Capital Credit Retirement
The Hood River Electric Cooperative (HREC) Board of Directors has authorized a second capital credit retirement for 2020.
The board had previously authorized a special retirement in April 2020 to assist members who were facing financial hardship due to the COVID-19 pandemic.
This capital credit retirement pays out:
- The 2009 patronage capital allocations for electric division members
- 50% of the 2016 patronage capital allocations for internet division members
These payments will be sent out by check in mid-November or applied to individual accounts.
Capital Credits: A Return on Your Investment
HREC is a not-for-profit cooperative.
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.
The co-op tracks revenues and expenses separately for electric and internet 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.
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.
Capital credits represent your share of the margins, or net income, the co-op earns while providing service each year.
The size of your share is based on your proportional share of the services provided to all members.
We save the extra money for a few years in case there’s an emergency or system improvements needed.
The Board of directors meets each year to decide how much of the fund to retire. Then we return the funds to members. We call this process capital credit allocation and retirement.
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.
The Board of Directors Retires Funds
Our Board of Directors decides how much of the fund to retire each year. They make separate decisions for each service.
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.
- Operating for about 15 years
- Will retire capital credits in November 2020
- We will retire 50% of the capital credit allocation for 2016, which is $91,913
Operating for about 75 years, and usually returns some capital credits in November of each year.
Here are some recent retirements:
- In November of 2019, we retired the balance of our 2007 electric service allocation, and 50% of our 2008 allocation, for a total of $514,968.
- In April 2020, we did a special springtime retirement for the remaining 50% of our 2008 allocation, which was $367,999.
- In November 2020, we are retiring 100% of our 2009 allocation, which is $859,944.
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.
Apply Credits to Bill
If you prefer not to receive a check in the mail, you may request that your capital credit refunds be applied to your HREC bill.Apply Credits
Donate Your Credits
You can donate your credits to HREC’s member assistance fund.Donate Credits
Moving or Need an Early Retirement?
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.Unclaimed Capital Credits
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.