How Cooperatives Work
What is an electric cooperative?
- Electric cooperatives are privately owned businesses established to supply electricity to their member-owners.
- Electric co-ops are owned by the people who use the power the co-op provides. Its customers are also its owners.
- Electric co-ops operate on a not-for-profit basis, with excess margins returned to the consumer either in the form of patronage capital or in stable rates.
- Electric co-ops are governed by a board of directors elected from the membership.
- Any member may run for the board and all members are asked to participate in an annual membership meeting at which board members are elected.
- Electric co-ops adhere to the seven guiding principles of all cooperatives: Voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, cooperation among cooperatives and concern for community.
Co-Mo’s three-tiered system
Missouri has a well-defined and well-run system of electric cooperatives that generate, transmit and distribute electric service to the rural residents of the state.
- Our power is generated by Associated Electric Cooperative Inc., based in Springfield, Mo. Associated generates power to serve 51 distribution cooperatives in Missouri, southern Iowa and northeast Oklahoma.
- That power is transmitted throughout Missouri by six transmission cooperatives. Our regional transmission cooperative is Central Electric Power Cooperative, based in Jefferson City, Mo., which owns and maintains the substations that serve our system.
- The electricity is delivered directly to the members of Missouri by 40 distribution cooperatives. Co-Mo Electric is a distribution cooperative.
The Seven Cooperative Principles
Adherence to the Seven Cooperative Principles is what makes cooperatives different.
- Voluntary and Open Membership: Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
- Democratic Member Control: Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
- Member Economic Participation: Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefitting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
- Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
- Education, Training and Information: Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of the cooperative.
- Cooperation Among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through their local, regional, national and international structures.
- Concern for Community: While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.