Who hasn’t heard the Benjamin Franklin quote, “A penny saved is a penny earned?” The cooperative business model is an excellent example of how this advice is turned into reality for cooperative member-owners. It is one of the tools we use to keep our grid reliable and rates affordable.
Empire Electric Association is a not-for-profit electric cooperative that was formed in 1939 by the community of Dove Creek, Colorado, to provide electricity to the rural portions of Dolores and Montezuma counties as well as a small part of San Juan County, Utah. In 1952, EEA approved a capital credit plan to provide working capital to help the growing cooperative continue to build its grid to provide power for its member-owners.
EEA’s capital credit plan starts with member-owners using electricity and then paying their bill the following month. EEA sets its rates to generate enough revenue to cover expenses as well as a modest margin. The rate making process is not an exact science because the largest impact on energy use is still the weather. EEA also experiences expenses that cannot be planned for such as storm damage or equipment repairs and replacement resulting from vehicles colliding with our facilities. The planned margin provides a buffer and smooths out the cost of delivering power from year to year and ensures EEA has the funds to safely and reliably deliver the power our member-owners need.
Once accounting books are settled for a year, margin is allocated to our member-owners based upon how much power they used during the year. The dollars allocated to each membership grow your ownership in EEA. Your capital credit allocation represents your equity or ownership in EEA. The money you have invested means EEA has cash to operate with and reduces the amount of money we must borrow. Less borrowing means less interest expense, and that is a direct savings that reduces upward rate pressure.
This month you will see your 2024 capital credit allocation on the front page of your monthly bill statement. You will also receive a bill insert with more details on the capital credit process. Remember: if you use paperless billing or have a prepaid account, you can find your bill and the insert on SmartHub in the Bill & Pay menu under Billing History.
EEA’s capital credit plan is a fundamental part of our cooperative’s financial strategy and has been successful since its inception. EEA has returned more than $41 million dollars in capital credits to members. The current member equity is the foundation that allows EEA to operate from a strong financial base. We appreciate your confidence and trust in continuing to serve your electrical energy needs and managing our resources to maintain affordability and reliability.
Empire Electric Association’s primary mission is to safely, responsibly, and reliably meet the electrical energy needs of our member-owners.
