Member Participation in Rural Electric Cooperatives

With Rural Electrification Administration (REA) assistance, rural electric cooperatives were formed to build and maintain electric distribution systems to serve their rural members. For the most part, the cooperatives purchased electric power from Federal power projects or electric companies and distributed it to consumers. As the distribution network expanded nationwide, the distribution cooperatives began to form member-owned generation and transmission or power supply cooperatives. Distribution cooperatives have boards of directors that establish policy for the system. The directors are elected by individual consumer/members. Individual consumer/members are free to make their opinions and concerns known to the board of directors at any time. Power supply cooperatives also have boards of directors that establish policy for the power system. They are typically selected directly by the directors of distribution system cooperatives. Because of concerns over energy costs, the environment, and conservation and because of the impact large generation and transmission facilities have on people's lives, there is a need to gain increased participation by individual members in the planning and decisionmaking processes of cooperatives. Unfortunately, consumer/member participation has been limited. As the cooperatives grew larger, there was a gradual lessening of direct member participation. The operations of the cooperatives were, for the most part, left to the staff and the boards of directors. GAO has recommended that REA require borrowers to take aggressive action to solicit the views and opinions of consumer/members in power supply planning and other major decisions. Power supply cooperative representatives could attend annual meetings of the distribution cooperatives and/or hold special meetings in areas served by the distribution cooperatives, and questionnaires or polls could be used to obtain consumer/member opinions.