The Cooperative Difference
Electric Cooperatives Are…
- Private independent electric utility businesses
- Incorporated under the laws of the states in which they operate
- Established to provided at-cost electric service
- Owned by the consumers they serve
- Governed by a board of directors elected from the membership from the membership, which sets policies and procedures that are implemented by the cooperatives’ professional staff
- Most electric co-ops are distribution cooperatives that deliver electricity to the consumer. Some are generation and transmission cooperatives (G&Ts) that both generate and transmit electricity to meet the power needs of distribution cooperatives.
- In addition to electric service, many electric co-ops are involved in community development and revitalization projects, e.g., small business development and job creation, improvement of water and sewer systems, and assistance in delivery of health care and educational services.
What Makes Cooperatives Different?
- Cooperatives are operated to provide at-cost electric service to their consumer-members as compared to investor-owned utilities, which are operated to maximize profit for the shareholders.
- A co-op’s net margin above expenses and reserves does not belong to the utility; it belongs to the individual consumer-members of the co-op. The margins must either be used to improve or maintain operations or be distributed to the co-op’s consumer-owners.