Benefits of Electric Co-ops

Today, more than ever, people want to purchase products and services from organizations that contribute to the greater good. Consumer-owned electric cooperatives lead the way — we have focused on benefiting our communities since electric co-ops were first formed in the 1930s.

Electricity was fairly new in those days, and was slow to spread to rural places. For-profit utilities focused on serving urban areas, where greater profits could be made; they refused to extend miles of electric lines across rural places with fewer customers to cover the investment. So, rural residents joined together to form not-for-profit electric co-ops, owned by their customers. With the help of federal loans, rural electric co-ops began generating, transmitting and distributing electricity to homes, schools, farms and other businesses.

Electric cooperatives are going strong today.

• 900 electric cooperatives benefit
• 42 million Americans in
• 48 states

Electric cooperatives exist for the sole purpose of serving their communities. Co-op members elect their neighbors to serve on co-op board of directors, and the directors hire a manager to operate the co-op on a day-to-day basis.

The cooperative model helps keep electric rates affordable by giving co-op members a voice in their electric service, through their not-for-profit structure, and by returning excess revenue to members. A portion of excess revenues, called margins, are held in reserve and re-invested in the cooperative infrastructure. Another portion is returned to members in the form of capital credits or patronage refunds. This contrasts with investor-owned utilities, which return profits to stockholders who seldom maintain close connections to the communities they serve.

• $1.3 billion: That’s how much U.S. electric cooperatives returned to their members in 2019, according to the National Electric Cooperative Association (NRECA)

How Arizona G&T Cooperatives Benefits Members

Electric cooperatives evolved over the years. By the 1950s, local electric distribution co-ops outgrew their ability to meet their members’ expanding energy needs. Distribution co-ops began creating their own power generation and transmission (G&T) cooperatives. Four Arizona electric co-ops formed Arizona Electric Power Cooperative (AEPCO) in 1961. AEPCO operates under the umbrella of Arizona G&T Cooperatives (AzGT).

AEPCO is owned by the Members we serve. Our Members include six Class A electric distribution cooperatives that distribute electric power to their residential and commercial consumers at the end of the line.

Distribution co-op directors elect directors to serve on G&T boards. Members, directors and employees remain committed to the goal of delivering reliable, affordable electricity to rural America.

• $1.2 million: Thats how much AEPCO returned to its Members for 2019, based on a 20% allocation of net margins

Bringing Clean Energy to Your Door

Across the nation, electric co-ops are leading the trend toward clean energy. This not only benefits the environment; it also saves on fuel costs. Electric co-ops, including AEPCO, have drastically reduced emissions over the past decade through power plant improvements and by switching to more natural gas and renewable energy sources including solar. AEPCO also facilitates the delivery of hydro power to Member co-ops.

Supporting Local Economies

Electric co-ops support their communities. According to a recent study commissioned by NRECA:

• $88 billion: That’s how much U.S. electric co-ops contribute to the nation’s economy annually
• 612,000 jobs: The number of jobs that the U.S. electric co-ops support each year

In 2020, a regional economic study revealed what Arizona G&T Cooperatives contributes annually to southeast Arizona, including Cochise, Graham, Greenlee and Santa Cruz counties:

• $285.1 million: The amount AzGT contributes in direct, indirect and induced economic activity
• 516 jobs: The number of jobs AzGT supports region-wide

AzGT continues to make loans to business development projects in our communities, including hospitals in Willcox and Benson and a fuel farm at the Benson airport. The funds come from grants provided to us by the U.S. Department of Agriculture Rural Economic Development Loans and Grants (REDLG) program.

• $1.2 million: The amount of loans AzGT has made to local development projects in our region since 2010 through REDLG

In addition, we donate to charities and other worthy causes.

You Benefit from Co-ops of All Types

The cooperative form of business is not new—from agricultural to housing to grocery businesses, co-ops have existed for centuries across the globe.

• Your local credit union is among more than 5,000 financial cooperatives in the U.S. serving a total of 124 million people
• Ocean Spray Cooperative is owned by cranberry growers
• Associated Press is a cooperative news agency owned by media outlets across the nation
• REI, an outdoor clothing and supply cooperative, is owned by customer-members
• Ace Hardware is owned by its retail-store members.
• Tillamook is owned by dairy farmers; dairy co-ops process the majority of America’s dairy products

Almost all cooperatives operate on a not-for-profit basis, returning a share of their margins to members. Co-ops are guided by Seven Cooperative Principles.

Cooperative Principles

1. Open and Voluntary Membership

Membership in a cooperative is open to all persons who can reasonably use its services and stand willing to accept the responsibilities of membership, regardless of race, religion, gender, or economic circumstances.

2. Democratic Member Control

Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Elected representatives (directors/trustees) are elected from among the membership and are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote); cooperatives at other levels are organized in a democratic manner.

3. Members’ Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital remains the common property of the cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative; setting up reserves; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4. 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 as well as their unique identity.

5. Education, Training, and Information

Education and training for members, elected representatives (directors/trustees), CEOs, and employees help them effectively contribute to the development of their cooperatives. Communications about the nature and benefits of cooperatives, particularly with the general public and opinion leaders, helps boost cooperative understanding.

6. Cooperation Among Cooperatives

By working together through local, national, regional, and international structures, cooperatives improve services, bolster local economies, and deal more effectively with social and community needs.

7. Concern for Community

Cooperatives work for the sustainable development of their communities through policies supported by the membership.