Electric cooperatives (co-ops) are consumer/member-owned, nonprofit electricity providers. Every member is awarded one vote and an equal ownership interest in the co-op, and is eligible to run for the board of directors. Co-ops are governed by an elected board of directors who hires a general manger or CEO to run daily operations. This same board regulates the co-op.
The Rural Electrification Administration was established in 1935 by FDR under the New Deal to help bring electricity to rural areas across the country, where 9 out of 10 rural homes were without electric power. A year later in 1936, U.S. Congress passed the Rural Electrification Act, which established federal loans for rural electric distribution infrastructure. Though this spurred little action from the investor-owned utilities that were serving bigger population centers, farmers and local leaders organized to establish rural electric cooperatives and apply for these loans to bring power to their communities. The first electric co-op in Wisconsin came into service in 1937 and many soon followed. Organized in 1936, the Wisconsin Electric Cooperative Association (WECA), became the country’s first statewide trade association for electric co-ops; it currently counts 25 member co-ops in Wisconsin. Here’s a short video about how the electric cooperative model was established in the U.S., and here’s a longer video about the electric coop history.
There are now 24 electric distribution cooperatives in Wisconsin, as well as a generation and transmission cooperative (Dairyland Power Cooperative), that provide power to dozens of electric distribution co-ops and munis in Wisconsin and some neighboring states. About 1 in 10 electric consumers in Wisconsin are members of co-ops. Some quick facts about co-ops:
- Co-ops provide 6% of retail electricity sales in Wisconsin.
- These private, nonprofit utilities are owned by members living within their service area, which is typically rural.
- Their nonprofit business model is to provide at-cost electricity rates to members.
- Co-ops are self-regulated by an elected board of directors.
How do co-ops compare to other utility models? Check out our Utilities at a Glance chart.