Two Capital Credit Retirements in 2020
Each year, Wells Rural Electric Co. (WREC) returns revenues above expenses to members in the form o e last year’s chaos, WREC’s Board of Directors made two such returns in 2020.
While WREC’s members have had margins returned to them each year for several decades, such credits are not mandatory or even guaranteed. The return of capital credits is a sign the company continues to operate on a not-for-profit basis. Typically mailed in the spring, capital credit checks were delayed this year as the WREC board decided to wait to determine how COVID-19 would impact the cooperative and WREC’s ability to maintain reliability.
In the end, the board made one retirement as a bill credit targeting active members during the summer and made a traditional retirement in December.
After watching COVID-19 play out for several months, the board decided in July to make the initial capital credits retirement for 2018’s allocations, meaning all active members in 2018 received a bill credit that waived the typical $10 minimum requirement for members to receive funds. This retirement had several benefits:
- The retirement provided immediate relief in the communities WREC serves, many of which struggled with layoffs, furloughs, and closures.
- Because it showed up as a credit, members did not have to worry about physically cashing a check while protecting themselves from COVID-19.
- Even if it was only a few dollars, all members with active accounts in 2018 received some level of relief on their bills.
After that initial retirement, the board continued to monitor how COVID-19 affected the company and decided at its November meeting to make WREC’s traditional retirement as well. The co-op mailed checks to all members who had accrued at least $10 in mid-December.
These credits represent one of the best examples of the cooperative difference. As a utility that provides electricity to member-owners at cost, WREC is not bound to maximize investors’ profits. Instead, any revenue over what is needed to run the company and maintain a healthy margin is returned to members according to the amount of electricity they used.
In 2020, when so many people struggled to make ends meet, WREC’s board was happy to double its normal retirement to help our members and communities.