Pioneer Electric is proud to announce the approval to retire $1.8 million back to members in the form of capital credit checks. Active memberships with service during the years 1996, 1997 and 2016 may be issued checks. Please note, capital credit checks will not be available to members with accounts that have a past due balance as of Dec. 1, 2017; instead the credit will be applied toward any unpaid balance. Capital credit checks that aren’t picked up during Member Appreciation Days will be mailed on Dec. 11.
Understanding Capital Credits
When you signed up to receive services from Pioneer Electric Cooperative you became a member of an electric co-op. While investor-owned utilities return a portion of any profits back to their shareholders, electric co-ops operate on an at-cost basis. So instead of returning leftover funds, known as margins, to folks who might not live in the same region or even the same state as you do, Pioneer Electric allocates and retires capital credits to you, our member-owners. There are two things about capital credits you should know in order to see how they work for you.
- Allocation: Each year, you are allocated (or booked) your portion of the previous year’s profit, based on the amount of electricity you purchased from Pioneer Electric, in relation to the total amount of electricity purchased by all members during the year. This amount is put into a “holding account” for a number of years and used by Pioneer Electric to fund capital needs for items such as power line construction, transformers, trucks, inventory and other equipment. This is an underlying principle of the cooperative business model and helps keep your electric rates as low as possible. This “allocation” becomes your equity in the co-op and is maintained in a separate account assigned to you.
- Retirement: Retired (paid) capital credits is what you will get in cash at a later date. Pioneer Electric uses the amount allocated (booked) to you for a time, but then returns this amount to members in the form of “retirements,” which are “cash back” dollars to you.
Please note, that Generation and Transmission (G&T) allocations from Sunflower Power Corporation will NOT be distributed during the member appreciation celebration. The allocations from Sunflower Electric (found in your 2017 allocation statement) will only be distributed after they are retired (paid) by the Sunflower Board of Directors. For questions regarding G&T allocations, please give us a call at 620-356-1211.