CREWE, Va – During December 2013, Southside Electric Cooperative will refund a total of about $2.4 million in capital credit retirement checks to its member-owners. The checks represent the retirement of approximately 3.3 percent of the balance of individual members’ total SEC capital credit allocations. Some former members who have moved out of SEC’s service area and who are no longer provided electricity by the Cooperative will also receive their share of this $2.4 million capital credit refund.
“Capital credits are paid back in cash to members as the Cooperative is financially able to make repayments,” relates Jeffrey S. Edwards, SEC president & CEO. With this year’s system refund of $2.4 million to active and inactive members, this means that a total of $38.9 million will have been refunded to the Cooperative’s members over the past 30 years. “SEC is, however, limited by the Rural Utilities Service (RUS), its mortgagee, as to the amounts it can return annually,” Edwards continues. Additionally, since 2008, Southside is among those electric cooperatives, nationally and in the state of Virginia, that have paid out the greatest number of capital credits to its members.
“All members of SEC have an economic stake in the Cooperative, both as users and owners. Capital credits, therefore, benefit the individuals, businesses and governments the Cooperative serves,” says Edwards. “Capital credit refunds also provide an indirect benefit and economic impact as they flow back into the local communities.”
As a member-owned electric utility, SEC provides electric service to its membership at cost. Any funds received above those needed to pay operating expenses, while providing safe and reliable electric service, are credited back to members based upon their individual electricity use. “This is the ‘Cooperative Difference,’ and what it’s all about,” Edwards notes. The funds returned to members are known as capital credits, and this distribution from not-for-profit utilities like Southside Electric Cooperative is somewhat similar to the dividends paid to the shareholders of investor-owned utilities. The difference, however, is that, while stockholders receive dividends based upon their number of shares and the profits earned by the company, each Cooperative member receives capital credits based upon the amount of electricity he or she purchased during a particular year.
Headquartered in Crewe, SEC is a member-owned not-for-profit electric utility serving more than 54,000 meters in homes and businesses throughout southern and central Virginia. Find us on the web @ www.sec.coop and on Facebook @ www.fb.com/SouthsideElectric. For additional information contact Allan Sharrett, SEC Manager of Public & Member Relations at 1-800-552-2118; extension 3211, or by e-mail:Allen.Sharrett@sec.coop.