A utility cooperative is a type of

cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...

that is tasked with the delivery of a

public utility A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and r ...

such as

electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as described ...

water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...

telecommunications Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...

to its members. Profits are either reinvested for

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...

or distributed to members in the form of "patronage" or "capital credits", which are

dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-in ...

s paid on a member's

investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

in the cooperative. Each

customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...

is a member and owner of the business. This means that all members have equal individual authority, unlike investor-owned utilities where the extent of individual authority is governed by the number of shares held. Like cooperatives operating in other sectors, many utility cooperatives conduct their affairs according to a set of ideals based on the

Rochdale Principles The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England and have formed the basis for the principles on which co-operativ ...

. Some utility cooperatives respect the seventh principle, ''Concern for community'', through ''Operation Roundup'' schemes, whereby members can voluntarily have their bill rounded to the next currency unit (e.g. $55.37 becomes $56), with the difference (e.g. 63¢) distributed to a fund for local charities. Many such cooperatives exist in the

rural United States Rural areas in the United States, often referred to as rural America, consists of approximately 97% of the United States' land area. An estimated 60 million people, or one-in-five residents (17.9% of the total U.S. population), live in rural Ame ...

and were created by the

New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Cons ...

to bring electric power and

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

service to

rural In general, a rural area or a countryside is a geographic area that is located outside towns and cities. Typical rural areas have a low population density and small settlements. Agricultural areas and areas with forestry typically are describ ...

areas, when the nearest investor-owned utility would not provide service since it believes that there would be insufficient revenue to justify the capital expenditures required. Many electric cooperatives have banded together to form their own wholesale power cooperatives, often called G&Ts for "generation and transmission", to supply their member-owners with electricity. Many utility cooperatives strive to bring the best service at the lowest possible cost, but the high cost of maintaining the infrastructure that is needed to cover large rural areas without the support of large cities as a rich customer base often causes high prices. However, a few such co-ops have managed to tap into urban markets because of growth into previously rural territory served by the co-ops, and they have proven to be very cost-effective. More recently, established energy co-ops have offered with national coverage.

Co-operative Energy Co-op Energy is a British energy supply company based in Warwick that began trading in 2010. It sells renewable electricity (some from community-owned sources) and gas to its ethically concerned member owner/customers and is a established large o ...

in the United Kingdom and Enercoop in France are examples of

consumer cooperative A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members. Such co-operatives operate within the market system, independently of the state, as a fo ...

s. Other co-ops have formed to concentrate on the generation of renewable energy, especially

wind energy co-operative Community wind projects are locally owned by farmers, investors, businesses, schools, utilities, or other public or private entities who utilize wind energy to support and reduce energy costs to the local community. The key feature is that local c ...

Electric cooperatives

North America

There are two types of electric cooperatives: distribution cooperatives and generation and transmission (G&T) cooperatives. Distribution electric cooperatives serve end-users, such as residences and businesses, who make up their membership. Generation and transmission cooperatives typically sell wholesale power to distribution cooperatives and are

cooperative federation A co-operative federation or secondary co-operative is a co-operative in which all members are, in turn, co-operatives. Historically, co-operative federations have predominantly come in the form of co-operative wholesale societies and co-operative ...

s owned by their member co-ops.

Naming

Most electric cooperatives in the United States include the phrase "electric cooperative" in their name, which makes it easy to identify their organization. Most cooperatives have a name that identifies or explains some aspect of their service area. For example, Bluebonnet Electric Cooperative in Texas is named after the Bluebonnet which grows naturally in its service area. Lyntegar Electric Cooperative, also in Texas, is named for the three original counties that came together to organize it, Lynn County, Terry County, and

Garza County Garza County is a county located in the U.S. state of Texas. As of the 2020 census, its population was 5,816, of which most of the population were residing in Its county seat, and only incorporated municipality, Post. The county was created ...

, and

A&N Electric Cooperative A&N Electric Cooperative (ANEC) is a utility cooperative that distributes electricity to Accomack and Northampton counties in the state of Virginia along with Smith Island in Maryland, in the southern portion of the Delmarva Peninsula. The cooper ...

in Virginia, is named so because it serves Accomack County and Northampton County. For years after the

Rural Electrification Administration The United States Rural Utilities Service (RUS) administers programs that provide infrastructure or infrastructure improvements to rural communities. These include water and waste treatment, electric power, and telecommunications services. it is ...

was established, many rural residents in the US called cooperatives "REA", regardless of their actual name, and would in turn say they were served by REA instead of the cooperative name if asked who their electric provider was. Today, some cooperatives, either by choice or by the guidance of state charter laws, carry a variation of the cooperative name. These include: *Electric Cooperative Association *Electric Membership Cooperative (EMC) - used in many states, such as Indiana, North Carolina, Georgia, Tennessee, and Alabama *Electric Power Association (EPA) - mainly used in Mississippi *Energy Cooperative *Power Cooperative *Rural Electric Association *Rural Electric Cooperative *Rural Electric Cooperative Corporation (RECC) - mainly used in Kentucky *Rural Electric Membership Corporation (REMC) Several states have another variation of the utility cooperative, known as Public Power Districts (PPDs) in Nebraska and Public Utility Districts (PUDs) in Oregon and Washington. In both cases, the laws that created these "quasi-cooperative" utilities were created with the specific intent of taking over territory being served by privately owned power companies in those states. Nebraska's conversion from a mixture of power companies serving the state to a public power empire spanned the 1940s (the last privately owned utility line into the state being cut on December 29, 1949), with the creation of the PUDs in the Pacific Northwest starting about the same time and continuing with varying degrees of success over the following two decades. The key difference between a PPD/PUD and a cooperative is that PPDs/PUDs are publicly controlled by residents of a state or local area and run more like a municipal power system than a cooperative system. A cooperative is owned and operated by the customers they serve within their designated service area. Cooperative owners have voting rights to elect the cooperative's board members each year and generally have more say in the operations than other utility forms.

Peer associations

Small cooperatives often band together to achieve

economies of scale In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...

, share expertise and stand together on regulatory issues. There are several statewide (and in Canada, province-wide) associations of cooperatives, including Kentucky and Nova Scotia. A cooperative of cooperatives, in which several smaller level cooperatives come together to form a bigger higher level cooperative, is called the secondary cooperative. Secondary cooperative is different from the association. Cooperative of secondary cooperative is called tertiary cooperatives. For example, each village may have a village level cooperative. Several village cooperatives may form a district level secondary cooperative in which village level cooperatives have a share. Several district level cooperatives may form a state level tertiary cooperative, and so on.

Europe

In 2013, REScoop, a European federation of energy co-operatives, both producers' and consumers', was launched. It has 11 members in seven countries. In the UK,

was established in 2010 by

Midcounties Co-operative The Midcounties Co-operative, branded as Your Co-op, is a consumer co-operative in the United Kingdom with over 700,000 members. Registered in England under the Co-operative and Community Benefit Societies Act 2014, it is a member of Co-opera ...

and supplies electricity and gas across the country.

Philippines

Electricity in most provinces of the Philippines are served by cooperatives, and all belong to the distribution sector, which serve the end customers, who own the cooperative themselves. Electric cooperatives in the Philippines are overseen by the government through the

National Electrification Administration The National Electrification Administration (NEA; fil, Pambansang Pangasiwaan ng Elektripikasyon) is a government-owned and controlled corporation (GOCC) attached to the Department of Energy of the Philippines tasked in the full implementation ...

(NEA), and rates set by the cooperatives are regulated by the Energy Regulatory Commission (ERC), an agency belonging to the

Department of Energy A Ministry of Energy or Department of Energy is a government department in some countries that typically oversees the production of fuel and electricity; in the United States, however, it manages nuclear weapons development and conducts energy-rel ...

(DOE).

Telephone cooperatives

Telephone cooperatives have today expanded beyond their historical role of providing fixed line

services, by also offering

broadband In telecommunications, broadband is wide bandwidth data transmission which transports multiple signals at a wide range of frequencies and Internet traffic types, that enables messages to be sent simultaneously, used in fast internet connections. ...

and often

cable TV Cable television is a system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables, or in more recent systems, light pulses through fibre-optic cables. This contrasts with broadc ...

services (via

DSL Digital subscriber line (DSL; originally digital subscriber loop) is a family of technologies that are used to transmit digital data over telephone lines. In telecommunications marketing, the term DSL is widely understood to mean asymmetric dig ...

coaxial cable Coaxial cable, or coax (pronounced ) is a type of electrical cable consisting of an inner conductor surrounded by a concentric conducting shield, with the two separated by a dielectric ( insulating material); many coaxial cables also have a p ...

optical fibre An optical fiber, or optical fibre in Commonwealth English, is a flexible, transparent fiber made by drawing glass (silica) or plastic to a diameter slightly thicker than that of a human hair. Optical fibers are used most often as a means to ...

), and mobile/wireless services.

United Kingdom

The UK has a single telephone co-operative,

The Phone Co-op The Phone Co-op was an independant consumer co-operative in the United Kingdom until 2018, when facing serious financial difficulties, it transfered itself into a sister society, where it remains today. It provides landline, mobile telephone a ...

, which provides fixed, mobile telephone and internet services, including web hosting and broadband. It is 100% owned by its customer-members who democratically control the business and who share in its profits. The co-op is a social enterprise and was awarded the title of UK customer-facing social enterprise of the year 2015. The business is a living wage employer and is accredited to hold the Fair Tax Mark. It has over 30,000 customers.

United States

There are approximately 260 telephone cooperatives in the US, together employing approximately 23,000 and annual revenues of $3.9B. Many were formed during the

in the 1930s, but some date to the turn of the 20th century. Most operate only one or a small number of exchanges, typically as an Incumbent Local Exchange Carrier (ILEC), but some have become regional players through merger and now operate as

Competitive Local Exchange Carrier A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company (sometimes called a " carrier") competing with other, already established carriers, generally the incumbent local exchange carrie ...

s (CLEC).

References

External links

National Rural Electric Cooperative Association
the national trade association of electric cooperatives

a national branding association of U.S. energy utility co-ops {{DEFAULTSORT:Utility Cooperative Public utilities