What is an electric cooperative? Co-ops and city utilities

An electric co-op is a utility its members own together. It operates on a not-for-profit basis.^⁠[1] That ownership is the key to understanding the word “member” on a co-op application.

Members also take part in governance, or how the co-op is run. At Pedernales Electric Cooperative (PEC) in Texas, members vote for directors who represent their voting district.^⁠[3] Ask your co-op how membership and voting work for your account.

• Ownership: a co-op belongs to its members.^⁠[1]
• Governance: PEC’s members elect district board directors.^⁠[3]
• Your next step: read the application and membership terms for the co-op serving your new address.

A distribution co-op can buy wholesale electricity and deliver it to homes.^⁠[4] Our guide to how electricity reaches your home covers the system behind your outlets. You can also explore more about how electricity works.

A co-op is member-owned; a municipal utility is city-owned.^⁠[1,2] Austin Energy, for example, is a not-for-profit enterprise of the City of Austin.^⁠[2] Austin City Council sets its rates and service terms.^⁠[5]

Public ownership is broader than city ownership. The U.S. Energy Information Administration’s definition also includes federal- and state-run utilities.^⁠[1] When you see “public power,” check which organization actually serves the address rather than assuming it’s a member-owned co-op.

Municipal aggregation is another term you may see. In Massachusetts, it means a city or town buys electricity from a competitive supplier for residents and businesses.^⁠[6] That describes buying supply together, rather than ownership of a municipal utility.

A co-op may charge you to join. PEC requires membership for service and charges new members a membership fee.^⁠[7,8] Its membership fee, service setup charge and security deposit are separate items.^⁠[7]

Use these charges as questions for your utility, rather than a quote for your own move. Ask what you’ll pay to join, what starts service, and what secures the account. Get each amount and refund condition before you submit the application.

Renting doesn’t automatically leave you out of the application process. South Kentucky RECC asks renters for a rent receipt and verifies their identification with two forms of ID.^⁠[9] Ask your serving co-op what its account holder needs to provide.

Capital credits can record your share of a co-op’s remaining funds. PEC allocates any funds left after expenses to members’ capital-credit accounts each year.^⁠[10] An allocation records your ownership stake; it isn’t a payment you can spend now.^⁠[10]

A distribution is the payout. PEC’s board reviews the co-op’s finances and decides what portion can be returned to members.^⁠[10] Read an allocation notice and a distribution notice as different things when you plan your budget.

Closing a membership doesn’t mean cashing out the whole recorded balance. PEC does say that year’s distribution goes on your final bill as a line-item credit when you close membership.^⁠[10] Ask how the current distribution and any remaining balance will be handled.

Check with the utility serving your address before shopping for a supplier. EIA directs you to your distribution utility or state regulator to find out whether retail choice is available.^⁠[11] Retail choice means choosing who sells you the electricity itself.

Co-op ownership alone doesn’t rule it out. Nueces Electric Cooperative in Texas says its entire service area is open to retail competition. It continues delivering electricity when members choose a power provider.^⁠[12]

Ask whether your specific account can choose a supplier, then check current offers that serve it. Our guide to where households can choose an electricity supplier explains the broader picture. A state name is a starting point for that check.

Some co-ops and city utilities offer their own community-solar programs, which let you subscribe to part of a shared solar project. Cobb EMC and Austin Energy are examples, with different account and availability limits.^⁠[13,14] Check the named program’s terms before treating it as an option for your home.

Cobb EMC says SolarShare wasn’t created to lower your electric bill. Its terms require a six-month minimum commitment, followed by written cancellation if you unsubscribe.^⁠[14] Those details matter alongside whether enrollment is available.

When checking any offer, ask whether it accepts your utility and account. Then ask about available space, charges and cancellation. Keep utility-run program terms separate from any outside offer you’re considering.

Ask for the requirements for your address and the person opening the account. PEC, for example, asks for service and mailing addresses, identifying information and a payment method for fees.^⁠[7] Keep the answers together so you can refer to them during your move.

For the rest of the move, follow our guide to setting up electricity before you move. You can also find your utility’s service guide. Bring your exact address to the account check rather than relying only on a utility name.

If your address is supported, Public Grid can help you set up electricity with your co-op or city utility.^⁠[15] It’s free to sign up, with no contracts.^⁠[15] We also track usage and bills for connected accounts.^⁠[15]

Electricity accountvia Utility Co.

Sample account

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