Consultation on FCA plans to prevent renewable energy co-ops – Posted by Trish

Financial Conduct Authority refuses to allow creation of new renewable energy co-ops – please respond to consultationWestmill energy farm cooperative : wind turbines and solar panels community ownership

The Financial Conduct Authority (FCA) is currently consulting on new guidance relating to the registration of new co-operatives including renewable energy co-operatives.  This consultation follows a change of approach by the FCA dating from the Spring of this year when they started to reject applications to register new renewable energy co-ops.  Since the Spring a significant number of new Co-operative Societies (previously often known as members co-ops) have been refused registration. To date the problem has not affected Community Benefit Societies (previously known as bencoms).

The reason for this is that the FCA has unilaterally decided that renewable energy co-ops in England, Wales and Scotland are not legitimate co-operatives as they do not directly trade with  their members.   In fact there is no requirement in the 7 principles of the International Co-operative Alliance on co-operatives to trade with their members and in the UK the very tight and highly complex regulatory requirements of the energy supply industry effectively prevents co-ops selling electricity directly to its members.

Renewable energy co-ops are a force for good and a force for change and should be encouraged, not obstructed in this way.  Wider use of the cooperative model can make an important contribution to changes in energy production and consumption which will help democratise the ownership of energy, reduce energy prices, support communities and increase the production of renewable energy which is such a vital tool in the fight against climate change.

The consultation on these matters closes on 28 November 2014.  You can read the document here http://www.fca.org.uk/news/cp1422-guidance-on-the-fcas-registration-function-under-the-cooperative-and-community-benefit-societies-act-2014. Please participate in this consultation and make sure your views are heard.

Send a simple message to the FCA: renewable energy co-ops are a good thing and there should be more of them.  The FCA should register any co-operative that complies with  the international principles of co-operation and not impose additional constraints, such as requiring Co-operative Societies to trade directly with their members.

The 7 co-operative principles by which co-operatives put their values into practice as set out on the official website of the International Co-operative Alliance
1. Voluntary and Open Membership
Co-operatives are voluntary organisations, 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.
2. Democratic Member Control
Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.
3. Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. 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 their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4. Autonomy and Independence
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5. Education, Training and Information
Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
6. Co-operation among Co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7. Concern for Community
Co-operatives work for the sustainable development of their communities through policies approved by their members.

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