Why would a business encourage customers to use less of its product and then return profits to the customers it serves? Most businesses wouldn’t. The concept goes against the grain of the corporate world.
Empire Electric Association is one business that does. As a not-for-profit electric cooperative, EEA customers are encouraged to use energy wisely to keep energy costs low. And unlike investor owned utilities that typically distribute profits to investors — EEA gives back its excess funds to the member-owners it serves.
EEA delivers energy to members at the cost of service and exists solely to provide safe, reliable electricity at the most reasonable cost. If there is excess money, called margins in a nonprofit business, the co-op returns those funds to the member-owners in the form of patronage capital credits. This is what sets co-ops, like EEA, apart from many business structures.
Membership at EEA not only ensures you receive electricity at equitable rates, it means that you are an owner of the cooperative. This ownership gives you a voice in its operation, through your elected board, and a share in the margins earned by your cooperative.
Patronage capital is your investment in EEA’s infrastructure and retained by the cooperative for a number of years. This operating capital reduces the need to borrow money to run the business, which could cause a raise in the cost of electric service to our members.
Each year, EEA’s board of directors makes a determination on the amount of capital credits, if any, they will retire, while ensuring the financial integrity of the cooperative. That money is credited to each member’s capital credit account according to the amount of electricity the member purchased. A member with higher bills will gain more capital credits than a member with lower electric bills.
EEA’s board of directors recently returned patronage capital credits totaling $729,795.71 to its 27,432 present and former members. The average credit amount for active accounts was $58.22.
How are capital credits returned to you? EEA offers several choices for receiving capital credit refunds including: donations to a nonprofit organization, a credit on your active account, or a check in the mail. The selection you make remains in effect for future refunds unless you want to change it. Your selection can be updated at any time.
Capital credit refunds are an important reason to keep your address updated, even though you may no longer be an active member or live in EEA’s service area. When capital credits are retired for the years you had service with us, your up-to-date address will enable us to send your capital credit check.
Of the many benefits to co-op memberships, two are directly related to patronage capital. An indirect benefit is that patronage capital allows EEA to borrow less money which helps keep the rates lower. A direct benefit is when margins are returned to members in the form of capital credits. It really does pay to be a co-op member.
Bobbe Jones is the Assistant Member Services Manager with Empire Electric, 801 N. Broadway, Cortez. Empire Electric Association is working with the community to save energy and money.