LPEA members receiving nearly $2.5 million in “patronage capital”

Refunds to be made in current August-September billing cycle

 

Archuleta and La Plata County businesses and residents, who have paid their electric bills to La Plata Electric Association (LPEA) for at least one year, are currently receiving patronage capital refunds.

In August, the LPEA Board of Directors voted to refund $2.475 million in patronage capital (also known as capital credits).The majority of the patronage capital refunds will be credited to electricity bills during the current billing cycle, though any refund amounts larger than $100 will be mailed as checks.

“These can in some ways be thought of as dividends for our member-owners, but these refunds do differentiate us from other types of utilities,” said Greg Munro, LPEA CEO, noting that LPEA is a not-for-profit corporation with a 501 (c)(12) tax designation.  “As part of that tax designation, which establishes us as a cooperative, we are required to refund capital credits to our members as we can afford to do so. We give the money back to our members instead of giving it to investors as with for-profit companies.”

Annually, the electricity payments made by members in excess of the cost of providing their electric service (called the “margin”) is placed into a patronage capital account in each member’s name. This capital, along with borrowed funds, is used to finance needed improvements to LPEA’s system infrastructure.

“In other words,” said Munro. “LPEA invests the margins earned by each owner back into our system. It helps build members’ equity and reduces the amount of money LPEA has to borrow – so it reduces interest charges we’d have to otherwise pay. The margins allow LPEA to maintain system reliability at its highest level and help keep rates low.”

Annually, should the patronage capital account reach a level in excess of the amount LPEA needs to maintain the system, the cooperative “retires,” or gives back, a percentage of the funds. For 2010, LPEA is retiring capital credits earned in 1990, as well as a portion of capital credits from 1991 through 2009. Thus anyone with an established LPEA account in 2009 or prior, will receive funds in proportion to the member’s contribution to LPEA margins. Since incorporation in 1939, LPEA has been able to refund nearly $30 million.

LPEA, a Touchstone Energy Cooperative, provides to its more than 30,000 members with in excess of 43,000 meters, safe, reliable electricity at the lowest reasonable cost, while being environmentally responsible. For additional information, contact LPEA at 970.247.5786 or visit www.lpea.coop.