COMMISSION JURISDICTION OVER UTILITY COOPERATIVES

A group of farmers desire electricity. They propose to form a cooperative, to borrow money and to construct electric distribution lines. They probably will incorporate the cooperative as a stock or non-stock corporation in order to obtain the benefit of limited liability. The cooperative might be formed under a statute specifically enacted to authorize the formation of cooperatives or under a general incorporation statute.

Normally, the charter of the cooperative will provide for equality in control by the members or shareholders and for a limited return or no return on capital investment. The cooperative will probably apply to the Federal Government for a loan from the funds made available for rural electrification by recent legislation. Under this legislation 63.5 per cent of the approved loans as of July 14, 1936, amounting in the aggregate to $14,699,412, was made available to a total of sixty-six cooperatives. The electric lines will be constructed under a construction contract entered into between a construction company and the cooperative.

A state commission has the power to issue certificates of convenience and necessity, to approve the incurrence of indebtedness, to establish rates and to fix service standards of electric utilities. Is the proposed cooperative subject to commission control of this character?