THINKING BEYOND THE BARREL IMAGINE THE POSSIBILITIES KAUA I ISLAND UTILITY COOPERATIVE ANNUAL REPORT

Transcription

1 THINKING BEYOND THE BARREL IMAGINE THE POSSIBILITIES KAUA I ISLAND UTILITY COOPERATIVE ANNUAL REPORT

2 Aloha Members of Kaua i Island Utility Cooperative, We are pleased to present our 2007 Annual Report, and we are encouraged by our strong financial position. At the end of 2007, KIUC s total equity was $41,323,894 or 13.81% of its total assets of $299,208,241. Our times interest earned ratio (TIER) was 2.17, well within the minimum 1.25 TIER required by our major lender the Rural Utility Service. We also retired $2,279,465 in patronage capital to our members. Mahalo to our staff, board and members for their support through 2007, Dennis M. Esaki Chairman of the Board Randall J. Hee President and CEO TABLE OF CONTENTS From The Chief Executive Officer From the Chairman of the Board KIUC Board of Directors Strategic Plan Letter from Accountant Summary of Operations Balance Sheet Statement of Income and Patronage Capital Statement of Cash Flows Pie Chart

3 RANDALL J. HEE / PRESIDENT & CHIEF EXECUTIVE OFFICER Challenged by global energy supply and climate change issues, our Board and staff formulated a 15-year Strategic Plan. The Strategic Plan focuses on Reliability, Sustainable Energy Supplies and Fair and Competitive Rates. We invite our members involvement as we develop and implement this three-point Strategic Plan. The balance of these three points determines how well we serve our members and customers on Kaua i. We live in a time when we can change our energy future and how we affect our environment. I am confident that KIUC will meet that challenge and am appreciative of your support. KIUC 2007 ANNUAL REPORT 1

4 DENNIS ESAKI / CHAIRMAN OF THE BOARD Our strength is our balance... we are committed to providing reliable power at the lowest rate we can, increasing our use of renewable energy resources to reduce our dependence on oil and increasing efficiency of our oil-based generation... balancing conflicting goals with responsible decisions. 2 THINKING BEYOND THE BARREL

5 BOARD OF DIRECTORS Dee Crowell Board Member Dane Oda Board Member Ray Paler Board Member Peter Yukimura 1st Vice Chairman Dennis Esaki Chairman T. Phil Tacbian Treasurer David Iha Secretary Carol Bain Board Member Allan Smith Board Member The KIUC Board of Directors gives hundreds of hours each year on behalf of the member-owners to direct the cooperative. They approve annual operating budgets, construction work plans and capital expenditure budgets; and ensure the development of plans for a long-term supply of reliable, economical electricity and the development of long-term sources of operating capital. It is also the board s duty to approve plans for management of member equity, and to select KIUC s independent auditors and engage them for an annual financial audit. The board hires a Chief Executive Officer to manage the company and its employees, and evaluates his or her performance. The board works with the CEO to develop policies to ensure members concerns are addressed promptly and fairly, to promote good member relations and to keep members informed on important issues. KIUC 2007 ANNUAL REPORT 3

6 STRATEGIC PLAN Message from the Chairman One of the most important jobs the 29,000 member-owners of KIUC entrust to the nine Directors they elect is to guide the co-op into the future for the benefit of all its members. This Strategic Plan represents that work and specifies KIUC s priorities for the next 15 years and beyond. While a few of the priorities in this plan, like safety, reliability and communications are evolutions and improvements of our current work and our current thinking, two important priorities in this plan are radical departures for Kaua i s electric utility. KIUC is committing itself to generate at least 50 percent of its electricity renewably without burning fossil fuels within 15 years. Continuing business as usual is something we all now know is unacceptable. We must stop depending on oil to generate most of our electricity when its rising price is completely beyond our control and adversely affects our members. It is wrong to continue using oil to generate most of our electricity now that we understand this is causing our planet s climate to change and destroying the environment our children will one day inherit. KIUC s goal is much more ambitious than the previously established goals. It requires a paradigm shift that will result in a radical restructuring of the way we do business. KIUC is committed to seek fair, restructured rates that meet the needs of our member-owners and recognize the changing nature of electric utilities. We will not know what these rates will look like without a study, but we do know that the rate structure we are using today needs significant improvement. Some of the issues we must investigate include time-of-use rates that could delay the construction of expensive new infrastructure, green rates that would let people choose to pay a little more to fund the most environmentally-sound generation, life-line rates that would help low and fixed-income members, standby rates that encourage distributed renewable generation without subjecting members to unfair subsidies, partial occupancy rates that would ensure homes that sit idle pay their fair share, and equity goals that ensure financial stability for the co-op, while keeping total rates as low and equitable as possible. Our renewable generation and rate restructuring goals are radical ideas for us and for the electric utility industry in the state of Hawai i. Achieving these goals will not be quick and/or easy, and we expect to learn many things along the way. But doing the right thing is not always easy. It requires a change in mindset and a change in past business practices to achieve these goals. Ua mau ke ea o ka aina i ka pono. Dennis M. Esaki Chairman of the Board 4 THINKING BEYOND THE BARREL

7 STRATEGIC PLAN Situation Assessment It is important to understand the current situation KIUC operates under so today s challenges can be addressed through strategic planning. KIUC is a cooperative utility, founded in 2002 when ownership of the island s utility was converted to a cooperative from an investor-owned utility named the Kaua i Electric Division of Citizens Utilities Company. Governance of KIUC is provided by a nine-member Board of Directors, elected by the KIUC membership. At the end of 2006, KIUC had more than 29,000 customers divided as follows: 76 percent Residential, 13 percent Commercial, 10 percent Street Lighting, 0.4 percent Industrial and less than 0.1 percent Irrigation. Revenues, on the other hand, were divided as follows: 36 percent Residential, 35 percent Industrial, 28 percent Commercial, 0.8 percent Street Lighting and just more than 0.1 percent Irrigation. The latest member survey, taken in 2006, revealed that charging reasonable rates and delivering good value are the strongest, most significant drivers of overall satisfaction among KIUC members. Major concerns include the monthly energy adjustment, the need for increased alternative energy and keeping members better informed during outages. KIUC 2007 ANNUAL REPORT 5

8 STRATEGIC PLAN The last rate case was completed in Since then, costs that were included in the base rate such as materials and labor have increased, while the base rate has remained unchanged. On the other hand, the monthly energy adjustment which is separate from the base rate and is meant to cover the variable cost of fuel has varied widely and has, at times, been even higher than the base rate. This energy adjustment creates unpredictable costs for members and may cause negative financial impact when pursuing future renewable energy projects. In 2006, the average KIUC residential rate was 32.8 cents per kilowatt-hour (kwh), while that of Hawai i Electric Light Company (HELCO) was 31.0 cents/kwh, Maui Electric Company (MECO) was 27.7 cents/kwh, and Hawaiian Electric Company (HECO) was 20.0 cents/kwh. KIUC currently relies on highly refined oil products (diesel and naphtha) for more than 90 percent of its energy supply. In contrast, most of the state s energy is supplied from coal and residual fuel oil (RFO), both of which are significantly cheaper. Coal is about 1/5, and RFO is about 5/8, the cost of diesel or naphtha. The U.S. Mainland, on average, produces 50 percent of its electricity from coal, 19 percent from nuclear, and 19 percent from natural gas, each of which are also significantly cheaper than diesel or naphtha. Other impacts that drive higher costs for KIUC include economies of scale KIUC has roughly 50 percent as many customers as Maui or the Big Island, and only 12 percent as many as Oahu and increased costs from Hurricane Iniki. 6 THINKING BEYOND THE BARREL

9 STRATEGIC PLAN KIUC has 116 megawatts (MW) of firm, net generating capacity, and more than half of those generators (59 MW) were installed over 30 years ago, making them candidates for replacement in the near future. Historically, KIUC has maintained enough firm generating capacity to meet the total peak customer demand with the largest unit out of service, and the morning peak customer demand with the largest and third largest units out of service. The all-time peak demand on the KIUC system is 77 MW, and the largest units are Kapaia s CT-1 (27.5 MW), Port Allen s GT-2 (22.6 MW) and Port Allen s GT-1 (17.5 MW). Hawai i s Renewable Portfolio Standard (RPS) mandates cost-effective renewable energy development with goals of 10 percent renewable net electricity sales by 2010, 15 percent by 2015, and 20 percent by In 2006, 8.2 percent of KIUC supplyside electrical generation was from renewable sources. Adding demand-side energy savings to this number brings the total to 13.9 percent. Focusing on supply-side only, significant additional renewable generation is required to meet 20 percent by Potentially more significant than Hawai i s RPS requirement, is Hawai i s Greenhouse Gas (GHG) legislation, which requires a reduction in GHG emissions to 1990 levels by This requirement may effectively exceed the RPS. For example, KIUC s 2020 load is projected to be roughly double what it was in 1990; therefore, KIUC would be required to generate 50 percent of its energy from carbon-neutral or non-carbon sources. This may seem like an effective increase of the RPS, but other solutions such as improved efficiency, demand side management, and carbon cap and trade could help meet GHG targets while not counting toward the RPS. In any case, it is prudent for KIUC to install generators that are, or have the ability to be, carbon-neutral. KIUC 2007 ANNUAL REPORT 7

10 STRATEGIC PLAN KIUC has 161 miles of 69 kilovolt (kv) transmission lines and 1,202 miles of 12 kv distribution lines. Approximately 215 miles of distribution lines are underground. While under-grounding lines may provide improved aesthetics and resistance to wind and trees, they come with higher cost and the potential for longer power outages upon failure due to the difficulty in locating and repairing faults. KIUC is implementing a hardening plan that will improve service reliability for the island s critical infrastructure. This plan includes under-grounding portions of distribution circuits. Transmission reliability is an area of concern for KIUC. Generating capacity is expected to shift from Port Allen to Kapaia and elsewhere. Transmission line capacity and redundancy need to be reviewed. Most of the island is served by at least two transmission lines. The far west side (Mana & PMRF) and the north shore (Kīlauea to Hā ena) rely on only one transmission line each. An initiative is under way to install fiber optic communication links between substations and protective devices that will greatly reduce transmission fault clearing times, and improve the overall coordination of system protective devices. Historical reliance on energy produced by the sugar mills provided numerous benefits: renewable energy from bagasse and hydro, high-inertia turbine generators and interruptible mill loads. The last two of these resulted in good system reliability for customers of KE high inertia to ride through electrical faults caused by events such as lightning strikes or auto accidents, and interruptible loads so that residential and commercial customers were protected from load shedding required when demand exceeded supply. 8 THINKING BEYOND THE BARREL

11 STRATEGIC PLAN KIUC Mission The mission of KIUC is to provide high quality, reliable, and competitively valued electric service, in a safe, environmentally responsible manner, consistent with sound business practices and the seven cooperative principles, and to improve the quality of life for members and for Kaua i. Seven Cooperative Principles Voluntary and open membership Democratic member control Members economic participation Autonomy and independence Education, training and information Cooperation among cooperatives Concern for community Strategies A. Deliver power safely B. Improve reliability C. Increase sustainable power supply D. Ensure fair and competitive rates E. Improve Member satisfaction F. Improve Employee satisfaction G. Cultivate a strong and effective Board/Staff team Strategic Objectives The diagram above shows the three core strategic objectives for KIUC: delivering safe and reliable electrical service, achieving a high standard of sustainability with regard to power supply and providing fair and competitively-valued rates. KIUC recognizes that these strategic objectives need to be balanced; focusing too heavily on one area may have negative effects on another. Making progress toward these strategic objectives will require effective communication and alignment between Members, Directors and Employees of the cooperative. From these objectives, we derive our strategies. KIUC 2007 ANNUAL REPORT 9

12 STRATEGIC PLAN Measures of Success STRATEGY GOAL MEASUREMENT A. Deliver power safely B. Improve reliability C. Increase sustainable power supply D. Ensure fair and competitive rates E. Improve Member satisfaction F. Improve Employee satisfaction G. Cultivate a strong and effective Board/Staff team 1. Achieve better-than-average of industryspecific national safety incident rate 2. Improve safety culture 1. Achieve better than average of Hawai i utilities in outage frequency and duration 2. Maintain sufficient firm, reliable generation to meet customer demand 3. Evaluate spinning reserve or other options that could reduce generation outages 1. Significantly exceed Hawai i Renewable Portfolio Standard (RPS) 2. Reduce electric power generation sector greenhouse gas (GHG) emissions to 1990 levels 3. Increase energy diversity so that no one source amounts to 50% or more of total energy supply 4. Increase conservation and demand-side management 1. Maintain reasonable, comparable rates with other Hawai i utilities 2. Maintain costs at or below inflation 1. Develop proactive and comprehensive methods of communicating and obtaining feedback to and from Members 2. Improve results in major areas of member concern 3. Improve communication to members during power outages Improve results in employee satisfaction measures Improve trust and confidence between Board, Staff and Employees Annual OSHA incident rate for electric power generation, transmission and distribution, employees Rural Electric Safety Accreditation Program (RESAP) Certification System Average Interruption Frequency Index (SAIFI), and Customer Average Interruption Duration Index (CAIDI) Annual adequacy of supply statement Production-only System Average Interruption Duration Index (SAIDI) Supply-side only, annual kwh generated from renewable sources Annual tons of CO 2 equivalent from power generation Annual kwh generated from any one source Annual kwh saved through conservation and DSM Average annual residential rate Non-fuel O&M expense per Member Member participation and knowledge Periodic Member surveys On-demand automated outage information for members Periodic Employee surveys Periodic evaluations 10 THINKING BEYOND THE BARREL

13 FINANCIALS KIUC 2007 ANNUAL REPORT 11

14 FINANCIALS Summary of Operations For the period 01/01/2007 through 12/31/2007 We are pleased to report that the KIUC results of operations through December 31, 2007 remained strong. Total revenues, expenses, and net margins totaled $163.0 million, $151.1 million, and $11.9 million, respectively, for the twelve-month period ending December 31, As is the case for all electric utilities, the cost of power generation is the largest expense, totaling $93.0 million or 57.1% of revenues. Fuel costs are the largest component of power generation, totaling $81.0 million or 49.7% of revenues, and representing 87.1% of the cost of power generation. The remaining $12.0 million or 7.4% of revenues and 12.9% of the cost of power generation, represents the cost of operating and maintaining the generating units. The cost of operating and maintaining the electric lines totaled $4.8 million or 2.9% of total revenues. The cost of servicing our members totaled $3.4 million or 2.1% of revenues. Administrative and general costs, which include marketing and communications, legislative and regulatory expenses, engineering, financial and corporate services, and board of directors expenses, totaled $11.3 million or 6.9% of revenues. Being very capital intensive, depreciation and amortization of the utility plant costs $16.2 million or 9.9% of revenues. Although not subject to federal income taxes, state and local taxes amounted to $13.8 million or 8.4% of revenues. Interest on long-term debt, at a very favorable sub-5% interest rate, totals $10.2 million or 6.2% of revenues. Non-operating net margins added $1.5 million to overall net margins. Revenues less total expenses equal margins of $11.9 million or 7.3% of total revenue. Margins are allocated to consumer members and paid when appropriate. The financial benefit (direct and indirect) to KIUC members is significant. Since 2002, KIUC has returned $20.7 million to members in the form of Patronage Capital Refunds and billing credits. This includes $3.0 million Patronage Capital Refunds to be paid in 2008 that are attributable to 2007 margins. In addition, the indirect financial benefits (i.e., ownership) include patronage capital that is held by KIUC on behalf of its members to be distributed at future dates as determined by the KIUC Board of Directors. This amounts to $38.7 million in indirect financial benefits to KIUC members as of December 31, THINKING BEYOND THE BARREL

15 BALANCE SHEET DECEMBER 31, 2007 AND 2006 ASSETS December 31, UTILITY PLANT AT COST Electric Plant in Service $ 357,806,314 $ 348,946,656 Electric Plant Acquisition Cost 54,852,453 54,852,453 Construction Work in Progress 14,020,468 6,922, ,679, ,722,023 Less: Accumulated Provision for Depreciation and Amortization 186,628, ,156, ,051, ,565,144 OTHER PROPERTY AND INVESTMENTS Non-Utility Plant 758,612 Investments in Associated Organizations 281, ,473 Other Investments 2,125,902 3,539,102 2,407,716 4,550,187 CURRENT ASSETS Cash 10,014,429 3,998,025 Cash Restricted 429, ,000 Temporary Cash Investments 6,593,744 14,993,828 Accounts and Notes Receivable (Less allowance for uncollectibles of $905,492 in 2007 and $307,143 in 2006) 11,378,102 10,442,659 Materials and Supplies 12,164,292 10,047,261 Energy Rate Adjustment Clause 613,515 Accrued Unbilled Revenue 9,181,212 6,956,525 Other Current and Accrued Assets 1,131,758 1,007,022 51,506,907 47,805,320 DEFERRED CHARGES 5,242,460 6,567,887 TOTAL ASSETS $ 299,208,241 $ 296,488,538 EQUITIES AND LIABILITIES EQUITIES AND MARGINS Memberships $ 349 $ 325 Patronage Capital 41,674,804 32,129,731 Other Equity 16,806 2,120 Unrealized Gain (Loss) on Available-For-Sale Investments 35,135 (28,512) Other Comprehensive Loss (403,200) 41,323,894 32,103,664 LONG -TERM DEBT RUS Mortgage Notes Less Current Maturities 180,640, ,462,928 FFB Mortgage Notes Less Current Maturities 29,219,628 30,627,818 CFC Mortgage Notes Less Current Maturities 6,534,266 6,893, ,394, ,984,068 ACCUMULATED PROVISION FOR PENSION AND BENEFITS Postretirement Benefits 4,003,700 3,758,600 4,003,700 3,758,600 CURRENT LIABILITIES Current Maturities of Long-Term Debt 8,178,300 7,944,800 Accounts Payable 7,605,248 7,810,637 Energy Rate Adjustment Clause 2,882,109 Consumer Deposits 759, ,607 Accrued Employee Compensation 1,588,479 1,496,186 Accrued Taxes 8,287,200 6,692,436 Other Current and Accrued Liabilities 179, ,879 26,598,140 27,994,654 DEFERRED CREDITS 10,887,832 10,647,552 TOTAL EQUITIES AND LIABILITIES $ 299,208,241 $ 296,488,538 KIUC 2007 ANNUAL REPORT 13

16 Statement of Income and Patronage Capital For the years ended December 31, 2007 and 2006 Years Ended December 31, Increase Amount % Amount % (Decrease) OPERATING REVENUES Residential $ 58,823, $ 52,568, $ 6,254,629 Irrigation 344, , ,276 Commercial and Industrial 102,429, ,930, ,499,040 Public Street and Highway Lighting 1,286, ,195, ,875 Other Operating Revenues 163, , (1,694) Total Operating Revenues 163,047, ,049, ,998,126 OPERATING EXPENSES Power Cost 93,036, ,651, ,384,955 Transmission - Operation 566, , ,982 Transmission - Maintenance 651, , ,860 Distribution - Operation 1,492, ,457, ,477 Distribution - Maintenance 2,049, ,947, ,773 Customer Accounts 2,604, ,071, ,763 Customer Service and Information 598, , ,384 Sales 224, , (52,376) Administrative and General 11,300, ,774, ,403 Depreciation and Amortization 16,207, ,898, ,719 Taxes 13,763, ,370, ,393,425 Total Operating Expenses 142,495, ,031, ,463,365 OPERATING MARGINS - Before Fixed Charges 20,552, ,018, ,534,761 FIXED CHARGES Interest on Long-Term Debt 10,226, ,465, (238,846) OPERATING MARGINS - After Fixed Charges 10,325, ,552, ,773,607 Capital Credits 67, , ,073 NET OPERATING MARGINS 10,393, ,615, ,778,680 NONOPERATING MARGINS Interest Income 1,458, ,462, (3,365) Other Nonoperating Income (Expense) 13, , (27,144) 1,472, ,502, (30,509) NET MARGINS 11,866, ,117, $ 2,748,171 COMPREHENSIVE INCOME Unrealized Gain (Loss) on Available for Sale Securities 63,647 16,913 Adjustment for Initial Application of FASB Statement No. 158 (400,300) COMPREHENSIVE INCOME 11,529,378 9,134,773 Less: Unrealized Gain (Loss) on Available for Sale Securities (63,647) (16,913) Less: Adjustment for Initial Application of FASB Statement No ,300 INCREASE IN PATRONAGE CAPITAL 11,866,031 9,117,860 PATRONAGE CAPITAL - BEGINNING OF YEAR 32,129,731 25,817,712 Patronage Capital Retired (2,320,958) (2,805,841) PATRONAGE CAPITAL - END OF YEAR $41,674,804 $32,129, THINKING BEYOND THE BARREL

17 Statement of Cash Flows For the years ended December 31, 2007 and 2006 December 31, CASH FLOWS FROM OPERATING ACTIVITIES Net Margins $ 11,866,031 $ 9,117,860 Adjustments to Reconcile Net Margins to Net Cash Provided by (Used in) Operating Activities Depreciation and Amortization 16,526,454 16,069,354 Capital Credits (67,934) (62,861) Deferred Charges 1,325,427 (42,485) Deferred Credits 240,280 1,442,273 Accounts and Notes Receivable (1,548,958) (2,476,267) Inventories and Other Current Assets (4,466,453) (326,068) Post Retirement Benefit Obligations (158,100) (142,200) Payables and Accrued Expenses (1,630,014) 4,681,761 Net Cash Provided by Operating Activities 22,086,733 28,261,367 CASH FLOWS FROM INVESTING ACTIVITIES Additions to Utility Plant (18,641,879) (15,036,407) Plant Removal Cost Over Salvage and Other Credits (370,589) (342,403) Other Property and Investments 2,274,052 2,474,237 Net Cash Used in Investing Activities (16,738,416) (12,904,573) CASH FLOWS FROM FINANCING ACTIVITIES Payments on Long-Term Debt to RUS (6,235,176) (6,013,643) Payments on Long-Term Debt to CFC (349,857) (340,906) Payments on Long-Term Debt to FFB (1,361,290) (970,882) Advance Payments to RUS 2,590,429 (559,388) Memberships Other Equities 14,686 Retirement of Patronage Capital (2,320,958) (2,805,841) Net Cash Used in Financing Activities (7,662,142) (10,690,637) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,313,825) 4,666,157 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 19,351,853 14,685,696 CASH AND CASH EQUIVALENTS - END OF YEAR $ 17,038,028 $ 19,351,853 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest on Long-Term Debt $ 10,167,302 $ 10,417,267 Income Taxes $ 38,250 $ 30,920 KIUC 2007 ANNUAL REPORT 15

18 Net Margins 7.3% Interest 6.2% Taxes 8.4% Depreciation & Amortization 9.9% Fuel Cost 49.7% Administrative & General Net of Non-Operative Margins 6.1% Member Services 2.1% Transmission & Distribution Operation & Maintenance 2.9% Production Operation & Maintenance 7.4% Twelve-month period ending December 31, 2007 Total Revenue $ 163,047,795 Fuel Cost ,998,385 Production Operation & Maintenance ,038,311 Transmission & Distribution Operation & Maintenance ,758,914 Member Services ,426,946 Administrative & General Net of Non-Operative Margins. 9,820,359 Depreciation & Amortization... 16,207,749 Taxes ,763,798 Interest ,167,302 Net Margins ,866, THINKING BEYOND THE BARREL

19 The sun is thought to be 4.6 billion years old. It took mankind 125 years to use the first trillion barrels of oil. It will take only 30 years to use the next trillion. It is estimated that the sun will last another 5 billion years. THINK BEYOND THE BARREL...

20 SEVEN COOPERATIVE PRINCIPLES Voluntary and Open Membership Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination. Democratic Member Control Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner. Members' Economic Participation Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. Autonomy and Independence Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy. Education, Training, and Information Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation. Cooperation Among Cooperatives Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures. Concern for Community While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members Pahe e Street, Suite 1, Lihue, HI KIUC is an equal opportunity provider and employer.