As a member of Pioneer Electric, you’ve likely heard us talk about the “value” of membership. Access to safe and reliable energy at an affordable cost, scholarships and youth programs, grant opportunities and community investment are all part of the value of membership. Did you know that there is also monetary value in membership?
Like all cooperatives, Pioneer Electric is owned and led by the members it serves and operates at-cost. This means that any revenue the cooperative generates in excess of its’ operating expenses goes back to members in the form of capital credit allocations. Through the process of allocating (setting aside) year-end margins and retiring capital credits (returning money to members in the form of a check), members experience the VALUE of membership.
Retiring capital credits is unique to the cooperative business model, but the process involved can be complex and difficult to understand. Pioneer Electric breaks the process down into four parts: Part One – Membership, Part Two – Allocate, Part Three – Evaluate and Part Four – Retire.
Membership
What does it mean to be a member of Pioneer Electric? It means you are more than just a customer – you’re an owner. This means that each member has a financial stake in the equity (margins) of the cooperative based on their patronage (usage) over time.
Membership is determined by having (or previously having) service within Pioneer Electric’s service territory. Whether you currently have service with Pioneer Electric or lived on our lines 30 years ago – You’re a member!
Members who no longer live within Pioneer Electric’s service territory are still eligible to receive capital credits for the years they were members.
Allocate
Each year, Pioneer Electric allocates (sets aside) any year-end margins that are in excess of the cooperative’s operating expenses to our members. This allocation is based on each member’s patronage contribution (or how much electricity the member used) for the year.
Evaluate
Evaluating the financial strength of the cooperative is an essential step in the capital credit process. Pioneer Electric’s member-elected Board of Trustees examines the cooperative’s financial standing, determines the total dollar amount to retire (if allowed), and votes whether or not to approve the retirement of capital credits.
Retire
Historically and again in 2022, the Board has employed a “hybrid” method when retiring capital credits. The hybrid method divides the total approved retirement amount, paying 25% towards the most current year on record (2021) and 75% towards the oldest year on record (1999). Members with patronage allocations in either of these two years will receive a retirement check.
As a member-owner, Pioneer’s members may also receive additional capital credits on behalf of Sunflower Electric Cooperative, Pioneer Electric’s generation and transmission (G&T) provider. If Sunflower retires capital credits to Pioneer Electric, the Pioneer Electric Board of Trustees votes whether or not to approve the retirement of G&T capital credits. The hybrid method is also used for G&T retirements, dividing the approved retirement amount by paying 75% towards the oldest year on record (2011) and 25% towards the most current year (2021).
Check, Please!
This year, Pioneer Electric’s Board of Trustees has approved the retirement of $4.4 million in capital credits back to members. Capital credits will be distributed in the form of a check and available for pick up at Pioneer Electric’s annual Member Appreciation Event.
Member Appreciation will be held Dec. 16 the Grant County Civic Center in Ulysses from 4 p.m. to 8 p.m. Members will have the opportunity to pick up their check, enjoy a complimentary meal and enjoy live entertainment.
For more information regarding the retirement of capital credits, receiving your check or Member Appreciation visit www.pioneerelectric.coop or call 620-356-1211.