Intercounty Electric Cooperative’s board of directors has authorized the allocation of about $3.5 million in operating and non-operating 2011 margins and also includes the unclaimed 2009 patronage margins, to the co-op’s member-owners.
Extreme weather in IECA service area coupled with sound management and hard work by the employees are factors in having patronage capital margins to return to the member/owners, Intercounty said. IECA members recently received an allocation notice of their portion of margins returned.
In order to understand why capital credits are issued, there needs to be an understanding of the difference between an electric cooperative and a municipal or an investor owned utility, the organization said. Intercounty is a not-for-profit electric cooperative owned by those it serves. In a cooperative, each member is an owner of the utility system unlike a municipal or investor owned utility. Members of a cooperative have a direct input on how the cooperative is run through their elected director to the board, who are also members of the cooperative. Capital credits are the cooperative’s margins or monies remaining at the end of the year after all the bills are paid.
Capital credits are generated whenever revenue exceeds expenses. By allowing the cooperative to use the capital credits, Intercounty Electric needs to borrow less money to operate or has less need to generate additional revenue through rate increases. This saves the members money by reducing the amount of interest that would normally be charged for using loan funds. Capital credits are returned to the member when the financial condition of the cooperative permits.
Capital credits are allocated to each member of the cooperative every year based on their participation in the cooperative. The allocations are based on the total dollar amount of electricity purchased. In other words, members receive cash back based upon how much electricity they use.
Citizens are encouraged to watch for the 2010 list of unclaimed capital credit checks in the June issue of Rural Missouri. For those who do not receive the Rural Missouri, it can be accessed digitally at www.ieca.coop or www.ruralmissouri.coop.
Those who move are reminded to leave a forwarding address with Intercounty so future capital credit checks can be mailed.
Members can visit with directors, staff and employees at the IECA annual membership meeting from 8 a.m. until 2 p.m. June 29 at the Licking City Park.