The three-tiered system, united by the common purpose of serving electric cooperative members with affordable and reliable electricity, brings efficiency through specialization at each "tier." 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.
The top tier is comprised of 51 distribution cooperatives in Missouri, southern Iowa and northeast Oklahoma. These distribution cooperatives provide electric service directly to member-consumers, including businesses, farms and households.
Distribution cooperatives take on many different responsibilities, including installation and maintenance of power lines from substations to consumers, planning for future needs of their service areas, working with communities to encourage economic development, helping their members use electricity efficiently, incorporating consumer technology and educating about safety.
At the second tier are the regional cooperatives that transmit the power from Associated Electric Cooperative 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.
The G&Ts operate, build and maintain the high-voltage transmission system that has been built with member investment. Additional strengths the G&Ts bring to Associated that ensure its success include member governance that keeps it focused on its mission; legislative, government, industry and community relations; interconnections and relationships with neighboring utilities; and, in some cases, additional low-cost generation to its resources.
In 1961 the six G&Ts formed the system's third tier, Associated Electric Cooperative, which was subsequently given responsibilities for generation and power procurement, leaving transmission as the primary responsibility of Associated Electric's six owner G&Ts.