Cooperative Approaches to Energy, Water and Rail

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Anna Birley:

"In New Zealand, when electric power boards were restructured, all consumers were deemed to own them by virtue of paying for their existence and operation through their bills. As a result, a large number of consumer- or community-trust owned companies were established such as Vector and Electricity Ashburton (EA) networks.

Looking at EA Networks as an example, it is co-operatively owned. The district council owns some shares, and the rest are owned by customers, each of whom holds 100 shares. Consumer shareholders can elect executive committee members on a one-member-one-vote basis.

Vector have a similar approach but a slightly different model. It is 75.1 per cent owned by a consumer trust, which all customers can be a member of. The trust provides the company with two of its seven board members. All consumers receive dividends – in 2009 each received USD 203.

Closer to home in Wales, Dwr Cymru Welsh Water also has a not-for-profit model, organised along mutual lines. As a company limited by guarantee rather than shares, it has no shareholders.

In 2000, Welsh Water’s current not-for-profit owner Glas Cymru was created as a “people’s bid” to take over Welsh Water, based on a belief that water is a public commodity, not a private enterprise. The not-for-profit structure sought to save money and reduce bills through:

not paying dividends to shareholders an ownership model which meant it always operates in the interests of its customers changing the way they raise finance to reduce the cost of credit Glas Cymru is governed by members drawn from across the supply area and with a range of backgrounds, skills and experiences. There is an AGM to appoint the directors and auditors, and to challenge the company on remuneration and governance.

Welsh Water now have the strongest credit ratings in the water industry, reducing their financing costs and enabling them to spend money on improving infrastructure and services, or reducing customer bills.

And it’s working. Customer bills have steadily reduced, having so far returned around £180m to customers in the form of “customer dividends”. In addition, they have provided over £10m of support for vulnerable and low-income customers through social tariffs (reduced tariffs for customers struggling to pay) and an assistance fund." (