Capital Credits Retirement Checks
As the electric utility industry continues to evolve, face continual change and explore different ways to serve customers, we can all be proud that we are part of the electric cooperative program. Electric cooperatives have a very unique business model that has proven to benefit cooperative members and has stood the test of time for 82 years.
The most profound and distinct difference between electric cooperatives and other utility business structures is that electric cooperatives are not-for-profit organizations that are member-owned and member-controlled. As a not-for-profit organization, your Cooperative does not strive to produce profits for shareholders and investors but must maintain a sound financial position for the membership. Your Cooperative sets the electric rates high enough to cover the costs of providing service and at the end of the year, any funds that were collected above the cost of service are allocated to you, our members, in the form of capital credits.
These capital credits are retained by the Cooperative and used to build and maintain the infrastructure necessary to serve the members and service the long-term debt of the Cooperative. When the financial condition and cash position of the Cooperative permits, the capital credits are then retired and paid back to you, as members and owners. Every year your Cooperative mails capital credit statements to every Cooperative member notifying them of their allocated capital credit balance and the amount of capital credits allocated to them in the previous year. This statement shows each member their equity and ownership in the Cooperative.
I am pleased to inform you, as Cooperative members and owners, that your Cooperative’s Board of Trustees approved the retirement and return of $1.6 million of Capital Credits to the members. The capital credits that are being returned are from the years 1984 and 2019. This means that if you were a Cooperative member in either or both of these years, you should receive a check in early December for those capital credits. Over the past ten years, your Cooperative has retired and returned over $17 million to Cooperative members.
I would like to close by stating that all of us can be proud to be a part of the Electric Cooperative program. The founders of the electric cooperative program developed a unique business structure that by its very nature, makes electric cooperatives very accountable to the members it serves. This unique structure has contributed to the success of your cooperative over the years and remains unchanged even today, some 82 years later. Your cooperative is governed by local people that live and work in your very own communities. Your cooperative is operated by a group of local employees that also live and work in your very own communities. Your cooperative’s sole purpose is to provide you, as cooperative member-owners, with reliable and quality service at equitable rates.