At Cost
One of the basic principles of Cooperatives of all kinds -- Rural Electric Cooperatives, Rural Telephone Cooperatives and Farmers Cooperatives -- is that they must operate and provide their "
service at cost".
Simply said: To remain non-profit and tax exempt all Coops must return any monies collected in excess of the cost to their member owners in cash or by way of reduced rates for services like electricity.
This is not just a theoretical concept. It is required by the Internal Revenue Code and if violated, the Coop runs the risk of losing its status as a non-profit entity granted by the IRS and then pay income taxes on its improper "profit" which could be extraordinarily harmful to all of the Coop's member owners.
The concept is embodied by this sign on the now defunct rural farmers elevator near Beulah, North Dakota shown above with an enlargement of its endorsement of the "Service at Cost" principle depicted below.