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Co-ops: We Come In All Shapes And Sizes

by / Wednesday, 21 February 2018 / Published in News

By Abby Berry, National Rural Electric Cooperative Association and Amy Murphy, AVEC

What is a co-op, exactly?

When you hear the word “co-op,” what comes to mind? We hope you think of your friends here at Alaska Village Electric Cooperative (AVEC), but maybe you think of a credit union.

You might be surprised to learn that co-ops, or cooperatives, can be found in many industries—and they offer a variety of services, each designed to serve their members in the best way possible.

A cooperative is a not-for-profit organization owned by its members. Across the globe, cooperatives remain steadfast, annually generating more than $500 billion in revenue and providing more than two million jobs.

AVEC is a not-for-profit electric utility established under the Rural Electrification Act of 1935, part of President Franklin Delano Roosevelt’s New Deal which was intended to put Americans to work building lines to serve rural communities that were not connected to electricity. AVEC was established in 1967 to bring electricity to village Alaska, very few of which had electric service in the 1960s. We energized our first communities in 1968.

Electric cooperatives were created to provide at-cost electric service. Unlike investor-owned utilities, cooperative members can earn capital credits. Each year that AVEC earns a margin (revenue collected that is not needed to cover the cost of providing service), it is assigned to members in proportion to the amount they were billed for electricity during that year. These funds, called capital credits, are retained by the co-op as a source of working capital for approximately 17 years and are refunded at the discretion of the Board.

As a member of AVEC, you also have a voice – in other words, you’re not just a customer. Every year delegates you elect at the local level represent your community at AVEC’s annual meeting. And each spring every member has the right to vote for the cooperative’s board of directors. We also encourage you to contact AVEC with questions or suggestions year-round.

Local Support

AVEC strengthens our communities by supporting economic development and upgrading infrastructure to improve generating efficiency and keep electric rates as low as possible. As our service area grows, our distribution system grows, which makes it easy to see why strengthening the local economy makes sound business sense.

We are involved in various local projects, such as hiring locals to work on our construction projects; working with local entities to apply for grants for various energy-related projects, like new LED streetlights and stainless steel meter bases; providing scholarships so students can pursue higher education to develop skills and careers they may be able to engage in locally or regionally; and providing donations for numerous events like spring cleanups and various festivals.

Co-ops offer a variety of services

So what other kinds of co-ops are out there? Co-ops fall under a variety of categories and services, including agriculture and forestry; consumer and retail; banking and credit unions; health and wellness; and utilities, to name a few.

Here are a few other national co-ops you might recognize.

 

  • REI: What began as a group of 23 mountain climbing buddies is now the nation’s largest consumer cooperative, specializing in quality outdoor gear.
  • Sunkist: This not-for-profit company’s membership is comprised of numerous growers located throughout California and Arizona.
  • Best Western: Owned by independent operators of more than 4,000 hotels in 80 countries, Best Western is one of the world’s largest hotel chains.

 

The list of cooperatives goes on and on, and as you can see, we come in all shapes and sizes. At AVEC, our mission is to provide you with safe, reliable, and affordable electricity.

For more information about the services we offer, visit our Website (www. avec.org) or our Facebook page, or call us toll-free at 1-800-478-1818.

 

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