The Cloverland Electric Cooperative Board of Directors voted in favor of a proposal to return to being member regulated in accordance with P.A. 167 of 2008, at its special open meeting in Dafter on October 15, 2015. At its December 22 meeting, the MPSC determined that Cloverland met the legal requirements to become member regulated effective January 19, 2016.
What is Member Regulation?
In general, member regulation allows an electric cooperative to make decisions in specific business areas more efficiently and effectively without having to seek the approval of the Michigan Public Service Commission (MPSC).
Many types of cooperatives such as credit unions, hardware stores, agricultural, telephone, and grocery stores are member regulated. Each has the common thread of being democratically controlled, member-owned and not-for-profit.
The 40 municipally-owned electric utilities in Michigan are member regulated in that the citizens of the town elect the council who then make the decisions and policies for the utility.
All nine of the Michigan electric cooperatives are member regulated and nationally, 678 or 80 percent of the electric cooperatives are member regulated through a locally elected board of directors.
Cloverland Electric Cooperative is governed by nine co-op members elected by the membership to its board of directors. Each director serves a three-year term.
We believe that you, and the directors you elect to represent you, can better govern Cloverland Electric Cooperative and the state Legislature agrees. Public Act 167 of 2008 states that “member-regulation by a co-op in the areas of rates, charges, accounting standards, billing practices, and terms and conditions of service may be more efficient and cost-effective.”
Why Did Cloverland Return to Member Regulation?
From its founding in 1938 until 1965, Cloverland was member regulated. As the state was growing, aggressive utilities were attempting to take control of co-op service areas. The electric cooperatives requested the MPSC provide territory protection. The MPSC agreed but regulated other business decisions. In 2008, Public Act 167 was adopted allowing electric co-ops a process to return to member regulation.
Cloverland will save approximately $140,000 a year by reducing MPSC assessments and legal fees related to hearings in Lansing.
Cloverland’s board will have the flexibility to establish policies, procedures and rates much quicker. MPSC hearings and decisions typically take a year or more through the legal process.
Cloverland’s board can make forward-looking budget decisions for the co-op’s infrastructure needs. MPSC’s decisions are based on nearly two-year old data.
How and When Would Cloverland Return to Member Regulation?
The process to return to member regulation started with a board member making a proposal. That was done at the regular board meeting on June 19. A minimum 90-day notice period followed before scheduling a special board meeting to consider the proposal. The proposal and meeting date was provided in the September issue of Michigan Country Lines. Members had seven opportunities at community meetings across the service area to express comments for the board to consider prior to the October 15 meeting. A dedicated phone number and email address was also established to receive comments.
Cloverland’s board voted on the proposal by an 8 to 1 vote and then notified the MPSC of its decision. Minutes of the meeting were published in the November Michigan Country Lines.