PRECO Members to Receive $1.4 Million in Capital Credits

This month, our members will be unwrapping a $1.4 million gift from Peace River Electric Cooperative. But, it won’t be under the tree.

In mid-December, members who had service during the years of 1994 through 1997 will receive a Capital Credits check in the mail. Those with an active PRECO account receiving less than $50 will see a credit on their electric bill.

Let’s look at how these funds go from patronage, to being allocated to accounts, and finally to being retired as Capital Credits.

Patronage Refund Process

The Patronage Refund process returns profits (known as “margins”) to the member-consumers of the cooperative. In the first of two steps, Capital Credits are allocated to member accounts the year in which margins are received. Second, the Patronage Refund process is completed when these Capital Credits are retired (paid).

Allocation of Capital Credits

Each year, if PRECO (a not-for-profit co-op) has collected revenue in excess of expenses, it is posted as margins. Margins are allocated to members in proportion to the amount of electricity they purchased that year. The more electricity purchased, the greater the share of margins allocated to the member’s Capital Credits account.

Capital Credits Retirement

PRECO maintains a Capital Credits account for every co-op member, past and present. Capital Credits accumulate for each member until it is financially feasible to return them. When PRECO disburses Capital Credits, it is referred to as a “retirement.”

PRECO’s lenders require us to maintain a certain level of equity and financial stability. Capital Credits are the primary source of equity that satisfies these requirements. Capital Credits are also used to minimize debt financing and reduce the cost of service to help keep electric bills affordable.

Please verify that we have your current mailing address, even if you move away, so you may continue to receive your Capital Credits in the future.