I CAN FLY

Tiêu đề: I CAN FLY Thu Oct 15, 2009 9:59 pm

RURAL
ELECTRIFICATION IN MISSISSIPPI
In 1935, less than one percent
of Mississippi’s farms and rural residents had electric power.
Today, the situation is reversed. Virtually all rural homes and farms
have electric service due to the creation of Mississippi’s 25
electric power associations (rural electric cooperatives) which
distributes electric service and one generation and transmission
cooperative which distributes wholesale power to 11 electric power
associations. How this came about is a fascinating story of
cooperation among neighbors.

Urban
areas were beginning to recover from the Great Depression, thanks in
large part to the availability of electricity. In the sparsely
populated countryside, people were enjoying life but not the
amenities that only electricity could provide. Private investors
weren’t interested in financing electrical delivery systems where
profit could not be realized. Rural people of the 30s who wanted to
"tie on" to the electric service provided in the towns
found that paying the cost of providing service was far too high. At
that time, it cost almost $2,000 to build a mile of line, and the
average annual income of the farm family was much less than that
amount.

Even
by joining together, rural people could not afford to provide
themselves with electric power. And even if they could, there were
many who didn’t think farm families could afford electric rates, or
that electricity would be very useful to the farmer.

Fortunately
for the rural people of Mississippi, and the history of our economic
progress, those who could not see the advantages of rural
electrification were to be proved very, very wrong. Putting their
faith in a long tradition of independent self-reliance, the people of
rural Mississippi decided to do the job themselves. It was a true
grassroots movement.

Since
the first colonists came to this country, rural people have had a
strong belief in cooperation. In the early years of this century,
cooperatives were formed --- organizations through which cooperative
members would collectively buy a box car of fertilizer, for example.
In this way, each member of the co-op could save money on the amount
of fertilizer he needed, since it was (and still is) more economical
to buy large quantities of a material than to place many individual
small orders. All co-op members enjoyed the savings made possible by
joint purchasing, and co-ops of several types are still a prominent
feature of Mississippi’s economy.

It
was only natural that the co-op idea be considered for providing
electric service. But the huge investment required to build an
electrical system was beyond the reach of almost every rural person
as cash was hard to come by. But it was also a time of many new
programs on the part of the government, programs designed to help
people get back to work and recover from the great economic hardships
that spread across our land. These programs, largely developed under
President Franklin D. Roosevelt, were designed to "prime the
pump" of our economy and get more money into the hands of the
people, in the country and city. President Roosevelt saw the
advantages of electrifying rural areas, and he realized the need for
some form of governmental action to reach this goal.

President
Roosevelt created the Rural Electrification Administration (now
called Rural Utilities Services) by executive order on May 11, 1935.
Later, he made the REA a lending agency to help provide electric
service to rural areas. This meant that rural people could unite to
borrow money to build electric systems for themselves and pay the
government loan back, with interest, as their systems generated
income.

In
September 1935, Monroe County Electric Power Association of Amory
became the first electric power association in Mississippi to secure
an REA loan and begin operations. Previously, in 1934, Alcorn County
Electric Power Association had been organized to distribute
electricity purchased from the Tennessee Valley Authority.

The
Rural Electrification Administration was established strictly as a
lending agency to make loans to existing electric utilities, electric
power associations, or other qualified organizations to build
facilities for furnishing electric power to rural areas, just as a
bank is a lending agency in financing the building of homes through
loans guaranteed by the Federal Housing Administration. Since funds
borrowed through REA would be paid back, the government could achieve
a great deal of progress at little expense to the taxpayer. Over the
years, 25 electric power associations would be formed in Mississippi,
a state that has a large rural population. These organizations are
incorporated, chartered, and conduct business under authority of laws
passed by the Mississippi Legislature.

WHAT
IS AN ELECTRIC POWER ASSOCIATION?
What is an electric power
association, who owns it, and how does it work?

Very
simply, an electric power association or cooperative is a private,
not-for-profit organization, locally owned and managed and
incorporated under state law, providing electricity to its
member/owners at the least possible cost. There are two important
things to remember about an electric power association:

It
is actually owned by the members it serves, and each member has one
vote in the affairs of the association, regardless of the amount of
electricity he or she uses.

This
is the difference between an electric power association and an
investor-owned utility, which is organized for profit, and owned and
controlled by its stockholders.

An
electric power association is a democratic organization. It conducts
annual membership meetings, at which the member/owners --- the
consumers it serves --- elect a board of directors from among their
membership. The directors elect their own officers and employ a
manager to run the daily operations of the association. Thus,
employees are responsible to the manager, the manager is responsible
to the board, and the board is responsible to the membership at
large. As you can see, the customers of an electric power association
--- the member/owners --- have the final say in the operation of the
association.

A
SUCCESS STORY
Almost 50 years ago, many people predicted that
electric power associations had no future at all....those who said
that rural people could not afford electricity, and could not find it
very useful even if they had it. Obviously, the rural electric
cooperative concept was much stronger than these gloomy voices of
despair.

Much
of the progress, economic and social, that has come about in rural
Mississippi can be traced almost directly to the creation of electric
power associations. And that progress continues. Each electric power
association is an inspiring example of neighbors working with
neighbors to make the quality of life better for the entire
community. And for us, improving community life means going beyond
our primary responsibility to provide dependable electric services at
competitive prices.

For
more than 60 years, Mississippi’s electric power associations have
played a vital role in the growth and development of our great state.
But our work is not done. We are making plans for tomorrow’s
electricity demand today, in order to ensure a dependable supply for
the future.

While
we do not generate or distribute power, we do operate as an
organization that represents the people who do, the 25 distribution
cooperatives and the one generation and transmission cooperative.
While our primary function is providing services to our member
associations, we firmly believe our most important role is
representing the more than 1.6 million Mississippians we serve. We
are committed to each one to ensure they are provided quality and
reliable electric service at the least possible cost. It is with this
commitment that we join forces with each organization in doing
collectively what cannot be accomplished individually. We will
continue to demonstrate our unwavering commitment to common goals to
ensure that all Mississippians continue to enjoy the benefits offered
by electric power. Because our future --- like yours --- lies here
--- in the heart of Mississippi.

Mississippi
has 25 electric power associations that deliver electricity to more
than 731,000 meters (more than 632,000 residential meters) and one
generation and transmission cooperative (South
Mississippi Electric Power Association, Hattiesburg) which
distributes wholesale power to 11 electric power associations.

These
electric power associations energize a total of 90,846 miles of
lines. The average number of consumers served per mile of line is
8.05, compared to the national average of 32 for investor-

owned
utilities and 41 for municipal-operated systems.

Electric
power associations serve 50% of the electric meters in Mississippi,
investor owned 40%, municipal systems - 10%

The
plant investment for, before depreciation, of all electric power
associations is more than $2.75 billion.

The
plant investment for generation and transmission is $1 billion.

The
plant investment per mile of distribution line is $23,200.

Electric
power associations employ 2,776 Mississippians with a total annual
payroll of $96 million with a total of more than $26.5 million paid
in taxes by all the electric power associations.

The
total debt of the electric power associations is $1.85 billion.

Where
does a consumer's dollar go when buying electricity from a rural
electric cooperative?

ELECTRIC
UTILITY RESTRUCTURING
There are 25 distribution EPAs and one
generation and transmission electric power association in
Mississippi. These associations are member owned and provide reliable
and quality electric service to their members on a not-for-profit
basis.

Mississippi's
current system of utility regulation has served our members well and
should not be restructured unless it can be shown that the proposed
restructuring will be in the long term best interests of our members.
Among the key issues that will need to be addressed are the
following:

All
classes of consumers should be treated equitably.
Electric
industry restructuring should be done in a way that benefits all
customer classes fairly and does not unduly disadvantage any customer
class.

All
consumers should have access to electric service.
Electric
service is vital for health, safety and economic opportunity;
universal service is a cornerstone of public interest.

Safety
and reliability must not be jeopardized.
Market-based
decisions, driven by economics and competition alone, could
jeopardize critical safety and reliability and long-term strategic
resource and facilities planning.

Aggregation:
Forming a group of consumers who together can bargain for the lowest
possible electric rates.

Aggregator:
An entity that puts together customers into a buying group for the
purchase of electricity.

Ancillary
Services: Those services other than scheduled energy, which are
required to maintain system reliability and meet the North American
Electric Reliability Council (NERC) operating criteria. Such services
include spinning, non-spinning, and replacement reserves, regulation,
voltage control and black start capability.

Bilateral
Contract: A contract between an ESP and an end-user. This
Contract is a type of market mechanism in which ESPs and end-users
enter into contracts explicitly stating price and conditions for the
physical dispatch of power, and paying intermediate transmission and
distribution providers for the delivery service. The contract may or
may not be through a retailer and may or may not involve aggregation.

Broker:
An entity that acts as an agent or intermediary in the sale and
purchase of electricity but that does not take title to electricity.
The broker may also aggregate customers and arrange for transmission
and other ancillary services as needed.

Company:
The electric utility affiliate or affiliates responsible for the
wires services.

Cost
of Service Analysis/Study: The model used by a utility to
determine how costs should be allocated among different customers.
Also used to establish the relative magnitude of the costs associated
with each element of an unbundled charge.

Day
of Flow: The day upon which energy deliveries will be made and
measured for a 24 hour period beginning at one o'clock a.m. (1:00
a.m.) Central Prevailing Time.

Direct
Access: Retail, bilateral contracts between sellers and buyers.

Distribution
Services: The regulated electric utility function of taking
delivery of energy from the transmission grid and distributing it to
the End-Use Consumer. This function consists of the distribution
wires services and the customer services functions of meter reading,
billing, accounting, and collection.

Divestiture:
The stripping off of one utility function from the others by selling
(spinning off) or in some other way changing the ownership of the
assets related to that function. Most commonly associated with
spinning off generation assets so they are no longer owned by the
shareholders that own the transmission and distribution assets.

Divest:
The legal transfer of ownership and control to an entity that is not
an affiliated interest.

End-Use
Consumer: A customer in the electric industry who buys electric
power to be consumed as a final product (not for resale) for
consumption within their physical location. It may include
residential, commercial, agricultural, and industrial load.

Energy
Service: The provision of energy by an ESP to an End-Use
Consumer.

Energy
Service Provider (ESP): An entity certified by the Commission as
an approved supplier of electric generation services. An ESP may be
an electric generator, broker, marketer, or aggregator. ESPs are
further classified as "Scheduling ESPs" and "Non-Scheduling
ESPs" where scheduling refers to electric load scheduling.

Enrollment
Notice: Notification provided by an ESP to the Company that an
End-Use Consumer has selected said ESP for purposes of receiving
Energy Service.

Market
Power: Market power means the ability of a seller, or group of
sellers, to influence price for a significant period of time.

Marketer:
An entity that, as an intermediary, purchases electricity and
takes title to electricity for sale to retail customers.

Power
Delivery Service (PDS): The provision of the wires services by
the Company for an ESP under an approved tariff.

Service
Agreement: A contract for service between the Company and an ESP.

System
Operator: The entity responsible for the operation of the
transmission grid within a control area. The control area is an
electrical region which regulates its generation in order to balance
load and maintain planned interchange schedules with other control
areas and assists in controlling the frequency of the interconnected
systems. The System Operator dispatches generation output to balance
with actual load to meet reliability criteria established by the
NERC.

Transmission
Services: The wires services and associated ancillary services
necessary for receiving energy from an ESP and reliably transporting
it for distribution.

Unbundling:
Separating the single bundled rate charged to the End-Use
Consumer into its individual parts of generation, transmission, and
distribution, and identifying the costs of each.

Wires
Services: All electric utility functions except the generation
(energy production) function. Typically refers to the transmission
and distribution services necessary for the transporting and delivery
of electric energy to the End-Use Consumer.

Economic
Development

The
Economic Development Department seeks to improve the economy of areas
served by electric power associations while gaining the attention of
members, public officials and the general public. Primary activities
include attracting new businesses and industries to Mississippi while
assisting present operations in expansion activities. Each year,
staff members assist in the location and expansion of many
operations, which result in hundreds of job opportunities for our
members and a quality of life second to none.

Our
member associations have provided the needed infrastructure of
affordable and reliable electric service which is imperative in
attracting and maintaining business, industry and other developments
in the areas they serve.

The
economic development activities of Mississippi's electric power
associations are an extension of the programâs original goal to
ensure that all residents have equal opportunity to a good quality of
life regardless of where they choose to live. Today, thousands of
people travel to jobs created by the economic development efforts of
our associations. In fact, most jobs would not even exist without a
reliable source of electricity.

While
we have enjoyed tremendous success in economic developmment, we still
work diligently to search the nation for enterprises looking for a
strong work force and an ideal location. We are committed to
promoting Mississippi's great resources and are proud of the role we
play in the economic development of our great state.

The
Government Relations Department monitors legislation on the state and
national level in addition to working closely with the Mississippi
Public Service Commission. This responsibility is important to our
member associations and the millions of Mississippians who receive
electric service from electric power associations. The electric
utility industry has many ties to legislation and regulations,
therefore it is imperative that we keep a close relationship with
lawmakers and government officials. Through the efforts of our staff
and the assistance of member associations we have been successful in
saving our membership millions of dollars. Ultimately these savings
are passed on to our member/owners.

Over
the years, we have earned and fostered a good relationship with
elected officials. This unique relationship is important as we work
with lawmakers to ensure our consumers' interests are considered. We
monitor daily activities of Mississippi's three branches of
government: executive, legislative and judicial. This is important
because over 4,000 bills are introduced each year during the
Mississippi Legislative Session. Of these bills, hundreds are
targeted at areas that affect the electric utility industry.

Our
most important role is representing the member/owners of
Mississippi's 26 electric power associations. We are committed in a
cooperative manner to insuring each member is provided quality
service at the least cost possible. It is with this commitment that
we join forces with each organization in doing collectively what
cannot be accomplished individually.

The
Government Relations Department has and will continue to demonstrate
its unwavering commitment to common goals and help ensure a brighter
future for rural electrification in Mississippi.

Although
nearly 90 percent of urban dwellers had electricity by the 1930s,
only ten percent of rural dwellers did. Private utility companies,
who supplied electric power to most of the nation's consumers, argued
that it was too expensive to string electric lines to isolated rural
farmsteads. Anyway, they said, most farmers, were too poor to be able
to afford electricity.

The
Roosevelt Administration believed that if private enterprise could
not supply electric power to the people, then it was the duty of the
government to do so. Most of the court cases involving TVA during the
1930s concerned the government's involvement in the public utilities
industry.

In
1935 the Rural Electric Administration (REA) was created to bring
electricity to rural areas like the Tennessee Valley. In his 1935
article "Electrifying
the Countryside," Morris
Cooke, the head of the REA, stated that

In
addition to paying for the energy he used, the farmer was expected to
advance to the power company most or all of the costs of
construction. Since utility company ideas as to what constituted
sound rural lines have been rather fancy, such costs were prohibitive
for most farmers. [ footnote]

Many
groups opposed the federal government's involvement in developing and
distributing electric power, especially utility companies, who
believed that the government was unfairly competing with private
enterprise (See the Statement
of John Battle ). Some members of Congress who didn't think the
government should interfere with the economy, believed that TVA was a
dangerous program that would bring the nation a step closer to
socialism. Other people thought that farmers simply did not have the
skills needed to manage local electric companies.

By
1939 the REA had helped to establish 417 rural electric cooperatives,
which served 288,000 households. The actions of the REA encouraged
private utilities to electrify the countryside as well. By 1939 rural
households with electricity had risen to 25 percent. The enthusiasm
that greeted the introduction of electric power can be seen in the
remarks of Rose
Scearce.

When
farmers did receive electric power their purchase of electric
appliances helped to increase sales for local merchants. Farmers
required more energy than city dwellers, which helped to offset the
extra cost involved in bringing power lines to the country.

TVA
set up the Electric Home and Farm Authority to help farmers purchase
major electric appliances. The EHFA made arrangements with appliance
makers to supply electric ranges, refrigerators and water heaters at
reasonable prices. These appliances were sold at local power
companies and electric cooperatives. A farmer could purchase
appliances here with loans offered by the EHFA, who offered low-cost
financing.

Rural
electrification was based on the belief that affordable electricity
would improve the standard of living and the economic competitiveness
of the family farm. But electric power alone was not enough to stop
the transformation of America's farm communities. Rural
electrification did not halt the continuing migration of rural people
from the country to the city. Nor did it stop the decline in the
total number of family farms.

Rural
electrification
is the process of bringing electrical
power to rural
and remote areas. Electricity is used not only for lighting and
household purposes, but it also allows for mechanization of many
farming operations, such as threshing, milking, and hoisting grain
for storage; in areas facing labor shortages, this allows for greater
productivity at reduced cost. The most famous[citation
needed]
such program was the New
Deal's Rural
Electrification Administration in the United States, which
pioneered many of the themes still practiced in other countries

Depending
on the source, rural electrification (and electricity in general) can
bring problems as well as solutions. New power plants may be built,
or existing plant's generation capacity increased to meet the demands
of the new [rural] electrical users. A government may be inclined to
use the cheapest generation source, which might be the most
polluting, and locate the power plant next vulnerable minorities or
rural areas.

Many
farmers, cooperatives and independent organisations contest that the
Rural Utility Service, which is responsible for providing loans and
subsidies for electric utilities who build in rural areas is outdated
and is inhibiting free-market competition. Over 99% of rural farms
have access to electricity, but many may benefit more from utility
competition and renewables[

United
States

In
1892, Guy Beardslee, the original owner of Beardslee
Castle, was paid $40,000 to provide hydroelectric power to East
Creek in New York.

Despite
widespread electricity in cities, by the 1920's electricity was not
delivered by power companies to rural areas because of the general
belief that the infrastructure costs would not be recouped. In
sparsely-populated farmland, there were far fewer houses per mile of
installed electric lines. A Minnesota
state committee was organized to carry out a study of the costs and
benefits of rural electrification. [2]
The University
of Minnesota Department
of Biosystems and Agricultural Engineering, working jointly with
NSP (now Xcel
Energy), conducted an experiment, providing electricity to nine
farms in the Red Wing
area. Electricity was first delivered on December
24, 1923.[3]
The "Red
Wing Project" was successful- the power company and the
University concluded that rural electrification was economically
feasible. The results of the report were influential in the National
government's decision to support rural electrification.

Before
1936, a small but growing number of farms installed small
wind-electric plants. These generally used a 40V DC
generator to charge batteries in the barn or the basement of the
farmhouse. This was enough to provide lighting, washing machines and
some limited well-pumping or refrigeration. Wind-electric plants were
used mostly on the great plains, which have usable winds on most
days.

Of
the 6.3 million farms in the United States in January 1925, only 3.2
million were receiving centralized electric services.[3]
The Rural Electrification Administration (REA) was created by
executive order as an independent federal bureau in 1935, authorized
by the United
States Congress in the 1936 Rural
Electrification Act, and later in 1939, reorganized as a division
of the U.S. Dept. of Agriculture. It was charged with administering
loan programs for electrification and telephone service in rural
areas. Between 1935 and 1939 – or the first 4 ½ years after REA's
establishment, the number of farms using electric services more than
doubled.[3]

The
REA undertook to provide farms with inexpensive electric lighting and
power. To implement those goals the administration made long-term,
self-liquidating loans to state and local governments, to farmers'
cooperatives, and to nonprofit organizations; no loans were made
directly to consumers. In 1949 the REA was authorized to make loans
for telephone improvements; in 1988, REA was permitted to give
interest-free loans for job creation and rural electric systems. By
the early 1970s about 98% of all farms in the United States had
electric service, a demonstration of REA's success. The
administration was abolished in 1994 and its functions assumed by the
Rural
Utilities Service. Also, the Tennessee
Valley Authority is an agency involved in rural electrification.

OBJECTIVES

A.
To establish the policy governing the ethical standards and business
practices to be

demonstrated
by the Trustees, Management, and Employees of the Cooperative in

their
dealings with each other, the members, suppliers, government bodies,
and the

general
public.

B.
To foster an awareness that the Trustees, Management, and Employees
are

representatives
of the Cooperative and that they should conduct themselves with

integrity
and in a professional manner which fosters confidence and reflects
positively

on
the Cooperative, its Members, Board of Trustees, Management, and
Employees

POLICY

The
Board of Trustees recognizes, establishes, and maintains the
following

guidelines
pertaining to the Ethical Standards and Business Practices of the
Cooperative, its

Trustees,
Management, and Employees:

A.
One of the Cooperative’s most valuable assets is its reputation for
integrity. We

intend
to hold to a single high standard of integrity everywhere.

B.
Our commitment to integrity means that we will well exceed the
minimum

requirements
of the law and industry standards.

C.
The ethical performance of the Cooperative is the sum total of the
ethical

performance
of our individual trustees and employees.

D.
We will avoid the intent and appearance of unethical or compromising
practice in

relationships,
actions, and communications.

E.
We will avoid actions and circumstances that may appear to compromise
good

business
judgment or create a conflict between personal and company interests,
or

job
related responsibilities.

F.
We will keep our word. We won’t promise more than we can reasonably
expect to

deliver;
nor will we make commitments we don’t intend to keep.

G.
In our advertising and other public communications, we will avoid not
only untruths,

but
also exaggeration and overstatement.

H.
We respect the rights of members. The only competitive advantages we
seek are

those
gained through superior research, engineering, marketing, and meeting
the

needs
of our members. We do not engage in unfair or illegal trade
practices.

The
Cooperative is confident that its suppliers desire to operate in an
environment

that
is free from influence due to unethical business practices.
Therefore, the

Cooperative’s
suppliers are requested to conduct business in a manner that would

not,
in any way, compromise the ethical principals of the Cooperative’s
procurement

and
materials personnel.

J.
We will refrain from accepting money, gifts of other than nominal
value (nominal

value
to be any amount up to $200.00 per year), excessive hospitality,
loans, or other

special
treatment from present or potential suppliers that might influence,
or appear

to
influence purchasing decisions.

K.
We will not pay to or receive from any suppliers, members, or others
any bribes,

kickbacks,
or other similar payoffs.

L.
The Cooperative will keep books and accounting records that
accurately reflect all of

its
transactions, the dispositions of its assets, and the recognition of
its obligations.

M.
The Cooperative will maintain a system of internal accounting
controls that will

ensure
the reliability and adequacy of its books and records.

N.
No confidential or proprietary information about the Cooperative or
its members will

be
disclosed to others without proper authorization, nor should any one
employee

disclose
such information to others except on a need to know basis.

O.
The following is an excellent basic guiding statement when deciding
whether an

action
is an ethical business practice:

RESPONSIBILITY

A.
The Board of Trustees is responsible for the approval and periodic
review of this

policy.

B.
The FESCO President and General Manager is responsible for the
administration of

this
policy and for recommending to the Board of Trustees any changes or
additions

to
this policy.

C.
The Cooperative’s Board of Trustees, Management, and Employees have
the

responsibility
to carry out the letter and spirit of this policy.

D.
The FESCO President and General Manager, Attorney, and Auditor are
responsible

to
thoroughly and confidentially investigate any concerns reported to
them under this

policy
and to take appropriate action as necessary.

A
cooperative is a business. In many ways it's like any other business;
but in several important ways it's unique and different. A
cooperative business belongs to the people who use it – people who
have organized to provide themselves with the goods and services they
need.

These member-owners share equally in the control of
their cooperative – they meet at regular intervals, hear detailed
reports and elect directors from among themselves. The directors in
turn hire management to manage the day-to-day affairs of the
cooperative in a way that services the members' interests.

Members
invest in shares in the business to provide capital for a strong and
efficient operation. All net savings (profits) left after bills are
paid and money is set aside for operations and improvements, are
returned to co-op members.

For Everyone…
Over 100
million people are members of 47,000 U.S. cooperatives. These people
have organized to provide themselves with goods and services in
nearly every sector of our economy. Their cooperatives may be
organized in a number of ways and for many purposes.

For Their
Members' Benefit…
Cooperatives operate for the benefit of
member-owners. In a cooperative, those with similar needs act
together and pool their resources for mutual gain. But the returns
are not just monetary. Members ensure that their cooperative business
provides the best quality products and services at the lowest
possible cost. Members control the business through participation in
their cooperative; they extend democratic practice into their
economic lives.

United…
Cooperative work together on the
local, regional and national level to promote exchange among
cooperatives, foster cooperative development, provide educational
services and provide a forum for examining and acting on common
concerns for cooperatives. Numerous cooperative associations
throughout the United States provide industry-specific services,
educational programs and financial and other services to their member
cooperatives.

Cooperatives are united internationally as well.
Over 200 national cooperative organizations representing 92 nations
belong to the International Cooperative Alliance (ICA), the apex
organization of all national cooperative movements. The ICA aims to
promote cooperative development and trade worldwide and boasts an
individual membership of more than 700 million people.

Organized
on Six Principles…

Regardless of their structure
cooperatives generally use the same principles as adopted by the
International Cooperative Alliance in 1966.

These principles
are:

1. Open and voluntary membership. A cooperative is open
to anyone who can use its services and is willing to accept the
responsibilities of membership.

2. Democratic Control. Members
are equal co-owners in the business and have a say on a one member,
one vote basis (in contrast to one share, one vote in private
companies).

3. Limited Interest on shares. Investments in the
cooperative pay limited interest to insulate the membership from
those who would invest purely for speculative return.

4.
Return of surplus to members. All net earnings (profits) are returned
to members proportionally to their patronage with the business. These
returns are commonly made partially in cash and partially in
cooperative dividends.

5. Constant education. Cooperatives
provide education in the principles and practices of cooperative
business, so that members will be good decision makers and so the
general public will better understand cooperatives.

6.
Cooperation among cooperatives. Cooperatives work together at the
local, regional, national and international levels to further
economic democracy.
Organizations to contact regarding starting a
Cooperative:

Definition

A
cooperative is a private business organization that is owned and
controlled by the people who use its products, supplies or services.
Although cooperatives vary in type and membership size, all were
formed to meet the specific objectives of members, and are structured
to adapt to member's changing needs. Cooperatives are formed by
individuals who coordinate among themselves (horizontal coordination)
to achieve vertical integration in their business activities.

Although people have been working together for their mutual
benefit throughout human history, the cooperative form of business
organization began during the Industrial Revolution. Cooperatives
were useful for promoting the interests of the less powerful members
of society. Farmers, producers, workers, and consumers found that
they could accomplish more collectively than they could
individually.
Cooperative Principles

The
US Department of Agriculture listed three principles that uniquely
characterize a cooperative organization:

The User-Owned
Principle: The people who own and finance the cooperative are those
who use the cooperative.

The User-Control Principle: The
people who control the cooperative are those who use the cooperative.
They democratically elect a board of directors. The board sets the
overall operating policies, approves the annual budget, oversees its
operation, and distributes the benefits derived from use of the
cooperative to members. The board also hires professional management
to handle the day-to-day operations.

The User-Benefit
Principle: The cooperative’s sole purpose is to provide and
distribute benefits to its users on the basis of their use.. While
the goal of agricultural cooperatives is not to generate a return on
investment, they, like all businesses, must cover costs and generate
capital to cover expansion and unforeseen emergencies.

Big living room

kitchen

Room: