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A utility cooperative is a type of cooperative that is tasked with the delivery of a public utility such as electricity or telecommunications to its members. Profits are either reinvested for infrastructure or distributed to members in the form of "capital credits", essentially dividends paid on a member's investment into the cooperative.Each customer is a shareholder with equal say as every other member of the cooperative, unlike investor-owned utilities where the amount of say is governed by the amount 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. These include the electric membership corporations (EMCs), which may in turn belong to wholesale co-ops of their own.
Many 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 and have proven to be very cost-effective.
See also: Rural Utilities ServiceThe Rural Utilities Service formerly the Rural Electrification Administration is charged with providing utilities ( electricity, telephone, water, sewer, etc. to rural areas through public-private partnerships. Related Legislation 1944 Rural Electrificati
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Cooperatives
