HREC Returning $367,915 to Members in April 2020
Hood River Electric Cooperative (HREC) is returning $367,915 to members in April 2020 as a result of a capital credit retirement authorized by the Board of Directors. The board authorized this special springtime retirement to assist members who may be facing financial hardship due to the COVID-19 pandemic.
This capital credit retirement pays out the remaining patronage capital allocations earned in 2008. These payments will be sent out in mid-April or applied to individual accounts.
In addition to the capital credit retirement, HREC has suspended disconnections for non-payment and is waiving late payment penalties for past-due bills.
“This is what co-ops are all about,” said Director Roger Nelson. “We’re glad to be able to take these steps to support our members during this difficult time.”
Capital Credits: Returning Your Investment
Not many businesses pay you for buying something you wouldn’t want to live without. We do!
Hood River Electric Cooperative is a not-for-profit cooperative. Unlike many other types of businesses, cooperatives don’t have corporate shareholders. Instead, our members own us and share in the construction, operation, maintenance, and prosperity of the co-op.
When you get electric or internet service from us, you become a member of our co-op. At the end of each year we compare our operating costs with what members paid for the services we provided them. Since we do not have corporate shareholders, any funds left over—the margins—belong to our members. We save the extra money for a few years in case there’s an emergency or system improvements needed. Then we return the funds to members. We call this process capital credit allocation and retirement.
How much money a member gets back from us depends
on how much energy and internet service they used.
What are Capital Credits?
Capital credits represent your share of the margins, or net income, the co-op earns while providing service each year. All members get a share; the size of your share is based on your proportional share of the services provided to all members.
The co-op tracks revenues and expenses separately for electric and internet service. At the end of each year, any funds (margins) remaining after all of a service’s expenses have been paid are allocated to the members who bought that service.
If you purchase electric service from us, we record an electric service capital credit allocation for you. If you purchase internet service from us, we record an internet service allocation. We send you an allocation statement each year to help you keep track of your capital credits.
Why Don’t We Return Extra Funds Right Away?
We never know when a storm, fire, or other emergency might strike our community. We also have to invest in our system, replacing poles and upgrading systems to keep power and internet flowing reliably.
To help cover costs when a big investment is needed, we hold on to capital credits for a few years. The funds are used to pay for system improvements and maintenance.
When the funds are no longer needed, we return them to members. Your capital credit retirement is the amount you receive back as a refund. Our Board of Directors decides how much of the fund to retire each year. They make separate decisions for each service.
- Our electric service, operating for about 75 years, usually returns some capital credits each year. In 2019, we retired the balance of our 2007 electric service allocation, and 50% of our 2008 allocation. In April 2020, we did a special springtime retirement for the remaining 50% of our 2008 allocation.
- Our internet service, operating for 15 years, has not yet retired any capital credits. We had our first capital credit allocation for internet service in 2016.
When the board votes to retire capital credits, we calculate the amount to pay each member. The oldest capital credits, from earlier years of operation, are paid off first.
When Will You Get Your Refund?
Once the amounts are calculated, checks are mailed to members. The checks are void after 90 days, so cash them promptly! If not, you’ll need to contact us to request a new check.
What to Do if You Move
If you move out of our service area, it’s important to keep your address updated with us, so we know where to send your capital credit retirement checks. Sometimes we lose track of former members and aren’t able to give them their retirements. Unclaimed capital credit retirements go to our energy assistance fund.
Early Retirements for Estates
If a member passes away and there are no living joint members, the member’s estate may request a discounted early retirement of capital credits. These early retirement requests are reviewed and approved by the Board of Directors on a case-by-case basis. For more information about early retirements, contact Office Manager Brenda Lewis at (541) 354-1233 or firstname.lastname@example.org.
Capital credits are one of the many benefits of co-op membership. If you have questions about your investment in our co-op, please contact us at (541) 354-1233 or email@example.com.