A Different Kind of Business

A cooperative is a not-for-profit business that is owned and controlled by the people who use its products, supplies or services. These co-ops are governed by a board of directors elected from the membership which sets policies and procedures that are implemented by the cooperatives’ management. 

Electric cooperatives originally formed in the 1930’s to bring electricity to rural areas when investor-owned utilities refused to serve these regions because there was little profit to be made. Local farmers and residents worked together to establish rural electric cooperatives. Unlike investor-owned utilities, an electric cooperative is operated by and for the members it serves. The goal is to provide safe, reliable power, not make a profit. There are currently more than 900 cooperatives in 47 states providing power to large and small communities across the United States.

Although cooperatives vary in type and membership size, all were formed to meet the specific objectives of members, and are structured to adapt to member's changing needs. What makes co-ops unique is that the members are also the owners. So, in addition to receiving the products and services you need, you also have a say in the operation of the business and are encouraged to attend annual meetings, participate in the voting of your board members, and share thoughts and concerns regarding the company.

Member-owners of a cooperative are allocated capital credits based on their purchases from the company the previous year. These allocations are used as the operating income of the cooperative for a period of time. This money is used for reliability improvements, maintenance projects, reserves on-hand in case of emergency, and to avoid borrowing money as much as possible. When the board decides it is financially feasible, a portion of these capital credits will be retired to the eligible member-owners.