WHAT IS A CO-OP ANYWAY?

Discovering the differences that make us unique

By Brianna Wall

You might hear us talk often about “the cooperative difference”, but what exactly does that mean? While our business model is different from that of other utility providers, that’s not the only thing that sets us apart. Electric cooperatives play a unique and essential role in providing reliable and affordable electricity to millions of Americans. Unlike investor-owned utilities (IOUs) or municipal utilities, electric cooperatives operate under a business model rooted in community service, not profit maximization. This fundamental difference influences every aspect of how cooperatives function, making us distinct from other utility providers in several key ways.

Member Ownership and Democratic Governance

One of the most significant aspects that set electric cooperatives apart is our ownership structure. Rather than being owned by shareholders who may not even be customers, electric cooperatives are owned by the people they serve. Each member of a cooperative is not just a customer but also a part-owner of the organization. This ownership structure comes with a democratic governance model, meaning members have a direct say in how their cooperative operates, regardless of how much electricity they use. This ensures that decision-making remains focused on the needs of the community rather than outside investors looking for financial returns.

Not-for-Profit Model

Electric cooperatives operate as not-for-profit entities. While they must generate revenue to cover operating costs, any excess revenue—known as margins—is either reinvested into the cooperative to improve service or returned to members in the form of capital credits. Because cooperatives do not seek to maximize profits, they can focus on keeping electricity rates as low as possible for their members. This community-first approach ensures that the cooperative’s primary goal is service, not shareholder dividends.

Commitment to Rural America

Electric co-ops were born out of necessity. Before the 1930s, many rural communities were left in the dark because extending electricity to these areas was not considered profitable by other utilities. The Rural Electrification Act of 1936 helped establish electric cooperatives to bring power to rural America, transforming communities and improving quality of life.

Today, we continue to serve some of the most remote and underserved regions in the country.

Local Control and Community Focus

Because cooperatives are community-owned and locally controlled, they are highly responsive to the needs of their members. Decisions are made by people who live in the communities they serve, ensuring that priorities align with local needs rather than the demands of distant corporate headquarters.

This local focus allows cooperatives to be more flexible and innovative in addressing challenges unique to their regions. Whether it’s developing programs to help members manage their energy use, investing in renewable energy projects tailored to local resources, or responding quickly to service disruptions, cooperatives prioritize the well-being of their communities above all else.

Reliability and Member Service

We pride ourselves on providing reliable electricity and excellent member service. Because we are communitybased, we are often able to restore power more quickly after outages than larger utilities with more bureaucratic layers. Employees live and work in the communities we serve, which means we have a personal stake in maintaining reliable service.

Additionally, cooperatives emphasize member education and engagement. We offer energy efficiency programs, provide resources to help members manage their electricity bills, and work to keep members informed about industry trends and policy changes that could impact them.

Click here to read how co-ops promote innovation, sustainability and community development, and how our nationwide network means stronger support for you — our members!