Utility Cooperative

A utility cooperative is a type of cooperative that is tasked with the delivery of a public utility such as electricity, water or telecommunications to its members. Profits are either reinvested for infrastructure or distributed to members in the form of "patronage" or "capital credits", which are essentially dividends paid on a member's investment into the cooperative.

Each customer is a member and owner of the business with an equal say as every other member of the cooperative, unlike investor-owned utilities where the amount of say is governed by the number of shares held.

Many such cooperatives exist in the rural United States, and were created by the New Deal to bring electric power and telephone service to rural areas, when the nearest investor-owned utility would not provide service, believing there would be insufficient revenue to justify the capital expenditures required. Many electric cooperatives have banded together to form their own wholesale power cooperatives, often called G & Ts, for generation and transmission, to supply their member-owners with electricity.

Many utility cooperatives strive to bring the best service at the lowest possible cost, but often the high cost of maintaining the infrastructure needed to cover large, rural areas without the support of large cities as a rich customer base causes prices to be high. However, a few such co-ops have managed to tap into urban markets (due to growth into previously rural territory served by the co-ops) and have proven to be very cost-effective.

In Finland the telephone network was largely built by telephone cooperatives. Instead of a telephone subscription, a telephone stock is bought; there is also a lively secondary market for telephone stocks. The largest cooperative, known originally as the Helsinki Telephone Association (now Elisa Oyj) was founded in 1882. Today, cooperatives such as PNWISE are working to bring broadband access to rural areas of the United States by the same means. In the UK, the Phone Co-op was set up in 1998 to provide telecommunications services, and in 2011 Midcounties Co-operative launched Co-operative Energy to supply electricity and gas. As part of the community wind energy movement, Energy4all has sponsored the establishment of a dozen or so wind energy co-operatives.