Baldwin EMC CEO Karen Moore
Think of your favorite grocery store chain. You probably go there once or twice a week (maybe more), and like the typical American family, spend quite a bit of money in the process.
Now imagine it’s the end of the year, and that favorite grocery store sends you a refund check, because what you spent on groceries was more then what was needed to stock their shelves.
If this scenario is hard to envision, that’s because it’s not a common practice, unless you happen to be doing business with a cooperative. Not only do not-for-profit co-ops like Baldwin EMC keep our operating costs as low as we soundly can, we also give back any extras.
Every year, Baldwin EMC’s finance and accounting department reviews our expenses for the year before and compares it to the amount of revenue we took in during the same time period. If we collected more from our members than we needed to continue operating, we’ll credit the margins into what we call “capital credit accounts” for each member. The amount of each credit is based on how much electricity a member used during that year.
Capital credits are somewhat similar to the dividends that investor-owned utilities pay to their shareholders. The difference is that our “shareholders” are also the people that we serve and the “dividends” (capital credits) are distributed to those member/consumers. Capital credits reflect each member’s ownership in the cooperative.
At their August board meeting, Baldwin EMC’s board of trustees reviewed the financial status of the cooperative and determined that we were in good enough condition to retire some capital credits. For 2018, we’ll be retiring 1991, 1992 and 2017’s capital credits, for a total of approximately $4 million in refunds to members. If you were a member in any of those years, be on the lookout for your refund check this month.
Electric cooperatives have retired more than $15 billion in capital credits to members since 1988. Imagine what your bank account would look like today, or what society as a whole would look like if every business operated in the same way cooperatives do, by ignoring their own financial gain and simply doing what’s best for the people they serve.