Cooperatives have strong ties to their consumer-members.
Rural electrification came about in thespirit of cooperation, and electric cooperatives play a vital role in the state today. As an electric cooperative member, here are five key points you should know about your co-op that sets it apart.

1) You are a consumer-member
Electric cooperatives are owned and democratically controlled by their members – the people who purchase the power. With voting power, you have a voice in how your co-op operates, by attending annual meetings and electing directors to represent you.

2) Consumer-members earn capital credits
An electric cooperative exists to provide its members with electric service – on a nonprofit basis. Capital credits reflect each member’s ownership in the coop. Electric cooperatives do not earn profits. Instead, based on a member’s electrical use, the remaining revenue after all expenses are paid will be returned to the member.

Capital credits are allocated to each member based on electrical usage. Those capital credits are the most significant source of equity for the cooperative. Equity is used to help meet the expenses of the co-op, such as paying for new equipment to serve members and repaying debt. Capital credits help keep rates at an affordable level by reducing the amount of funds that must be borrowed to grow and maintain a cooperative’s existing electric system. Upon completion of the rotation period, the board of directors will review the cooperative’s financial health and can declare a retirement (your cash payment), and a portion of your capital credits are returned to you.

3) Your cooperative is nonprofit
Electric cooperatives developed because many citizens who did not have access to electricity in the 1940s decided to band together and form their own companies to acquire power. Investor-owned power companies said they couldn’t make a profit in areas with a small number of consumers per mile of expensive power line.

The cooperative business structure was already a well-established part of the American free enterprise system for providing services that were too big for individuals to do alone. Nonprofit cooperatives were natural for distributing electricity in areas where making a profit would be difficult. A co-op exists to provide high-quality service at the lowest possible price to its members.

4) You elect the directors
Since members own the electric cooperative that serves them, members elect representatives to the board. Members maintain democratic control of a co-op, which means they elect fellow members to represent them on the board of directors.

5) Your cooperative cares about your community
North Dakota’s electric cooperatives are continually involved in the communities they serve, from delivering more power to the oil boom to offering scholarships to college-bound students. As one narrator notes: “When the electric co-ops were born, something much bigger happened. For when we turned the lights on, we helped democratize the American dream for the people, families, farms, ranches, and businesses of rural America.”

That dream continues as cooperatives help develop the communities they serve.