PRECO to Pay Members $1.4 Million in Capital Credits

Posted: December 2, 2019 at 3:18 pm

We’re so glad it’s that time of year again. The holidays are a time when we look forward to gathering with family and friends, huddling around a lighted tree and sipping eggnog. For many PRECO members, it is also the time of year to receive Capital Credits from the cooperative.

As a member-owned cooperative, Peace River Electric Cooperative operates as a not-for-profit electric distribution utility. One cornerstone of the cooperative business model is the allocation and retirement of Patronage Capital—a two-step process that returns margins to the members.

Each year, the cooperative calculates margins (described as revenues left over at the end of the year after all expenses). We allocate margins to each member’s Capital Credits account based on their electricity purchases that year. PRECO’s lenders require these allocated margins to be retained and used for equity in the cooperative.

Holding this equity permits us to obtain low-cost loans and reduces the amount of money we need to borrow. Also, Capital Credits help PRECO meet financial obligations, maintain its electric system and serve new members.

PRECO maintains a Capital Credits account for all past and present co-op members. Each member accumulates the Capital Credits allocated to them in this account. Even if you move and are no longer a member of the co-op, the Capital Credits stay in your account. It’s important to update your address with PRECO if you move away, so you will continue to receive Capital Credits in the future.

The Cooperative retires Capital Credits when it is financially feasible to do so. When Capital Credits are “retired,” PRECO returns your equity to you. This month, PRECO is retiring more than $1.4 million in Capital Credits. Visit our Capital Credits web page.