by Steve Rau, Board president
At its December meeting, the ECI REC Board of Directors approved a measure to return $500,000 back to the Cooperative’s members through an energy credit.
We are able to issue this credit because sales were higher than expected in 2014. The fact that the staff of our Cooperative did an outstanding job of managing 2014 expenses, which came in under budget, also contributed.
The Board chose the route of an energy credit rather than designating the excess toward patronage dividends. An energy credit is different than patronage dividends—money reaches active members who contributed to the additional sales, and are still being served by the Cooperative, thus reaching members more quickly.
Current ECI REC members who received electric services from the Cooperative in 2014 will see an energy credit on their January bills (December usage). Look for the line item “2014 Energy Credit” (see the sample below). The credited amount is figured based on revenues via each member’s total electric bill for the year 2014.
Though circumstances for an energy credit do not occur annually, it is definitely something your Board of Directors will look closely at in years when year-end financials are similar to those we had in 2014.
In considering whether to give year-end energy credits, your Cooperative adheres to policies which govern financial goals that encompass long-term debt, equity, Times Interest Earned Ratio (TIER), margin allocations, patronage dividends retirement, and more. When these financial targets are met within a given year, and the margins exceed those outlined in the Cooperative’s policy, an energy credit is an option.
The 2014 energy credit is the largest in the Cooperative’s history. The last time ECI REC’s Board approved an energy credit for members was in 2004, and the amount credited back was $350,000. In both 1997 and 1999, $200,000 was returned to members through energy credits.