Misinformation spreads rapidly aided by the internet and social media platforms. Disinformation spreads just as quickly and in the same manner. However, it is challenging to differentiate between honest mistakes and purposeful propaganda, and once published and gaining traction they are difficult to debunk.
If the 2023 legislative session has brought clarity to any issue, it is that the electric cooperative model continues to be misunderstood due to its complexities and the fact that this unique business model is not widely taught in schools. The “mis” or “dis” information saturating statewide discussions this session about electric utilities and rates requires clarification.
Before you read the rest of this column, I urge you to complete a quick survey using the link www.kec.coop/survey. It’s only six questions to get the pulse of our readers who receive electric service from a cooperative. Your input will help us learn your take on rates and reliability discussions happening across the state.
Now that you’ve completed the survey, let’s get down to the brass tacks concerning the current political environment in Kansas and the need for fact-based and honest discourse on electric issues.
It is a disservice and disingenuous to rural electric co-op consumer-members when co-ops are lumped in with all electric utility providers.
The cooperative model is centered on the user-owned, user-controlled, and user-benefited concept of business. Kansas Electric Cooperatives, Inc. serves 29 member co-ops that are guided by the 7 Cooperative Principles, not by the bottom line. They operate at cost, which is a key point of the cooperative business model. There is no profit motive built into an electric cooperative’s rates. Their rates are designed to recover the costs of providing electric service with a small margin that is required by their lenders or ensures business continuity.
Some refer to utilities as regulated monopolies, but electric co-ops — bound by the interests of ratepayers and not shareholders — are:
- Obligated providers required to serve every load in a designated territory regardless of the profitability of the consumer base.
- Generally serving in low population, high cost-to-serve areas.
- Restricted geographically to unilaterally grow into another’s territory.
- Vulnerable to service territory loss around cities; although there is compensation for a time period when that happens, the loss of territory and of future growth is permanent.
- Regulated by the consumer-members of the co-op under a not-for-profit, cost-of-service business model with the members/board of trustees setting the rates.
- Required to annually allocate excess margins back to co-op consumer-members (much different than shareholders).
In our most recent magazine readership survey, we learned that electric co-op consumer-members trust their electric co-ops and the information they provide each month in this magazine. Why would that be with the constant clamor of fake news and the proliferation of “mis” and “dis” information in public communications?
Two significant reasons come to mind. First, co-ops have personal, transparent relationships with their consumer-members. Co-op employees and board members are your friends, neighbors, and family — invested in the rural communities in which you all live and work. Second, every issue of this magazine offers ways for you to save on your energy bill, with co-ops providing information within their local pages throughout the year on various payment options while also offering resources for bill pay assistance. Your co-op has your best interest in mind in every business decision made; as the co-ops go, so goes the rural communities they serve.
All co-ops function under the ideals of honesty, openness, social responsibility and caring for others. But don’t take my word for it without doing your homework. Stop, reflect, verify.