 As part of a cooperative, electric bills are not just payments for
service, but an investment in a company you own. Members of United
Cooperative Services are not only in control of selecting directors to
manage the co-op — United customers also share in cooperative margins.
After all operating costs have been paid for the fiscal year, members
may receive a part of the money left over, which comes in the form of
member dividends.
On Sept. 21, 2007, United Cooperative Services will issue more
than $3.1
million in member dividends,
formerly called
capital credits,
to approximately 180,000 members and former members of the electric
cooperative.
Member dividends
accumulate based on the amount of electricity used by each member. Each
year, United’s board of directors may vote to retire a portion of these
dividends, based on the financial stability of the cooperative. (Note:
Dividend checks are issued when the credited amount is $20 or greater.
Credits up to $19.99 are applied to active accounts.)
“For-profit utilities serve two masters—their shareholders and then
their customers. In an electric cooperative, they’re one in the same,”
said United CEO Ray Beavers. “The electric cooperative business model,
by its very nature, is defined as one owned by the people who benefit
from its service. Nothing demonstrates that our members are owners
more clearly and succinctly than when they receive a member dividend
check,” emphasized Beavers.
“On
behalf of the United Cooperative Services board of directors, which
clearly understands and exudes the merits of the cooperative business
model, it’s a privilege for United to return more than $3.1 million in
member dividends to approximately 180,000 present and former
member-owners,” said Beavers.
Electric cooperatives
presently have only one primary source of equity capital, that which is
contributed by the members. Member equity is the essential tool for
United to build, maintain, and upgrade the facilities necessary in
providing the reliable, economical electric service its members have
grown accustomed to receiving from their electric cooperative. Since
2000, United has returned more than $20 million in member dividends to
current and former members.
“When
members pay their electric bill each month, they’re not only paying for
the reliable service, but investing in the company in which they partly
own,” said Beavers. “As a result of that equity stake in the business,
United members share in cooperative margins, meaning that after paying
for all operating costs for the fiscal year, members may receive a part
of the money left over, which comes in the form of a member dividend
check,” added Beavers.
United’s electric rates
are among the lowest in North Texas—something the co-op hopes its
members are as proud about as United’s 151 employees and the eight board
members who direct the policies that exemplify what a member-owned
electric cooperative embodies.
“Receiving a member dividend demonstrates how United Cooperative
Services really is united with and committed to its members,” said
United Board President Jack McCaslin. “The board takes its
responsibility seriously in representing United’s 50,000 members and
will continue to do so with integrity, accountability, innovation and
our longstanding commitment to community,” added McCaslin.
The amount of member
dividends retired each year fluctuates; it is determined by the board of
directors and based on the equity necessary to maintain financial
soundness of the co-op.
Electric utilities
are a capital-intensive industry requiring a large investment in plant
and equipment. A large amount of cash is necessary to keep up with
construction during periods of fast growth, such as that experienced in
United’s service areas in recent years. Member dividends and borrowed
capital allow United to serve a growing number of consumers while
implementing the latest technology to provide the best possible service.
Remember, if you
have moved and are a former member of United, your address needs to be
kept current with the cooperative in order for you to receive your
member dividend refunds in future years. |
