Capital Credits

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    Member-Owned. Not-for-Profit.

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

    Step 1: Allocation of Capital Credits

    Each year, any revenues received in excess of expenses – referred to as “margins” – are deemed Patronage Capital and set aside in the form of Capital Credits.

    PRECO prorates margins to its members according to the member’s total annual billing for that year. This allocation of Capital Credits is the first step.

    Tracking Your Capital Credits

    PRECO maintains a Capital Credits account for all past and present members of the Cooperative. Each member accumulates the Capital Credits allocated to them in this account until they are paid – or “retired.”

    Why PRECO Retains Capital Credits

    In order to meet our financial obligations – such as:

    • Long- and short-term debt
    • Replacement of aging infrastructure
    • Construction of new power lines
    • Secure low-cost loans
    • Reduce the amount of money we need to borrow

    Step 2: Retirement of Capital Credits

    When it is financially feasible to do so, the Cooperative disburses or returns Capital Credits to its members. This process is known as the retirement of Capital Credits—when your equity is returned to you.

    This final step completes the allocation and retirement process, returning margins to the member-owners of the cooperative.

    Capital Credits FAQs

    For more information, contact Customer Care at (800) 282-3824.

    What are Capital Credits?

    Peace River Electric Cooperative, Inc., is a not-for-profit organization. Any revenues — called margins — remaining after all expenses have been paid are allocated to members in the form of Capital Credits. Capital Credits represent each member’s share of the co-op’s margins.

    When do I receive a Capital Credits retirement?

    Every year, the Board of Directors decides whether to retire Capital Credits based on the financial health of the Cooperative. Capital Credits are typically retired annually in December. The oldest retained Capital Credits are returned first.

    What happens to unclaimed Capital Credits?

    PRECO strives to deliver Capital Credits to former or current members who have moved from their last known address or did not cash a check that was mailed to them. When funds are not claimed within 3 years after payment, these funds revert to the Cooperative. Please contact Customer Care if you need to update your mailing address.

    What if a member of a joint membership is deceased?

    Upon the death of either spouse in a joint membership, the name of the deceased person is removed from the membership, and the membership is then held solely by the surviving spouse. A joint membership is not eligible for an early retirement upon the death of one of its members.