SEC Retires $5 Million in Capital Credits to Members
Southside Electric Cooperative (SEC) retired approximately $5 million to members across portions of 18 counties served by the co-op. This record-breaking retirement is twice the amount of SEC’s highest capital credit refund in its 77-year history.
When you signed up to receive electric service from SEC you became both a member and an owner of a not-for-profit electric utility. While investor-owned utilities return a portion of any profits back to their shareholders, electric co-ops operate at cost. So instead of returning leftover funds to folks who might not live in the same region or even the same state as you do, SEC periodically retires a portion of your allocated excess revenue (in the form of a capital credit refund) based on the electricity that you have purchased and the amount of time you have been a member.
“Allocating and retiring excess revenue to members helps distinguish cooperatives,” points out Jeff Edwards, SEC president & CEO. “This year’s unprecedented capital credit retirement is a reflection of the commitment that your co-op’s Board of Directors and I have made to ensure that SEC’s members truly own their electric utility. We’re also proud to support our communities by putting money back into the local economy — and into the pockets of those we serve. It makes our business model quite unique, in this day and age.”
The return of capital credit retirement checks to members reflects their contribution of capital to, and ownership of, the cooperative over time. The checks represent the retirement of at least 6.4 percent of the balance of individual members’ total SEC capital credit allocations. Your cooperative is extremely proud to return this money to its member-owners, and it’s important that you understand how these funds have benefited us. These funds have helped your co-op keep rates competitive, reduced the amount of money we needed to borrow from outside lenders to build and maintain a reliable electric distribution system, and helped cover emergency expenses such as those incurred during hurricanes or major ice storms.
“Capital credits are paid back in cash to the members as the cooperative is financially able to do so,” notes Edwards. With this year’s retirement of Southside Electric Cooperative approximately $5 million to active and inactive members, a total of nearly $44 million will have been refunded to SEC members over the past 30 years. “SEC is, however, limited by the Rural Utilities Service, its primary mortgagee, as to the amounts it can return annually,” Edwards adds.
Since 2008, SEC has been among the highest-ranking electric co-ops, both nationally and in Virginia, in terms of capital credit retirements. At this year’s historic $5 million level, SEC may rise to the very top of that list. “Retiring capital credits is the Cooperative Difference, and it’s just one more way SEC is looking out for our members,” emphasizes Edwards.
SEC | 2000 W. Virginia Ave | Crewe, VA | 1-800-552-2118 | This institution is an equal opportunity provider and employer.