Democratic Governance Scoring
*** Electric Cooperatives that do not provide access to their bylaws (as in the case of Tri-State and Tri-County Electric Membership Corporation) will have significantly lower scores here.
In this section of the scorecard, we measured the ability of member-owners to change their co-op’s bylaws, attend, participate and read minutes from board meetings, if they have access to a fair voting process, and if the cooperative is transparent around key financial information.
Elections and Representation
Electric cooperatives are owned by the members they serve — but how much control do member-owners have over decisions made by their co-op? One obvious way for member-owners to be democratically involved is to vote for their representatives on the co-op’s board of directors.
But at some electric cooperatives in Tennessee, incumbent board candidates face no challengers during elections and maintain their seats for years or even decades. In some cases, the board member may have even obtained their position from a parent or spouse. Winning these board seats is often very difficult for new candidates where board incumbents use deep community ties and financial resources to hold on to their positions of power.
On the map below, we compared the racial makeup of the members of each Tennessee electric cooperative to some basic board demographic information that was shared with us by Rural Development Initiatives. While lack of complete data sets kept us from scoring this metric, we encourage readers to explore the diversity of their co-op service area and consider whether their board of directors truly represents the membership.
Membership Diversity of Tennessee Electric Cooperatives
This information is not incorporated in the scorecard point system. We present this information simply for consideration on demographics of cooperative boards.
Board Meetings and Bylaws
There are other ways that member-owners could be involved in the governance of their cooperative, but they often run into barriers.
While most utilities owned by cities allow their customers to attend and speak at board meetings, many electric cooperatives prohibit their member-owners from attending or participating in these meetings, where important decisions are made about programs and policies offered by the co-op. Lack of access to board meetings and meeting notes means that member-owners are often unable to speak to the board about important issues or hold their representatives accountable for how they vote.
Across the country and even here in Tennessee, member-owners have been fighting to make their cooperatives more democratic by running for board seats, pushing for open meetings, and proposing amendments to their bylaws. For helpful resources on how to start organizing at your electric cooperative, check out this toolkit by New Economy Coalition.
Scoring Method: Democratic Governance, 40 Total Points
Finances / Compensation Scoring
In this section, we looked at the average compensation of board members at Tennessee electric cooperatives. We also compared CEO salaries to the average median income of their service area.
Electric cooperative annual earnings come from the member-owners that purchase electricity from the utility. At most electric cooperatives throughout the country, a portion of this money is returned to member owners periodically as “capital credits” or “member dividends.” In Tennessee, no electric cooperatives return dividends to their members because of a Tennessee Valley Authority policy.
Board & CEO Compensation
Board members, who meet as little as once per month and have full time jobs outside of the cooperative, are usually able to determine their own compensation without member approval. Across the country, some electric cooperative board members have elected to pay themselves exorbitant amounts, and also pay their CEOs hundreds of thousands of dollars per year, even in areas where the median household income is below $30,000.
See the below map showing CEO pay compared to area median income across the state.
Scoring Method: Financial/Compensation, 20 Total Points
Member Programs Scoring
In this section, we tracked whether co-ops are offering programs and policies that improve quality of life for their member-owners. This includes programs for inclusive energy efficiency, community solar, broadband internet, transparent and affordable fixed fees, and herbicide free options for maintaining residential right of ways.
Electric cooperatives are an important resource for rural areas. They provide jobs, recruit new businesses and invest huge amounts of money into energy infrastructure, co-op programs and local charities. Electric co-ops also have access to billions of federal and state dollars to fund programs for their members that would greatly improve quality of life.
Co-op programs like Pay-As-You-Save (PAYS) allow members to weatherize their homes and then pay the costs back to the co-op over time on their monthly electric bill. Community solar programs at co-ops can allow rural households to access clean, renewable energy without requiring members to shoulder the upfront costs or meet structural install requirements, and can reduce energy bills and energy waste. These types of programs are a huge need for member-owners in Tennessee, where the amount of income spent on energy bills, known as energy burden, is higher in rural areas.
One barrier to implementing energy efficiency or solar at electric co-ops is known as a “fixed fee” or “basic utilities charge”. Because the charge is not based on the amount of electricity used by the member, it reduces incentive to save electricity or implement solar. In some cases the fixed fee is not visible on a member’s electricity bill, so they don’t know when the fee has been raised.
In Tennessee, lack of sufficient internet access is also a huge problem for the rural areas that are served by electric cooperatives. In 2017, the state governor passed the “Broadband Accessibility Act,” giving electric cooperatives legal access and financial incentives for implementing broadband internet programs for their members.
Another issue of concern for Tennessee’s member-owners is the spraying of herbicide along electricity line “right of ways” across members’ property, especially without notice. In 2016 and 2017, member-owners of Powell Valley Electric Cooperative in East Tennessee lost their gardens and beehives and some encountered negative health impacts when the right-of-ways on their property were sprayed without notice. Following this incident, member-owners at PVEC and a neighboring utility worked together to develop an opt-out and notification policy at their cooperatives. Providing these types of policies is a clear way to keep members safe and protect their livelihoods.
Scoring Method: Member Programs, 40 Total Points