Tri-County returning $200,000 in capital credits to members

MANSFIELD (Oct. 19, 2009) — Tri-County Rural Electric Cooperative is in the process of returning $200,000 in capital credits to members and former members of the cooperative.

In September, the Tri-County board of directors approved the retirement of $200,000 worth of capital credits allocated to members’ accounts in 1983. As a result, members of the cooperative in 1983 who have remained at the same account location will receive a credit on either their October or November electric bill.

Tri-County will issue paper checks to former members who received electric service from the cooperative in the capital credit retirement year, as well as current members whose account location has changed since 1983.

Capital credits reflect margins the cooperative realizes at the end of each year. Margins, a cooperative’s equivalent to “profits,” are the excess of income over expenses.

Because cooperatives are member-owned, margins are allocated back to members in the form of capital credits. The amount of the allocation to a member’s account is based on that member’s energy consumption for the retirement year.

The cooperative retains margins for a period of time — historically 20 to 25 years — to be used as working capital to assist in the financing of plant replacement and to build and maintain the electric system. When the co-op is financially able to do so, it retires margins by returning capital credits, also known as patronage capital, to members.

“I am extremely pleased that the cooperative finds itself in a position to return capital credits to members again this year, especially in light of the current economy,” said Craig Eccher, Tri-County’s president and chief executive officer.

Barbara J. Seeley, chairperson of Tri-County’s board of directors, said the board always considers the financial standing of the cooperative before approving the return of margins to members.

“Tri-County had a solid year in 2008,” she said. “Being able to return capital credit refunds to members reflects on the financial health of the cooperative.”

Seeley added that capital credit refunds are one of the many benefits of being a member of an electric cooperative.

“Co-ops exist to make sure the needs of their members are being met, not to make a profit,” said Seeley. “When we have a  positive financial year, the members are able to share in the profits through capital credit refunds.”

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