Hawaii
Energy Policy Forum > 2002
Articles
Cooperatives Go Tropical
Christie Gehring
Elmhurst Ruralite
October 2002
Just in time for National Cooperative Month, electric cooperatives
are welcoming a new member to the family. Effective October
1, Kauai Island Utility Cooperative (KIUC) is an authentic
electric co-op. It becomes the first electric cooperative
in the Hawaiian islands. Once fully dependent on a utility
based in Connecticut, more than 5,000 miles away, residents
of Kauai now have power in their own hands. It was no luau
bringing the cooperative together. KIUC officials spent 39
months working to gain public and regulatory support to purchase
the electric utility and turn it into an organization owned
by, and operated for, the consumer-members it serves.
On September
18, the Hawaii Public Utilities Commission approved the purchase
agreement between KIUC and Citizens Communications
Company-the parent company of the investor-owned utility
that had served Kauai.
"
This is an historic step that will give the people of Kauai
more control over their island's energy future, in addition
to reducing the island's high cost of electricity," said
Gregg Gardiner, chairman of KIUC. "It is a big win for
everyone who believes that Kauai's energy future should be
controlled by people who live here and who are passionate
about protecting our beautiful environment. It is a big win
for our economy because in years to come it will keep tens
of millions of dollars from leaving the island's economy."
Interest
rate savings attributable to low-cost financing is expected
to provide $26 million in rate relief to Kauai
consumers during the first 10 years of the co-op's existence.
"
Even after providing this rate relief, we expect that KIUC
will build up nearly $80 million of equity belonging to co-op
members and generate over $91 million of free cash flow over
this same 10-year period," said Fran Brennan, KIUC board
member. "As a consumer-owned co-op, these financial
resources will enable the people of Kauai to have a meaningful
voice in their future energy decisions."
The concept of cooperatives dates back to the beginning of
civilization. Historians have found evidence of it in Greece,
Egypt, Rome and among Native Americans. Groups of people
depended on each other, sharing food and agricultural tools,
protecting livestock and building shelters.
Theses acts of
informal cooperation laid the foundation that led to the
cooperative form of business. The first documented
successful cooperative effort took place in Rochdale, England.
Textile workers were fed up with unjust treatment from mill
owners-especially the overpriced merchandise in company stores.
As a result, 28 workers form the Rochdale Equitable Pioneers
Society, pooling their money and resources to open a member-run
store.
Though it was agreed the store would carry only food
items, that first night in December of 1844, tallow candles
also
were sold because the gas company refused to supply service
to their establishment. That gave birth to the first "candle
co-op"-the precursor to the electric cooperatives of
today.
As more people and communities realize the benefits
of the cooperative form of business, they are making the
switch.
According to the National Rural Electric Cooperative Association
(NRECA), co-ops grew twice as fast as the electric industry
average in 2000. Electric cooperatives serve 35 million people
in 46 states, and 15 million businesses, homes, schools,
churches, irrigation systems and other establishments in
2,500 of the 3,128 counties in the United States.
But the growth and impact of cooperative businesses is not
limited to the United States. The NRECA has helped start
rural electrification in developing countries around the
globe, including Guatemala, Nicaragua, Bolivia, the Dominican
Republic, Uganda, Bangladesh and the Philippines.
And now,
Hawaii joins the electric co-op family.
"
Many of our board members have put thousands of hours into
this effort-without pay," Gardiner says. "I am
proud of them. They have worked tirelessly and unselfishly
throughout this whole process.
" They have done a wonderful job rallying support and bringing
people together. This is a huge step for Kauai and the state
of Hawaii."
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