PRECO's Main Headquarters
in Wauchula, Florida
Welcome to Peace River Electric Cooperative.
MEMBER HANDBOOK: downloadable/printable
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.
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 a trip fee. A service which is disconnected for non-payment will be reconnected only after the amount of the delinquent bill, a trip fee, a reconnection charge (overtime fees may apply) and any other outstanding indebtedness owed to the Cooperative has been satisfied. An additional deposit may also be required before the service is reconnected. For safety reasons, meter connects/reconnects will not be performed after 7:00 p.m.
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 Currents Magazine
As a member benefit, you will receive a copy of the Florida Currents magazine monthly. 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.