Watch for Your Capital Credits Retirement
Claverack returning $1.7 million in capital credits to its consumer-members
WYSOX, PA — Claverack Rural Electric Cooperative will return $1.7 million to members and former members of the cooperative this month.
Current Claverack members will see their share of the capital credits retirement as a credit on their June electric bills. Former Claverack members who are entitled to a capital credits refund will be issued checks for their portion of the retirement.
Capital credits reflect margins the cooperative realizes at the end of each year. Margins are generated when income exceeds expenses. In other businesses, this excess revenue would be called profits.
Because cooperatives are member-owned, not-for-profit enterprises, margins are allocated back to the consumer-members in the form of capital credits.
The cooperative retains margins for a period of time to be used as working capital to assist in the financing of plant replacement and to build and maintain the electric system. When the co-op is financially able to do so, it retires margins by returning capital credits, also known as patronage capital, to members.
There are two stages in the capital credits process: allocation and retirement. During a year in which the co-op achieves a margin, members earn a share of that margin based on their payments to the cooperative for electric service during the year. Members are notified of this allocation via a mailing each May.
The second stage is retirement. This is when allocated capital credits are paid to the members who earned them.
Each year, the Claverack board of directors evaluates the financial health and capital needs of the cooperative and determines whether a retirement is feasible.
Although Claverack went for many years without retiring capital credits, the cooperative has refunded approximately $9 million in capital credits to members and former members since 2011.
The $1.7 million in patronage capital being retired this year includes patronage allocations from 1985 and 2017, as well as generation and transmission allocations from 2007, and discounted retirements to the estates of deceased members.
“I am pleased that we are in a position to return a significant amount of patronage capital to cooperative members for the eighth consecutive year,” said Bobbi Kilmer, Claverack’s president and chief executive officer.
Jim Luce, chairman of Claverack’s board of directors, said the board always considers the financial standing of the cooperative before approving the return of margins to members.
“Claverack experienced a very solid year in 2017,” he said. “Being able to return capital credits refunds to our members reflects very positively on the financial health of the cooperative.”
Luce added that capital credits refunds are one of the many benefits of being a member of an electric cooperative.
“Co-ops exist to make sure the needs of their members are being met, not to make a profit,” said Luce. “When we have a positive financial year, the members are able to share in the profits through capital credits refunds.”
Claverack, with headquarters in Wysox, provides electric service to approximately 18,000 meters in Bradford, Susquehanna, Wyoming, Tioga, Lycoming, Sullivan, Lackawanna and Luzerne counties.
Please click here to access our May edition of Penn Lines to learn more about Capital Credits.
The capital credits retirement will be applied as a credit to some of our members' bills beginning with the June 15 billing cycle. The remaining members will see their credit applied with their new July bills. Just look under the "Detail of Charges" section of your bill for your credit - another great benefit of being a member of a cooperative!