At its September meeting, your board of directors approved the retirement of capital credits. Members who bought energy from Hood River Electric Cooperative in 2004, 2005 and/or 2006 should receive a check for their patronage in November.
The total to be returned to the membership of the years listed above is more than $918,000, which I believe will be the largest amount retired in a single year. HREC has retired capital credits in the range of $500,000 to $600,000 annually in recent years. The cold winter of 2016-2017 generated unexpectedly high margins in early 2017. Coupled with the retail rate increase effective in April, that kept the margin for this year well above normal. Recognizing the double hit to members in 2017, your board of directors approved a larger-than-normal capital credits refund. We hope it will offset higher energy bills for 2017 to some degree.
I am proud to acknowledge your cooperative is one of the most aggressive in the country at retirement of these margins. In the 2016 Key Ratio Trend Analysis report of the National Rural Utilities Cooperative Finance Corporation, HREC ranks 13th of 704 participating cooperatives for cumulative patronage capital retired as a percentage of total patronage capital. We rank No. 1 of 16 in Oregon and No. 2 of 49 electric cooperatives of similar size nationwide. Following the 2017 retirement, HREC will have returned more than $11.5 million to past and current members. That figure exceeds half the capital credits accrued since inception of the utility.
October is National Co-op Month. Please join me in recognizing other local businesses that embrace the cooperative model: Hood River Supply, Diamond Fruit Growers, credit unions and many more. The publisher of this magazine, Ruralite Services, also operates as a cooperative.
John Gerstenberger, Manager