Vermont Electric Coop Returning $850,000 To Members
"It’s taken many years of hard work and discipline to reach this important milestone, and it demonstrates that today VEC is a strong and healthy cooperative.” -CEO Dave Hallquist
Vermont Electric Cooperative announced today it will issue $850,000 in patronage capital distributions to its members. It's the first time the Co-op has made such a distribution in its 75 year history.
“On behalf of the VEC Board of Directors and employees, I’d like VEC members to know how proud we are to be making our first patronage capital distribution – especially as we celebrate VEC’s 75th birthday," commented CEO Dave Hallquist. "It’s taken many years of hard work and discipline to reach this important milestone, and it demonstrates that today VEC is a strong and healthy cooperative.”
According to a press release issued by Vermont Electric Co-op, "patronage capital" is a unique feature of the cooperative business model, based on the principle that the economic benefits of a cooperative’s operation should be returned to its members or reinvested in the co-op.
Calculated annually, patronage capital represents VEC’s earnings – the amount of revenue that is left after paying for operating expenses. Patronage capital is allocated to members in proportion to the dollar amount each member was billed for electric service during that year.
In previous years, the Co-op has reinvested earnings in upgrades to its electrical system and used capital to secure stable power-supply contracts. The Co-op recently adopted new corporate policies that enable patronage capital distributions. With the new policies in place, Co-op directors will analyze the finances annually to determine how best to use patronage capital funds.
In April 2013, VEC’s board authorized the return of $850,000 in patronage capital funds to those who were members during the years of 1997 and 2012 ($425,000 for each year). Active members in good account standing and with patronage capital balances from these years can expect to receive a credit on their bills between now and mid-October. Former members who had accounts in 1997 or 2012 may be eligible for a patronage capital refund and will be notified by mail.