Editorial: The Cooperative Difference

Editorial

The Cooperative Difference

Marcy Svenningsen, Board Chair

One of the biggest challenges for the Board of Directors and the staff at Cass County Electric Cooperative is trying to explain the cooperative difference. Here are some of the most common questions I have gotten from other members.

“What’s this about being a member or an owner? I’m just a customer who buys electricity from Cass County Electric, right?” At Cass County Electric Cooperative, we are owned by you, our members. When you signed up to receive electric service from Cass County Electric Cooperative, you became a member of an electric cooperative. We are a community-focused organization working to efficiently deliver affordable, reliable and safe energy to you, our consumer-members. As a member,

• You earn capital credits.

• You have a right to vote for the directors who make decisions about what happens at the cooperative.

• You have a right to run for the board of directors.

“What are Capital Credits?” Capital credits are unique to cooperatives. As a cooperative, we belong to the communities we serve, so any excess revenues are shared back with the members. This is one way that cooperatives differ from investor-owned utilities, who pay out dividends to shareholders, who may or may not be customers of the utility. At the end of the year, after we’ve paid our bills, we have money left over, or margin. It’s not profit because, in a cooperative, we allocate the margin back to the members who bought electricity from us during the year. The amount of electricity you purchased compared to other members determines your share of the margin and becomes your “capital credits.”

“How come I don’t receive Capital Credits the year they are allocated?” As a member, you can see the margin each year at the annual meeting or when the amount is published in Highline Notes. The margin at Cass County Electric has consistently been $5 to $6 million for several years. However, that money isn’t sitting in a bank account called “capital credits.” We reinvest these funds in building a reliable power grid to continue to deliver reliable electricity to your home, farm, and business.

“When can I expect to get paid for the Capital Credits I’ve earned?” In 2018, Cass County Electric paid back or retired the capital credits that our members earned in 1993 and 1994 totaling $1.59 million. In 2019, we will retire $1.78 million. If you were a member then and still a member today, you saw that payment in the form of a credit on your bill. For members who have moved away, they received a check in the mail. It’s imperative to make sure Cass County Electric has your current address even if you move because, at some point, we want to pay you for your capital credits. In the case of a death, the estate can apply for the payment of the capital credits.

“Why is there a Board of Directors?” At Cass County Electric Cooperative, we are member-driven. Members like you lead us, they understand and listen to our community. Their primary duties are to watch over the financial health of the cooperative for all members, to hire and to hold the Chief Executive Officer (CEO) accountable for operations of the cooperative, and to establish the electric rates. The Board can make adjustments during the year to manage the margin – like we did this past November and December by lowering the rates of the members by a total of $750,000. This kind of flexibility is one of the unique advantages about being a cooperative.

If you have questions about your cooperative – please don’t hesitate to ask and I hope to see you at the annual meeting!