Both electric cooperatives and investor-owned utilities distribute electricity to end-users. The main difference is the business model. Electric co-ops are not-for-profit organizations, owned by their consumers, who are “members.” Investor-owned utilities are owned by stockholders, who may not be consumers of the electric provider.

Cooperatives are set up to provide services at cost to their members. Money made in excess of expenses is returned to the members in the form of patronage capital, or capital credits.