By Hillary Knox
La Plata Electric Association
The La Plata Electric Association (LPEA) Board of Directors voted at its meeting last week to retire $4 million in capital credits to LPEA members. Credits from 1996, 1997 and 1998 are being retired, so members with LPEA accounts during those years will see their share of LPEA’s margins (based on electric use) as a bill credit or check in November.
This retirement is in addition to the $1.5 million retired in July to pass the benefits of Tri-State’s 2 percent rate reduction directly to LPEA members. Since its incorporation in 1939, LPEA has returned close to $85 million in capital credits to its members.
“We give cash back to our members each year just before the holiday season because that’s when members need it the most,” said LPEA CEO Jessica Matlock. “The return of capital credits is just one of the many ways electric co-ops like LPEA are different from investor-owned utilities. When our members pay their electric bills, they are also investing in the cooperative. We enjoy being able to return any margins on that investment to our members annually.”
LPEA is a not-for-profit utility delivering electric services to its members at cost. As such, any payments made by members over what is needed to provide their electric service are placed into a capital credit account in each member’s name. When LPEA is financially able, those capital credits are returned to members. The dollars become “unclaimed” after three years when LPEA cannot locate members deserving of the refund and are then reinvested in our community through LPEA’s various grant programs.
The decision to issue capital credits and the amount refunded is determined by the LPEA Board of Directors on an annual basis, as financial circumstances permit. This year, the board elected to retire capital credits using the “first in, first out” (FIFO) method, which returns the capital investment of LPEA’s oldest members. More details on capital credits can be found at: lpea.coop/capital-credit-refunds.