Each month, ECI REC’s Board of Directors reviews the many variables that impact your Cooperative’s financial health, including debt obligations, the cost of purchase power, margins, and our cash position. At this year’s May meeting, your Board concluded that it was in ECI REC’s best interest to postpone retiring patronage dividends until 2024. (CEO Teresa Floyd shared this news in the July/August Heartland Link newsletter.)
The past five months have unfolded very positively. Along with the March rate increase and rate structure changes, CIPCO’s cost of power has so far been lower than anticipated. ECI REC’s overall financials remain solid, and our margins are improving. As a result, at the September meeting, your Board of Directors approved the retirement of $453,324—100% of our 2008 margins—to members of the Cooperative.
This month (October), 6,031 member-accounts that received electricity from East-Central Iowa REC in 2008 should receive money back. These dollars represent your share of the deferred patronage dividends (profits) the Cooperative earned in that year. In the past 10 years, ECI REC has returned $5,261,706 to its membership.
Over sixty-two percent (62.19%) of the 6,031 member-accounts receiving money back are active and currently receiving electricity from ECI REC. These active member-accounts will see a credit on their October bills. The remaining 2,280 member-accounts that are no longer active (not currently receiving electricity from ECI REC) will receive their credits in the form of a check that will be placed in the mail on October 13. If you do not receive a credit on your October bill, you did not receive electric service from ECI REC in 2008. Email the Urbana office at csr@ecirec.coop or call 877-850-4343 if you have any questions.
Since ECI REC is a nonprofit organization, members pay for their electricity at cost, and any margins left over at the end of the year after all expenses are covered are allocated in the form of patronage dividends. These margins include operating margins, which are generated directly by the sale of electricity to you. They also include non-operating margins, which consist of interest from our investment of spare cash and patronage dividend allocations. ECI REC receives these allocations through memberships with other cooperatives from which we purchase goods and services.
As owners of the Cooperative, members provide equity by allowing ECI REC to hold on to these margins for a certain length of time. They are used to finance operations and system improvements, to cover the cost of maintaining the electric distribution system, and more.
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