Vermont Electric Cooperative (VEC) will issue $850,000 in patronage capital distributions to its members for the first time in the Cooperative’s 75 year history, CEO Dave Hallquist announced Tuesday.
‘On behalf of the VEC Board of Directors and employees, I’d like VEC members to know how proud we are to be making our first patronage capital distribution ‘ especially as we celebrate VEC’s 75thbirthday,’ said Hallquist. ‘It’s taken many years of hard work and discipline to reach this important milestone, and it demonstrates that today VEC is a strong and healthy cooperative.’
Patronage capital is a unique feature of the cooperative business model and is based on the principle that the economic benefits of a cooperative’s operation should be returned to its members or reinvested in the co-op. Unlike shareholders of investor-owned utilities, a cooperative’s owners are its members (or consumers).
Calculated annually, patronage capital represents VEC’s earnings ‘ the amount of revenue that is left after paying for operating expenses. Patronage capital is allocated to members in proportion to the dollar amount each member was billed for electric service during that year.
Previously, VEC has used earnings for items like upgrades to VEC’s electrical system, to secure stable power-supply contracts, or to make other beneficial investments. With the adoption of new corporate policies to enable patronage capital distributions, VEC’s board of directors now has a new option to return earnings to its members. In the future, VEC directors will analyze the cooperative’s financial circumstances on an annual basis to determine how best to use patronage capital funds.
In April 2013, VEC’s board authorized the return of $850,000 in patronage capital funds to members during the years of 1997 and 2012 ($425,000 for each year). This amount represents a portion of the total patronage capital funds allocated to members who had VEC accounts during each of these years. Allocation amounts are based on how much electricity members were billed during each of those years and therefore refund amounts will vary from member to member.
Active members in good account standing and with patronage capital balances from these years can expect to receive a credit on their bills between mid-September and mid-October. Inactive (former) members who had accounts with VEC in 1997 or 2012 may be eligible for a patronage capital refund and will be notified by mail.
Current and former VEC members with questions about patronage capital are encouraged to contact VEC’s member service department at 1-800-832-2667.
For more information please visit our website at http://www.vermontelectric.coop/patronage-capital .
Established in 1938 to bring electricity to rural Vermonters, VEC serves its member-owners in 74 towns and eight counties. With 32,000 members, VEC employs approximately 100 Vermonters with headquarters in Johnson, Vermont, and service centers in Grand Isle, Newport and Richford.
Source: VEC 9.17.2013
Vermont Electric Cooperative issues patronage capital distribution to members
Submitted by tim
on