Co-Op Differences

A cooperative is a nonprofit enterprise or organization jointly owned and equally controlled by those using its services for mutual benefit. Customers who receive service are members of the cooperative and, as such, share responsibility for its success or failure along with the benefits they receive.

As democratic institutions, electric cooperatives afford a large number of people-the member-owners-an opportunity to take part in the decision-making of their cooperative’s business. All member-owners participate in the operation of the cooperative through their votes. Each member is entitled to one vote in cooperative elections. This process ensures that cooperative members have controlling authority over the cooperative’s board of directors. The one-member, one-vote concept is not only a right of cooperative members, it is a responsibility.

Power companies, by contrast, are controlled by stockholders who, for the most part, do not live in the service territory of the company. Stockholders and customers have quite different interests. The owner of share of stock quite rightly wants larger dividends and an increase in the market value of the stock. The customer, on the other hand, wants lower rates and better service.

In actual operation, the cooperative conducts its business much the same as any other electric utility. Its difference lies in the ownership and how the wishes of these owners are carried out.