To Aid Members, PRECO Retires $1.6 Million in Capital Credits Early
Peace River Electric Cooperative, a member-owned, not-for-profit electric distribution utility, is retiring over $1.6 million in Capital Credits to help relieve the financial pinch that many families and businesses are feeling due to the COVID-19 pandemic.
Usually, the cooperative retires Capital Credits once a year in December. Due to the financial impact the coronavirus is having on every community in the 10 counties we serve, PRECO is moving the timetable up to June this year.
A cornerstone of the cooperative business model is the allocation and retirement of Patronage Capital—a two-step process that ultimately returns margins to members as Capital Credits.
Each year, PRECO calculates margins (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. Retaining Capital Credits for a time allows PRECO to obtain low-cost loans, reduces the amount of funds we must borrow and helps us meet financial obligations as we maintain the electric system.
As COVID-19 began affecting the local community, we quickly took appropriate steps to reduce its effect on members. Along with waiving late fees, PRECO is giving members the ability to set up payment arrangements on their own through their online or mobile app account. The Board of Directors, management team, and staff continued discussing additional ways to assist our members. As a result, Capital Credits will be “retired” or paid out this month either as a bill credit or as a check for members receiving service in 1998 and 1999. We’re hoping this will help stretch our members’ budget when it is needed the most.
We want our members to know that PRECO stands with them and the communities we serve during this difficult time. Our Board of Directors and employees all live in the local community.
Once this crisis passes, you’ll once again see us shopping at the grocery, attending ballgames, and eating at the same restaurants you do.