What is an electric cooperative?
An electric cooperative is a not-for-profit, member owned utility service that provides service solely to its members. Although each cooperative may have a unique set of guidelines for day-to-day management, important decisions and policies must be approved by its membership. To have voting rights within a cooperative, members may have to live within an area for a number of years or have a significant energy demand.
A cooperative is financially independent, and its members pay the full cost of generation, transmission and distribution. Any profit is returned to its members in the form of rebates. There are currently 25 electric cooperatives serving more than 380,000 residents and small businesses in 77 of Ohio’s 88 counties. As they are controlled by their members, electric cooperatives are not regulated by the Public Utilities Commission of Ohio.
Two types of cooperatives
Generation and transmission cooperative
This cooperative is owned by multiple distribution cooperatives to furnish their own transmission lines and generation plants to supply power to their member cooperatives.
A not-for-profit customer owned electric company that purchases power at wholesale cost and distributes it to it’s customers.
Why cooperative members are ineligible for the customer choice program
Electric cooperatives are not regulated by the state, and were not required to restructure under Senate Bill 3 in 1999.
Why does the PUCO not regulate cooperatives?
The PUCO does not have jurisdiction over electric cooperatives and municipal electrics by the definitions of a “Public Utility” as defined in 4905.02 of the Ohio Revised Code, where it states that an electric company that operates its utility not for profit, or that is owned and operated by any municipal corporation are not included.
4905.02 Public utility defined.
(A) As used in this chapter, “public utility” includes every corporation, company, co-partnership, person, or association, the lessees, trustees, or receivers of the foregoing, defined in section 4905.03 of the Revised Code, including any public utility that operates its utility not for profit, except the following:
(1) An electric light company that operates its utility not for profit;
(2) A public utility, other than a telephone company, that is owned and operated exclusively by and solely for the utility’s customers, including any consumer or group of consumers purchasing, delivering, storing, or transporting, or seeking to purchase, deliver, store, or transport, natural gas exclusively by and solely for the consumer’s or consumers’ own intended use as the end user or end users and not for profit;
(3) A public utility that is owned or operated by any municipal corporation;