About Electric Cooperatives

So what is an electric cooperative anyway?

Electric cooperatives are not the same as an electric utility or public utility.  Investors own electric utilities and their focus is to make a profit for those investors.  With commercial utilities, only shareholders have any say in running the company. Electric utilities are regulated by  government agencies.  A public utility is a company that operates as a public-service corporation and is typically regulated by the national, state or local government.

The Seven Cooperative Principles

Cooperatives are very different. They are non-profit companies that operate under seven cooperative principles.  Learn more about the Seven Cooperative Principles.  Their focus is to provide electricity to the people they serve, their members, and not on profits.*  And who owns the cooperative?  You do!  That’s right, you own the cooperative!  If you purchase power from Powell Valley Electric Cooperative(PVEC), you are a member-owner! 

Powell Valley Electric Cooperative is member-owned, and its processes are transparent and open to the public. As a member, your membership fee, and your bills, reserve your place at the table. The electric service provided to you is your dividend. You, the membership, elect nine board members – three each year – as your representatives. They are your voice – and they should be accountable to you. The board members are by necessity Cooperative members too – they cannot be cooperative staff.  Therefore, they share your experience as a member, and should be sensitive to members’ concerns.

But the co-op doesn’t work if you don’t participate!  The co-op has a responsibility to you, and you have a responsibility as a member owner to tell them what you think and advocate for yourself and your community in the available and established channels.  See your rights and  responsibilities as a co-op member below.

All cooperatives have a set of bylaws, the “rules” of the organization.  Occasionally, bylaws need to be changed to reflect changes in the organization and/or membership.  At our cooperative, any member-owner by suggest a change to the bylaws, which is then voted on by the membership.  If you don’t have a copy of these bylaws, contact PVEC to ask for them or access them online

*Cooperatives don’t ignore the need to make a reasonable profit.  Profits, over and above the cost of providing service, is reserved as capital credits. The reserves are used to build and maintain the cooperative’s  equipment and facilities and to provide for other service needs. Each member is allotted an amount of capital credits based on how much electricity the member consumes. It is important to note that PVEC does not pay out it’s capital credits because of an agreement with the Tennessee Valley Authority.

History of electric cooperatives

Even though electricity was harnessed for human use in the early 1800s, many people didn’t have electricity at home for another hundred years.  Most electricity was held in corporate monopoly, which meant that in places where companies wouldn’t turn a profit – primarily rural areas – they simply didn’t offer service at all. Besides, they said, most farmers were too poor to pay for electricity. (Continues below.)

In the 1930s, nine out of ten rural Americans still lacked power, and many began to pressure the federal government to address the problem.  Finally, in 1933, President Franklin D. Roosevelt signed the Tennessee Valley Authority (TVA) Act into law – effectively guaranteeing electricity for all in its six-state service area, shown in the map below. The Tennessee Valley Authority, a public-private entity, became the region’s primary producer and seller of energy.  By 1939, the Rural Electric Administration (REA) had been created to oversee the process of rural electrification. The REA established 417 rural electric cooperatives, a move which was received with enthusiasm from farmers who, previously, would have been forced to pay power companies to run lines to their land. By the end of 1939, 25% of rural households had electricity; by 1953, that number rose to over 90%.

The REA allowed electric cooperatives to flourish in East Tennessee and Southwestern Virginia.  The Powell Electric Cooperative was founded in 1938; in 1939, an REA loan helped PVEC incorporate Wise, Scott, and Lee Counties.

There are now more than 800 electric cooperatives across the United States, serving more than 400 million Americans. Electric cooperatives serve one-third of Tennesseans, and provide much more than just electricity.  Some provide broadband, others have installed community solar power, others assist in energy financing.  Many of these things happen when communities speak up – because they have power as co-op members to push for change.