WOEC, like all co-ops, is a private, not-for-profit organization that is owned and operated by its members. The cooperative model was created so that rural communities could bring electricity to themselves by using low-interest government loans—a pay-as-you-go model that insures that future members will be paying for equipment as they use it.
WOEC is a “not-for-profit”, not a “non-profit”. Nonprofit and not-for-profit are terms that are used similarly, but do not mean the same thing. Both are organizations that do not make a profit, but may receive an income to sustain their missions. Nonprofits have volunteers or employees who do not receive any money from the organization’s fundraising efforts.
WOEC follows a not-for-profit business model, which doesn’t mean the co-op doesn’t make a profit. It means any profits the utility makes go back into running the utility, or in some rare instances, back to the members.
Member-serving nonprofit organizations create a benefit for the members of their organization and can include, but are not limited to, credit unions, sports clubs, advocacy groups, and cooperatives.
Another difference between nonprofits and not-for-profits is that nonprofits are tax-exempt. While WOEC does not pay income tax on its net income, it does pay some taxes. It does pay a franchise tax to the city of Vernonia, where the headquarters is located. All members, no matter where located, pay a portion of this tax, while Vernonia residents pay the larger proportion of the tax.
According to the CFO, Daniel Huggett, “We do pay a gross revenue tax, which is paid in lieu of property taxes on our infrastructure—our transmission and distribution poles and lines. We do pay property taxes on our land and buildings, but we don’t pay on those other assets that every member owns a part of, that allow us to run the utility. We don’t pay an income tax because we don’t show a net income. We show the margin.” The margin is what’s used to pick up the slack for emergency repairs from bad storm damage, as an example.
Sources: Understanding Capital Credits, Ruralite May 2017 Page 4, and What It Means To Be a “Not-For-Profit”, Ruralite April 2017 Page 4;
The Not-For-Profit Difference; Ruralite, January 2018 Page 28