PRECO's Main Headquarters in Wauchula, Florida
MEMBER’S HANDBOOK
Click here for a downloadable version of the Member Handbook
Welcome to Peace River Electric Cooperative.
This page is designed for you, our member, and it is intended
to explain some of the many benefits and privileges of being a member
of Peace River Electric Cooperative.
Peace River Electric Cooperative is a non-profit corporation
organized and incorporated in the State of Florida, and wholly
owned by its members.
The members have direct input into the affairs of the Cooperative.
This is accomplished either through your immediate contact with
the Cooperative or through the member-elected Board of Directors.
Your Cooperative serves in the following ten counties: Brevard,
DeSoto, Hardee, Highlands, Hillsborough, Indian River, Manatee,
Osceola, Polk and Sarasota. The total service area is divided into
nine districts; each district is represented by one director.
Elected directors stand for re-election every three years to
provide for continuity in guiding the affairs of the Cooperative.
Directors are reimbursed for their expenses and receive a small
fee for attending meetings; they are not on PRECO’s payroll. A
regular board meeting is held once each month. The Board members
establish policies and electric rates, which must be in accordance with
the laws of the State of Florida, and regulations set forth by the
Florida Public Service Commission.
Directors attend training courses to keep them up to date on the
electric utility industry. The Board also establishes all policies that
concern the administration and operation of the Cooperative. Any
Peace River Electric Cooperative member in good standing is eligible to be elected to the Board of
Directors.
PRECO’s CEO and General Manager is Employeed by the Board of Directors to manage and administer
these policies. The CEO/ General Manager is responsible to the Board for the
daily operation of the Cooperative and develops and
implements efficient procedures to carry out the policies
established by the Board. The CEO/General Manager and your electric cooperative staff follow
these procedures to attain the objectives sought by the Board of directors and
the membership.
Where Does Your Electric Power Come From?
Your electricity is supplied from Seminole Electric Cooperative.
PRECO, along with nine other distribution cooperatives in Florida,
own Seminole Electric Cooperative, Inc., a generation and
transmission (G&T) Cooperative headquartered in Tampa Florida.
Seminole Electric operates two coal burning generation units
located in Palatka, is constructing a new natural gas generating
plant in Hardee County, and is in partnership with other utilities
throughout the state in the ownership and operation of additional
generating plants. Seminole’s wholesale rate to PRECO is lower
than rates offered by other Florida utilities.
All of the electric power PRECO provides is delivered by Seminole
Electric at several strategic locations throughout our ten-county
service area. It is then distributed from these locations over the
Cooperative’s lines to our members.
Why Isn’t PRECO Controlled By The Public Service Commission
Like Investor-Owned Utilities?
PRECO is wholly owned by those members it serves. At the
Cooperative’s district meetings the membership has an opportunity
to elect candidates to a Board of Directors, which represents the
views of the members and approves decisions concerning the
operations of the Cooperative. It is the obligation of the
membership to establish, through this elected Board, the standards
and procedures by which this Cooperative functions.
The Florida PSC does approve the rate structure of the
Cooperative, but does not regulate the Cooperative’s rate level.
The rate level, along with other operating policies and procedures
is regulated by the Cooperative’s membership through the Board of
Directors.
Membership Fees, Connection Fees, and Deposits
Prior to an individual or business becoming a
member of Peace River Electric Cooperative, they must complete the Cooperative’s
membership application, pay an appropriate deposit (depending on the
outcome of a credit check), and pay a $5.00 membership fee. The deposit
and membership fees are refundable upon termination of membership or
upon reaching 24 months of service with no incurred late fees. (Interest
does not accrue on the deposits). A member is allowed only one membership
and is entitled to only one vote at any membership meeting.
In addition to the membership fee and any applicable deposits, a
non-refundable meter connection fee is charged for each and every
meter connected.
When a member in good standing requests his/her service
disconnected, it is done at no cost to the member. If a service is
disconnected and later reconnected in the name of the last
occupant, an amount equal to the Facilities Use Charge for each
full month the service has been disconnected (not to exceed twelve
months) will be charged in addition to the normal reconnect fee.
What Is The Monthly Facilities Use Charge?
The Facilities Use Charge is a fixed amount that covers those
monthly costs incurred by the Cooperative associated with having
service available to the membership. Among the major costs
recoverable by the Facilities Use Charge include; depreciation,
interest, and property taxes on the system. Minor costs recovered
include those associated with the reading of meters, preparation
and rendering of bills, and some system maintenance costs. These
costs occur monthly and have no relationship to the amount of
kilowatt-hours used by a particular member. The kWh charge
recovers all of the costs associated with energy used and is based
on the number of kilowatt-hours used.
How Are Rates Determined?
All factors that contribute to the cost of providing service are
calculated and projected. For Peace River Electric Cooperative,
this includes; wholesale power, costs associated with the
operation and maintenance of the distribution system, accounting
and member service expense, depreciation on investment in power lines,
equipment and facilities. Also included in this cost are taxes,
interest on long-term debt and acceptable margins.
The largest contributing factor to PRECO’s rates is the wholesale
power cost. About 70% of each revenue dollar is used to cover the
cost of purchasing power from Seminole Electric Cooperative. The
Cost of Power Adjustment (CPA) added or credited each month to
your energy bill represents that portion of purchased power cost
in excess of the amount included in the basic electric rates.
Collection Policy
PRECO electric bills are payable in full when mailed. If the total
payment is not received by PRECO before the past due date, the
member will be charged a late fee of $10 or 3%, whichever is
greater. After the past-due date, the account is
subject to disconnection without further notice.
If a collector calls on an account for the purpose
of collecting a past due bill, the account may be reconciled by immediately
paying the collector the amount of the bill (no cash can be accepted
by technicians in the field), plus any collection charge. A service
which is disconnected for non-payment will be reconnected only after
the amount of the delinquent bill, a delinquent charge, a $40 reconnection
charge and any other outstanding indebtedness owed to the Cooperative
has been satisfied. An additional deposit may also be required before
the service is reconnected. An account reconnected after regular working
hours will pay a $80 reconnection charge. For safety reasons, meter connects/reconnects will not be performed after 9 p.m.
Capital Credits
The Cooperative is a non-profit organization. Any revenues
received in excess of expenses cannot be retained as profit for
the Cooperative, but must be credited back to the members. At the
end of each year, these excess revenues, referred to as “margins”,
are assigned back to each member on the basis of the amount of
revenue each individual member paid.
Even though electric Cooperatives are non-profit, they must
produce margins to produce sufficient reserves and develop equity,
which assures financial strength. Peace River Electric
Cooperative’s rates are designed to produce an operating margin
based upon the Cooperative’s financial needs. Our lenders
(mortgage holders) include the Rural Utilities Service (RUS) and
the National Rural Utilities Cooperative Finance Corporation
(CFC). Neither RUS nor CFC has any direct voice in the way Peace
River Electric Cooperative is operated.
Capital credits are allocated to the membership, at the end of
each year’s operation. To determine your individual capital credit
amount, the amount you paid for electric service is multiplied by
the percentage of the year’s margins to total revenue. Your
capital credits represent your ownership in the Cooperative.
Since the Cooperative is operated on a user-owned, non-profit
basis, we have only one source of revenue - electric sales.
Therefore, members do not receive interest or a dividend on their
capital credits, since this would involve raising rates to pay
ourselves interest!
Monies accumulated in your capital credit account cannot be
applied against your electric bill because equity would be
adversely affected and this would conflict with the laws of the
Internal Revenue Service.
Whether or not capital credits are refundable depends on the
approval of the Board of Directors and on the financial condition
of the Cooperative. PRECO currently is able to return a portion of
capital credits annually.
If you move from PRECO’s service area, the capital credits
accumulated in your account will remain in your name and be
distributed appropriately. It is important to keep the Cooperative
informed of your current address in order to send you your refund
when a general retirement of credits is made.
When a natural person, as opposed to a corporation or partnership,
becomes deceased, the estate has two options regarding capital
credit refunds:
- Wait until the general retirements are
made for the years when capital credits were earned.
- Apply for early retirement to clear
deceased estates.
Capital credits are allocated to
businesses in the same manner as they are to natural persons.
Businesses receive refunds when the PRECO Board of Directors makes
a general retirement of Capital Credits.
 Florida Monthly Magazine
Every month you will be receiving a
complimentary copy of the “Florida Monthly ” magazine. We have
chosen this method to provide you with timely information about
your Cooperative, the communities we serve, as well as helpful
articles on electric usage and safety. Your suggestions and
contributions to this monthly publication are encouraged and
appreciated.
Taxes Paid By PRECO
Peace River Electric Cooperative is
subject to payment of all taxes paid by other businesses, except
income tax. PRECO pays real estate taxes, sales taxes, payroll
taxes, and highway fuel taxes. The Cooperative pays no income tax
because it has no income profit. Taxes paid by Peace River
Electric Cooperative amount to over $2 million per year.
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