that benefit from energy deregulation. Energy deregulation requires utilities to share supply related services with organizations known as, energy providers. Energy providers sell supply related products and services to consumers in many different business sectors. The benefits to opening up consumer choice and allowing customer to choose their electricity provider is that there is more competition. When there is more competition, rates often drop in order to prevent customers from looking elsewhere for electricity.
In Texas, electric cooperatives have the option to choose whether or not they allow their members to have access to energy providers. If your electric cooperative decides on this option, you will receive information via your electricity bill.
According to the Public Utility Commission of Texas, it is possible to write to your cooperative’s board of directors to get customer choice options. In addition, the decision to become energy deregulated can be revoked should no members of the cooperative choose an alternative supplier within 4 years of the official decision.