community
august16
2018
3
Understanding How WOEC Operates continued from front page
of homes in rural America had electric
power.
In May of 1935, President
Franklin Roosevelt signed Executive
Order No. 7037 which established the
Rural Electrification Administration
(REA) and one year later the Rural Elec-
trification Act was passed by Congress,
creating a loan program and providing
technical assistance to rural citizens.
“Electricity is a modern necessity of life,
not a luxury,” said FDR in 1938.
The REA initially struggled, as
already established private electric utili-
ties showed little interest in borrowing
money and investing in the sparsely
populated areas the program was estab-
lished to help. Homes and businesses
within the current WOEC service area
are a prime example of some being left
out of system; WOEC wasn’t created
until 1944.
In 1937 the REA created the
key piece of legislation, the Electric Co-
operative Corporation Act, that allowed
for the formation and operation of not-
for-profit, consumer-owned electric co-
operatives and a new model was created:
local people working together to meet
local needs.
In 1942, America’s electric co-
operatives banded together and formed
the National Rural Electric Cooperative
Association (NRECA) which provided
a single voice for all cooperative mem-
bers, and continues today as a political
power representing them and their inter-
ests in Washington, D.C.
Following World War II the
number of rural electric co-ops, includ-
ing WOEC, quickly flourished and ex-
panded, as did the miles of line and num-
ber of consumers connected. By 1953
over 90% of U.S. farms had electric ser-
vice.
Today, according to the NRECA,
there are over 900 electric co-ops with
42 million customers across 47 states.
In Oregon, 18 electric co-ops provide
power to 10% of the population.
A Board of Directors, made up
of local citizens, are elected by the mem-
bers and represent the members when
making decisions about the operation,
management, and policies of the West
Oregon Co-op. Monthly board meetings
are always open to members so they can
stay informed of current issues facing
the co-op. A set of bylaws govern the
co-op and establish rules for members
and membership, the powers and re-
sponsibilities of the Directors and offi-
cers, and rules for meetings and financial
transactions. A separate set of Service
Rules & Regulations establishes guide-
lines for service, fees, and operations.
So why does the co-op model
continue to be an effective way to pro-
vide power to rural citizens?
“Cooperatives offer an alterna-
tive model of capitalism that could and,
in many cases already does, perform in a
way that capitalism as it is now practiced
is not performing,” says Robert Reich, a
former Secretary of Labor from 1993 to
1997, and an author and commentator on
public policy issues. Reich says in an ar-
ticle on the NRECA webpage that he has
been told co-ops are an outdated throw-
back to the 1920s or 30s, but says noth-
ing could be further from the truth. “As
more and more wealth goes to the top,
there is less and less purchasing power
in the middle class and in the poor to
actually turn around and buy goods and
services that are being produced. A co-
operative takes the ideal of democracy
and puts it into our workplaces and our
organizations ”
WOEC General Manager Perry
agrees, saying, “The concept of an elec-
tric co-op is that of banding together and
pooling our resources, and then having
access to low interest loans from the
government to help the process move
forward. I hate to use the phrase, ‘We’re
stronger together,’ but it’s true. The co-
op makes it possible for us to come to-
gether and then we all own it and we all
share collectively in it. It’s here for us
all to collectively benefit. The co-op
doesn’t stop if one member goes away
on vacation. We still have to maintain
the lines from the substation all the way
to your house and beyond.”
WOEC is a not-for-profit co-
operative (as opposed to a non-profit).
As a “natural monopoly,” WOEC must
provide service to anyone who requests
it in their service territory. “We have to
serve you,” explains Perry about what
it means to be a natural monopoly. “We
can’t discriminate because we have a
service territory that is ours to serve.
PGE can’t come in here and provide ser-
vice and we can’t take their customers.
That protects our investment.”
Perry goes on to explain that
the price per-kilowatt-hour that WOEC
charges their members is based on what
it costs the co-op to distribute the power,
and nothing more.
“There is a myth out there, or at
least the misconception, that we’re sup-
posed to be the lowest cost provider,”
says Perry. “Most co-ops have never
been the lowest cost provider because
of the economics of being a cooperative.
We do business ‘at cost.’”
“WOEC is a business, just like
PGE, just like Home Depot, just like J.C.
Penney,” says Dan Huggett, Manager of
Finance & Administration for WOEC.
“We operate in much the same way. We
need to take in enough money to pay the
bills every month.”
Huggett does note a distinct dif-
ference in how a not-for-profit operates;
as a utility WOEC is limited in how they
can create revenue. While their mem-
bers don’t have the option to shop around
for a service provider, WOEC also can’t
go out and recruit new customers and are
limited to working within the confines of
their service territory.
The other difference is that
WOEC doesn’t have to make a profit.
They don’t have share holders who need
to see returns on their investment, and
they don’t have an owner looking to get
rich from the excess income that they
can make. The members are the owners
and any profit goes back into running the
co-op.
Any margin that WOEC makes
may sound like profit, or surplus income,
but the fact is, the co-op is required by its
lenders to make a certain margin in order
to ensure repayment of loans. Those
“covenants” are agreements that the co-
op will have a certain amount of money
set aside, and are based on a percentage
of the amount of interest the co-op is
Publisher and Managing Editor
Scott Laird
503-367-0098
scott@vernoniasvoice.com
Contributors
Chip Bubl
Tobie Finzel
Superintendent Aaron Miller
Karen Miller
Shannon Romtvedt
Fire Chief Dean Smith
Photography
Scott Laird
One year subscription
(24 issues) $35
Vernonia’s Voice is published
on the 1st and 3rd Thursday
of each month.
Vernonia’s Voice, LLC
PO Box 55
Vernonia, OR 97064
503-367-0098
Want to advertise?
Have an article?
Contact: scott@vernoniasvoice.com
www.VernoniasVoice.com
continued on page 6
Cedar Side Inn
FULL
SPORTS
PACKAGE!
Happy Hour Mon-Fri 4-7
Taco Tuesday
from opening until 9pm
3 hardshell or 1 softshell $4.25
LIVE MUSIC
Ladies’ Night
every Thursday 6pm-close
• Free Pool • Free WiFi • Specialty Pizzas
iheck our Facebook page for daily specials and upcoming events
756 Bridge Street, Vernonia
503-429-5841
• Specialty hamburgers
• 8 Draft beers & mixed drinks
• 5 Craft beers on tap
• Pool tables & satelite TV
• Free Wi-fi
• Beer & Kegs to go
Sun - Thurs 11 AM - Midnight •
733 Bridge St, Vernonia
Sat, Sept 15
Thrillride
“BIKER FRIENDLY”
Fri - Sat 11 AM - 2:30 AM
• 503-429-9999