Pedernales Electric Cooperative will distribute nearly $8.6 million in capital credits to members this December, raising the lifetime distribution to more than $107 million since 2007.
The 2017 distribution was approved Oct. 16 after the PEC Board of Directors reviewed the cooperative’s fiscal health and determined the amount will not result in any adverse impact.
Because PEC is a cooperative owned by its members, it does not earn profits. When revenues exceed expenses, the cooperative earns margins. Each year, when financial conditions allow, those margins are allocated to members in the form of capital credits.
“Part of the cooperative difference is returning our margins back to our members,” PEC Controller Freddy Wolff said. “A capital credit distribution is a great benefit and a way for our members to share in the success of the cooperative.”
This year’s distribution, outlined below in more detail, will be executed in accordance with the cooperative’s capital credits policy:
- Members who accumulated capital credits in 2016 will receive 40.5 percent of their allocation, discounted to approximately 18.25 percent, which represents the net present value of their credits. This distribution will total approximately $4.1 million. Members may opt out of their discounted 2016 capital credits if they prefer to receive non-discounted credits in a future distribution, which PEC predicts to be on a 30-year cycle.
- Members who accumulated capital credits in 1986 and 1987 will receive 100 percent and 26 percent, respectively, of the non-discounted credits allocated from those years. This will total approximately $4.1 million.
- The estates of deceased members received an estimated total distribution of $300,000.
Current members are scheduled to receive distributions as credits on their December bills. Members with multiple accounts will receive all their credits on a single account’s bill.
Former members with capital credit distributions totaling more than $10 will receive a check. A check may be issued for any distribution under $10 by request or when accumulated unpaid distributions exceed $10. Former members are encouraged to contact PEC to ensure their current address is on file.
“In the last decade, more than $107 million has gone back into the hands of PEC members,” Emily Pataki, PEC’s Board president, said. “These dollars come from the cooperative’s continued positive margins and are made possible through our commitment to maintaining a financially healthy organization. We take great pride in the unique relationship we have with our members and in sharing PEC’s success with them.”
Members will receive more information about capital credits with their December bill, and may also call our capital credits line at 800-230-2207.