Electric cooperatives are private, not-for-profit businesses governed by their consumers (known as consumer-members). Two federal requirements for all co-ops, including electric co-ops, are democratic governance and operation at cost. Specifically, every consumer-member can vote to choose local boards that oversee the co-op, and the co-op must, with few exceptions, return to consumer-members revenue above what is needed for operation. Under this structure, electric co-ops provide economic benefits to their local communities rather than distant stockholders.
The majority of co-ops distribute electricity to consumers through low-voltage residential lines that cover more than 75 percent of the nation’s land mass. Many of these distribution co-ops, as they’re called, have joined to create co-ops that provide them with generation and transmission services. Distribution co-ops also buy power from investor-owned utilities, public power systems, federal hydropower power marketing administrations and the Tennessee Valley Authority.