Cooperative History

The cooperative was formed during the Great Depression. During this time in our Country’s history the rural farms had little electricity available to them. Large investor owned power companies did not provide power beyond the town boundaries. The large utilities could not imagine rural farms using enough electricity to pay for the construction cost to provide service to the wide open areas across the country. With investment dollars limited by the depression farm families and utilities could not raise the capital to build the electric facilities needed to serve the farms. In the early 1930’s President Roosevelt started a series of programs to stimulate the economy. One of these programs was the Rural Electrification Administration or REA. This program would provide needed capital to utilities to bring electric power service to the rural farms. The program was first offered to the large utilities. Again, the big investor utilities said no believing that rural users of electricity could not provide enough profits to repay the government loans. The original loans were for 2% interest. During the depression this was still a very competitive interest rate. The difference was the availability of the money. What happened next was classic American willpower. Farmers and other rural residents got together and formed their own utilities. They used the cooperative model that had been successful in other areas and began serving customers in 1935 and 1936. Paulding Putnam was formed in 1936. The board of trustees approved the original Code of Regulations on June 19, 1936. The membership of the cooperative approved the Code at the cooperative’s annual meeting held on March 31, 1938. The original aim of the cooperative was a simple one: “To make electric energy available to its members at the lowest cost consistent with sound economy and good management”. That simple principal still guides us today. In the past 70 plus years the cooperative has grown and changed in many ways. The cooperative now serves over 12,900 homes and businesses. Paulding Putnam serves in both Ohio and Indiana. The cooperative employs 34 people at two offices. The main office is located in Paulding, Ohio. A district office is located in Columbus Grove, Ohio and serves most of the Putnam county area. The cooperative is part of two main organizations. First is the Ohio statewide cooperative group and its power supplier Buckeye Power. The second is the National Rural Electric Cooperative Association. Through these two groups the cooperative receives many services ranging from power supply, safety, and employee training to pension and retirement investment plans. The National group provides a continued Washington D.C. presence for the cooperatives. Paulding Putnam is one of 25 Ohio cooperatives and one of over 900 electric cooperatives nationwide. Paulding Putnam Electric Cooperative is here today to provide quality electric service to its members in Ohio and Indiana. The mission of the co-op has not changed in over 70 years. Through the direction of the locally elected 9 member board of directors the membership is provided hands on control of the future of their cooperative.

What is a Co-op?

A co-op is founded when people with a similar need form an organization to provide goods or services, like a farmers market food co-op or financial services credit union co-op. Electric co-ops were formed in much the same way to provide electricity to rural areas abandoned by for-profit electric utilities. There are no Paulding Putnam electric  customers. Our Member-Owners have an equal voice in the co-op’s direction and certain rights that are quite different from those who are customers of a for-profit utility, owned by shareholders. Members gain a share of the co-op ownership as they use our services. Our net margin after expenses and reserves does not belong to the utility; it belongs to our Members. The margins must be used either to improve and maintain operations or be distributed back to Members. This is a major, unique and beneficial aspect of a cooperative. Electric cooperatives are:
  • private, independent electric utility businesses
  • owned by the members they serve
  • incorporated under the laws of the states in which they operate
  • established to provide at-cost electric service
  • governed by a board of trustees, elected from the membership, who set policies and procedures that are implemented by the cooperatives’ professional staff
In fact, according to the National Cooperative Business Association (NCBA), more than 120 million people–two out of every five people–are members of one of 48,000 U.S. cooperatives.  Worldwide, more than 750,000 cooperatives serve 730 million members. You might be familiar with some well-known national cooperatives, such as Welch’sLand O’LakesOcean SpraySunkistPublix SupermarketsACE HardwareNationwide Insurance and the Associated Press. Nearly 1,000 rural electric co-ops own and maintain nearly half of the electric distribution lines in the U. S., which cover 75 percent of the nation’s land mass and provide electricity to 36 million people.

The 7 Cooperative Principles

Cooperatives around the world operate according to the same set of core principles and values, adopted by the International Co-operative Alliance. Cooperatives trace the roots of these principles to the first modern cooperative founded in Rochdale, England in 1844. These principles are a key reason that America’s electric co-ops operate differently from other utilities, putting the needs of their members first.

1. Open and Voluntary Membership
Membership in a cooperative is open to all persons who can reasonably use its services and stand willing to accept the responsibilities of membership, regardless of race, religion, gender, or economic circumstances.

2. Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Elected representatives (directors/trustees) are elected from among the membership and are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote); cooperatives at other levels are organized in a democratic manner.

3. Members’ Economic Participation
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital remains the common property of the cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative; setting up reserves; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4. Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control as well as their unique identity.

5. Education, Training, and Information
Education and training for members, elected representatives (directors/trustees), CEOs, and employees help them effectively contribute to the development of their cooperatives. Communications about the nature and benefits of cooperatives, particularly with the general public and opinion leaders, helps boost cooperative understanding.

6. Cooperation Among Cooperatives
By working together through local, national, regional, and international structures, cooperatives improve services, bolster local economies, and deal more effectively with social and community needs.

7. Concern for Community
Cooperatives work for the sustainable development of their communities through policies supported by the membership. They empower those they serve.

The motto? What’s good for the community is good for the cooperative.

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