With widespread financial hardship in the wake of the COVID-19 pandemic, the Coastal Electric Cooperative board made a decision to allow the early return of $2.4 million in capital credits beginning June 1 to members who paid their electric bills to the co-op in 2019.
According to a press release, the retirement will occur 6 months ahead of schedule to help meet members’ immediate needs, instead of year-end, which is the usual time for capital credit refunds.
“We know, because of this pandemic, many of our members have suffered a loss of income, through no fault of their own,” said Coastal Electric Cooperative CEO Chris Fettes. “So our thoughts immediately turned to, ‘How can we best serve our members in this particular time of crisis?’”
This is the single largest capital credit return to members in the company’s history, the press release stated. To date, Coastal Electric Cooperative has retired over $10 million in capital credits to members.
Current members will see their refund as a credit on their June electric bill.
Retiring capital credits is part of the not-for-profit cooperative business model. When member revenues exceed costs, those margins become the member’s equity in the cooperative. When the financial strength of the cooperative allows, the board of directors can order the return of a portion of that equity.
Concurrent with the Governor’s declaration of a state of emergency, Coastal Electric announced it would suspend cutoffs of residential accounts for past due balances, as well as late fees that would have otherwise been added to those bills. As the crisis developed, the co-op extended the “no cut-off” policy until July 1.
Fettes said co-op employees would continue to work with members on an individual basis to help them become current on their accounts.