The Cooperative’s Financial Advantage: CEC returns more than $283,000 in capital credits to members
Fulfilling one of its guiding principles with regard to members’ economic status, Community Electric Cooperative in December mailed 6,100 refund checks totaling more than $283,000 to current and former members who received service from the cooperative.
This was the 32nd consecutive year that CEC has made payments — commonly known as capital credits — to member-owners. The refunds were provided because CEC took in more revenue during the year than it spent to build and maintain the electric system.
Under their unique ownership structure, electric cooperatives are democratically controlled by members who contribute equitably to their operations. It is a common — though not mandatory — practice for cooperatives to credit members for capital contributions in instances where revenues exceed expenditures and reserve requirements.
CEC’s board of directors approved the December payments. Before distributing capital credits, directors first consider the financial condition of the cooperative and the needs for capital funds for the coming years.
“Members’ economic participation is one of the seven principles that govern operations of rural electric cooperatives. On a universal basis, this places a high priority on cooperatives’ financial responsibilities to their members, and CEC’s record of returning capital credits to members is one we’re happy we could extend this year,” Board Chairman Jeannette Everett says.
CEC President and CEO Steven A. Harmon expressed pride that CEC was able to deliver electricity to members safely, reliably and cost effectively.
“With more than 1,600 miles of distribution lines, more than 12,000 points of service, and a lean staff, it takes a daily commitment on the part of our employees to fulfill our mission and meet our members’ power needs safely and efficiently. This year, as in prior years, the repayment of capital credits demonstrates that electric cooperatives’ unique business model is one that our members can value conceptually and financially,” Harmon says.
To date, Community Electric Cooperative has returned more than $20 million to members who participated in the co-op’s business.