Three tiers form strong system
Associated Electric Cooperative Inc. is the major source of electric power for an extended system
of member electric cooperatives. The system is organized into three levels or "tiers,"
each with its own set of responsibilities.
The system's top tier is made up of 51 distribution cooperatives in Missouri, southern Iowa and
northeast Oklahoma. These distribution cooperatives provide electric service directly to consumer-members,
including businesses, farms and households. To provide the best service possible, distribution
cooperatives take on many different responsibilities including installation and maintenance of
power lines from substations to consumer-members, planning for the future needs of their service
area, working with communities to encourage economic development and helping their members learn
to conserve energy.
At the second level of the system are the regional cooperatives that transmit Associated's power
to the 51 distribution cooperatives. These organizations are known as generation and
transmission cooperatives (G&Ts), and they serve six geographical areas of Missouri,
southern Iowa and northeast Oklahoma. G&Ts work on a regional level as construction
agents and own the majority of transmission systems from 69-kilovolt to 161-kV. At one time the G&Ts
not only transmitted the power to their member distribution cooperatives, but they also had all of
the responsibility for generating and/or purchasing it as well.
 In 1961 the six G&Ts joined to form the system's third tier, Associated Electric Cooperative Inc.
Associated was subsequently given the responsibilities for generation and power procurement,
leaving transmission as the primary responsibility of the G&Ts.
In order to provide for the system's ever-growing demand for wholesale electricity, Associated has
built a flexible mix of resources, including thermal generation facilities, hydropower access
and interconnections with neighboring utilities. In addition to its generation and power purchasing
responsibilities, Associated also provides its member systems with economical services related to
such business needs as insurance, marketing, economic development, environmental protection
and labor relations.
The financial success of Associated is a reflection of the success experienced by the three-tiered
system. Associated has wholesale electric rates that are among the lowest in the United States.
Associated continues to be one of the few wholesale power suppliers rated AA by Standard & Poor's and Fitch Ratings Ltd. and A1 by Moody's Investors Service.
The three-tiered system brings efficiency through specialization at each level of the system.
The entire three-tiered system benefits from the economy of scale and, since each tier can react quickly
to changes, the overall competitiveness of the system is improved.
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