The workings of an electric co-op

ORONOCO, Minn. — If you grow grains, you're probably familiar with the cooperative model for grain storage spaces or ethanol production. Did you know that the same model applies to some electric companies too?

People's Energy Cooperative was founded in 1936 by a small group of people who sought to provide reliable energy for rural Olmsted County. Now, they provide innovative energy solutions at a fair and reasonable price to nearly 19,000 members in six counties. Gwen Stevens, director of member and community relations at People's, answered some questions for Agri News.

AN: What are the business models for an electric utility?

GS: Cooperatives came online in the mid-'30s thanks to the Rural Electrification Act. Providing electricity is the primary function of a cooperative. PEC is a nonprofit organization governed by a board of directors nominated and elected by its members, unlike an investor-owned company, which is for profit, or a municipality, which is run by a city.

AN: What are the seven cooperative principles and how do they drive the operation of the business?

GS: The principles are the same for any cooperative and include:

• Open and voluntary membership

• Democratic member control

• Members' economic participation

• Autonomy and independence

• Education, training, and information

• Cooperation among cooperatives

• Concern for community

The first principle states if you live in PEC's territory, you can be a member regardless of race, religion, gender, or economic circumstances.

The second principle gives all members equal voting rights to elect the board of directors. When seats are open, we shout from the rooftops that positions are available and if you live in the territory, you are eligible to run for a seat.

The third principle discusses the determined budget set up by PEC that includes a small surplus to assist in any unforeseen circumstances. You pay your bill with the allocated surplus, and at the end of the year, capital credits are returned to patrons.

The fourth principle states that PEC is owned by members and not run by the government.

The fifth principle refers to the robust training program for the board of directors, members and employees. Employees receive training to do their job effectively, and they learn new and innovation skills to help the cooperative become more efficient.

The sixth principle allows nearly 1,000 participating cooperatives to pool their resources to have the benefits of a large business.

The seventh principle allows cooperatives to work for the sustainable development of their communities through policies supported by the membership.

AN: What is reliable energy and what affects reliability?

GS: Reliability is making sure the power is on all the time. There are a couple things that affect reliability. One is the infrastructure, the actual poles and power lines. It's important the infrastructure is in good working condition to conduct electricity. If you're home and lose electricity for an hour or so, it's not a big deal. However, if you're in a manufacturing or business setting and you lose power, it can cost thousands of dollars. For example, I used to work at Schmidt Printing in Byron. There were a handful of times when we lost electricity. Schmidt Printing is a web offset printer and when the power was out, we had to stream thousand-pound rolls of paper back through the press. There was lost time and materials.

Trees can also affect the reliability, therefore we have a solid vegetation management program to ensure trees are not falling or growing into power lines.

Another cause of power outages are animals. Squirrels are the major cause of power outages in the country. There are devices put in substations and on transformers to help keep squirrels, raccoons and other rodents out of the equipment.

AN: Why is superior customer service important?

GS: We know our customers, or members, could easily be our neighbor, family member or friend because we live in the communities we serve. We understand when a member calls we're talking to a member-owner. The member-owners have a voice since we have a democratic process to appoint our board of directors.

AN: PEC is a distribution cooperative. What does it mean to be a distribution cooperative?

GS: We buy power from two power suppliers. We buy from Dairyland Power Cooperative out of La Crosse, Wis. Then, when we acquired Alliant Energy's service territory in 2015, we agreed to purchase from Alliant Energy to serve their former customers.

AN: Does PEC generate any power?

GS: We own three solar arrays. One was constructed on a shed behind the office so we could explore solar energy. The second solar array, we partnered with Freeborn-Mower Electric Cooperative Services in Albert Lea, and Tri-County Electric Cooperative out of Rushford, Minn., and created the Minnesota Three LLC Solar Array. The three of us own it and we sell power to Dairyland. Then, last year our Community Solar went live for members who are interested in utilizing renewable energy, but may not have the funds or location to harness their own energy.

Photo caption: People's Community Solar is a shared, renewable energy resource that is owned, operated, and maintained by People's Energy Cooperative. Through a turn-key program, participating members are able to tap into the sun's energy more conveniently than if they owned their own solar array.

Credit: Contributed photo