"What is a Cooperative?"
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Simply put, a cooperative is a Electric cooperatives were originally formed to bring electricity to rural households. Investor-owned utilities were not interested in serving these households because there was little profit in doing so. |
See the above video and MJM's Our History page for more details on the history of electricity co-ops. |
Who is a member?
Anyone who pays a $5 membership fee, a $150 meter deposit and receives electrical service from MJM Electric is a member of the cooperative. Each member owns a little piece of the utility. Since MJM is a non-profit company, members don’t make money off its services but do have a say in how the cooperative operates.
All members are invited to attend the cooperative’s annual meeting. The state of the cooperative will be discussed at this meeting, and members can directly affect the operation of the cooperative by voting for directors on a one-member-one-vote basis.
What are the cooperative principles?
MJM is committed to seven principles that guide its operation.
1) Voluntary and Open Membership: Cooperatives are voluntary organizations, open to all people able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2) Democratic Member Control: Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Men and women serving as elected representatives are accountable to the membership.
3) Member Economic Participation: Members contribute equitably to, and democratically control, the capital of their cooperative. In MJM’s case, all members pay for electricity and have a say in how MJM spends its money through their directors.
4) Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members. If they enter to agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
5) Education, Training and Information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public about the nature and benefits of cooperation.
6) Cooperation among Cooperatives: Cooperatives serve their members by working together through local, national, regional and international structures.
7) Concern for Community: Cooperatives work for the development of their communities through policies approved by their members. (See page: Community Outreach)
Does MJM generate electricity?
No. MJM is a distribution cooperative. It constructs and maintains the power lines and substations necessary to deliver power to their rural members but does not generate that power. MJM purchases its power wholesale from Wabash Valley Power Association in Indianapolis, Ind. Wabash Valley is a generation and transmission cooperative and transmits electricity to 28 cooperatives like MJM across Illinois, Indiana, Michigan, and Missouri.
If a cooperative is not-for-profit, why do rates increase?
A cooperative does not aim to turn a large profit but to provide its members with quality service. The cost of doing that job, like most things, rises every year. The price of copper wire, transformers, poles, and other materials has increased over the years.
In addition, the rising cost of oil and other fossil fuels means the cost of purchasing power also increases. Because of these factors, it is sometimes necessary for a cooperative to raise rates in order to maintain the funds necessary for daily operations.
Video by the National Rural Electric Cooperative Association
Illustration by Master Isolated Images / FreeDigitalPhotos.net
