Pedernales Electric’s Board of Directors, in a 5-1 decision, voted in its Oct. 30 special-called meeting to issue up to $4 million in capital credit refunds, primarily in the form of checks, which will be distributed in November.
Capital credits are unique to cooperatives. PEC members invest in PEC through the electricity they use, and members share in PEC’s positive financial margins in the form of capital credits. Some of those margins are reinvested in PEC operations. When financially feasible, a portion of those allocated margins may be refunded back to members as a capital credit distribution. During his opening remarks, Board President and District 6 Director Larry Landaker expanded on the benefits electric cooperatives offer members.
“Electric cooperatives are different than corporate utilities. A cooperative is an organization of people with a mutual interest in providing themselves a service on a not-for-profit basis,” Landaker said. “PEC is owned by the members it serves, and our members have direct input over how their utility is operated.” He then asked for the Board to vote in favor of the capital credit resolution.
PEC General Manager Juan Garza added that PEC is dedicated to educating its members about cooperative principles and business practices, including helping members better understand capital credits and other economic benefits of a cooperative.
“By deciding to distribute capital credits in the form of a check, we are trying to give our membership tangible evidence of their financial participation in PEC,” Garza said. “Our Board also is taking the time and making a significant effort to inform our member-owners of the unique benefits of the cooperative business model.”
Because capital credits are based on the amount of electricity a particular member uses, the distribution amount will vary from member to member. Most eligible members will receive a capital credit check in
November; however, members with a capital credit distribution of $1 or less will receive a credit on their November bill.
Lee Ussery of Marble Falls, whose family was an early supporter of the Cooperative and neighbor of founding Co-op member E. Babe Smith, attended the meeting with his wife, Annette, and accepted a symbolic capital credit distribution check from Landaker.
“If families like the Usserys didn’t have faith in the Cooperative to bring reliable, affordable electricity, it might have been years until people of the Hill Country flipped on their front porch light,” Landaker said. “PEC wants our member-owners to have that same faith in their Cooperative today.”
In further action, the Board unanimously amended General Manager Juan Garza’s employment agreement to establish a firm, three-year term of employment through Dec. 31, 2012, with the Cooperative.
“This is a mutual decision between the Board of Directors and management,” District 2 Director James E. Williams said. “This reflects positively our opinion of management’s performance to date.”
In the member comments section of the meeting, comments were made regarding the distribution of capital credits and requesting more electric cooperative education for members, with special emphasis on defining and explaining the principles of electric cooperatives.
More information about capital credits and the benefits of being a Cooperative member-owner is online at www.pec.coop or by calling 1-888-554-4732.