When you signed up to receive electric service from Boone REMC, you became a member, not just a customer, of an electric utility. While investor-owned utilities return a portion of any profits back to their shareholders, electric co-ops operate on an at-cost basis. As such, they allocate and periodically retire capital credits, also called patronage, based on how much electricity each member purchased during a given time frame.
This month, Boone REMC will retire $224,599 in generation and transmission capital credits.
Boone REMC issues both distribution and generation and transmission patronage. Each month on your bill, you can see a breakdown of energy delivery charges and wholesale energy charges. Boone REMC is a distribution, or energy delivery, cooperative. When our financial condition permits, our operating margins are returned to members based on how much electricity members purchased in a given year or years.
The patronage we are issuing this month is a retirement for the remainder of 2009 and part of 2010. It will be issued to members who held an active account during those years.
Just like our customers are our member-owners, Boone REMC is a member-owner of its generation and transmission cooperative (also called our wholesale power provider), Wabash Valley Power Alliance (WVPA). We pass on wholesale energy charges to our members, so when WVPA issues patronage to Boone REMC, we can pass that along to our members as well. The capital credit retirement we are issuing this month is being passed onto our members from WVPA.
To learn more about capital credits, visit bremc.com/capital-credits.