Cooperative Principles

Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner. Each year North Central Electric members elect at least three fellow members to the cooperative's board of directors.

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. Since 1980, North Central Electric has annually refunded patronage capital credits to members and former members.

Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into 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. In Ohio, the electric cooperatives autonomy is recognized by the legislature. Because members elect their own board of directors to set rates and approve contracts, the Ohio electric cooperatives do not fall under the auspices of the Public Utilities Commission of Ohio (PUCO). The PUCO must approve the rates for Investor Owned Utilities like American Electric Power and FirstEnergy.

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, particularly young people and opinion leaders, about the nature and benefits of cooperation. North Central Electric's monthly Ohio Cooperative Living magazine is an important tool used to inform and educate members on the their cooperative.

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. At North Central Electric, a management and shared services cooperative - Federated Energy Services Cooperative - was formed in 1998 with Lorain-Medina Rural Electric Cooperative in Wellington, OH to share personnel and equipment. In essence, one management team oversees two electric cooperatives. In addition, North Central Electric is a member of Buckeye Power, the wholesale power supplier owned by the 25 Ohio electric cooperatives and the Ohio Rural Electric Cooperatives, the trade association for the 24 Ohio electric cooperatives.

While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members. Concern for Community was the exact reason North Central Electric established the Operation RoundUp program and formed the North Central Electric People Fund in 1998. More than 95 percent of North Central Electric residential members have their bills rounded up to the next dollar each month. The spare change is deposited into the People Fund and is distributed to organizations and members in need. A separate board of trustees reviews and approves People Fund grant requests.

Cooperative Principles

7 Cooperative Principles

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Voluntary and Open Membership

Democratic Member Control

Members’ Economic Participation

Autonomy and Independence

Education, Training, and Information

Cooperation Among Cooperatives

Concern for Community

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