In mid-December, the Central Electric Cooperative Board of Directors returned $2.1 million in capital credits to current and former cooperative members from the years 1993 to 1995. This is the largest amount of capital credits ever returned at CEC. It is due to CEC’s financial strength—a direct reflection of efforts by the board of directors and employees to manage your cooperative efficiently.
Capital credits are one of the many benefits of being a CEC member. Electric margins in excess of operating costs and expenses are returned to members based on a percentage of your electricity billed during a given year. The term for these margins is capital credits. The board operates under a policy that capital credits be returned within 25 years, and now the board is returning capital credits within 23 years. Central Electric has returned capital credits every year since 2001 and in 33 of the past 36 years, totaling more than $24.4 million returned to members since 1958.
As a not-for-profit electric utility, CEC is limited to two options for funding capital projects, such as replacing or upgrading poles, overhead and underground wire, transformers and substations. The two options are to either borrow money from a bank and pay interest, or borrow from members through any excess electric margins and then return the excess margins to members as capital credits in the future. CEC uses a combination of both options, melding borrowed money with excess electric margins to fund our construction and infrastructure needs.
Our capital credit payout comes just two months after the Bonneville Power Administration increased wholesale electricity rates an average of 5.4 percent to their 136 utility customers, which includes CEC. While many BPA utility customers were forced to increase their retail rates, CEC was able to hold its rates stable.
Payment of capital credits at this time of year certainly helps make the holiday season more enjoyable for members, along with emphasizing the fact we had a successful 2017. We will make sure you can read more about our many accomplishments during the past year in an upcoming Ruralite article. I want to thank the employees for their daily efforts to manage costs and seek ways to operate more efficiently. I also want to thank the board of directors for its vision and guidance that ensures CEC’s members are the top priority.
If you would like more information or have any questions about capital credits, you can talk with one of our customer service representatives by calling (541) 548-2144, or visit www.cec.coop, where we discuss capital credits in the Customer Service section.
President and CEO