Duplicative Regulation Only Costs Members

By Robin Doege, President/CEO

Electric cooperatives are member-owned and operated. That means member-owners make decisions for their cooperative together through a democratic process. Member-owners elect a governing board from within the membership that is tasked with balancing the interests of the community in setting rates and policies. This local democratic process has worked well since the founding of electric cooperatives for nearly 100 years.
However, a regulatory process in place for investor-owned utilities is upsetting the tradition of local democratic control and costing member-owner’s money. Through Minnesota Statute, the Minnesota Public Utilities Commission (PUC), the regulator for investor-owned utilities, can impose additional regulation on locally regulated cooperatives and municipal utilities. This additional regulation is time-consuming (with reviews taking years) and costly (utilities are assessed for the administrative costs of the regulation). Last year an electric cooperative was assessed $40,000 after the PUC re-regulated a local decision on an incremental charge ($5 a month) to recover costs of interconnection. The cost of interconnection is required to be recovered per Minnesota law. The review took months and the $40,000 assessment doesn’t consider the cooperative staff time.
The duplicative regulation by the PUC only costs member’s money while offering no benefit. The local regulatory body provides the same service as the PUC, applying the laws of Minnesota while balancing the interest of the ratepayers. However, with local regulators, if a member-owner disagrees with the balancing of member interests they have a direct remedy, the local democratic process.
For nearly 100 years’ member-owned electric cooperatives have governed themselves locally, providing the safe, affordable, and reliable service their community wants and needs. Please join us in asking the legislature to eliminate duplicative regulation of consumer-owned utilities.
(Editors Note: Information provided by the MREA.)

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