SEC Directors Approve 2022 Retirement of Capital Credits
Members Will Receive Benefits in December
Southside Electric Cooperative member-owners are about to receive one of the benefits they enjoy from being part of the Cooperative.
SEC is retiring $2.75 million in capital credits this year, and that means eligible members will receive credits on their electric bills or will get checks in the mail. The distribution will take place in December. The SEC Board of Directors approved the retirement in August.
“Capital credits is one of the things that makes receiving electricity from a cooperative different than receiving it from an investor-owned power company that has shareholders and customers,” says Carol Myers, SEC’s chief financial officer.
Economic participation by all members is one of the Seven Cooperative Principles that SEC follows. As a not-for-profit and member-owned organization, SEC provides electric service at cost. This is unlike any for-profit electric utility, where a portion of the monies collected from customers is used to increase the wealth of shareholders. A fundamental practice that SEC takes to achieve operating at cost is the retirement of capital credits.
“I think that is one of the things that makes the cooperative business model such a great model,” Myers says.
Each year, SEC upgrades, operates and maintains its electric distribution infrastructure. Any revenues over and above the expenses for the year are considered margins and are utilized to help finance these costs so that SEC is not totally reliant on borrowing those monies. These margins are accumulated and represent the members’ ownership in the Cooperative.
Myers says the Board of Directors and staff review the Cooperative’s overall financial health each year before deciding on a capital credit retirement. She says SEC wants to get money back to members in a timely manner while maintaining a strong, stable financial picture so the Cooperative can continue providing safe and reliable electricity across the 18-county service area.
Next month, 57,761 active and former SEC members will receive capital credits. Members receiving less than $25 will have a bill credit and those getting $25 or more will be sent a check in the mail.
With inflation gripping the country, Myers adds that capital credits come at a good time.
“We are very aware that inflation and the cost increases on gas, groceries and other essentials have been really tough on our members. We are pleased to be able to retire 10% more capital credit dollars than last year and hope this will help during these hard times.”
With this year’s distribution, SEC has retired more than $68 million in capital credits in the last 39 years.
For more information, visit sec.coop/capitalcredits.