Serving Boone, Blowing Rock, Banner Elk, and other towns of the North Carolina High Country
Founded 05-05-05
April 17, 2008 issue
Blue Ridge Electric Capital Credits Explained
Story by Anna Oakes
When you receive the Blue Ridge Electric 2007 Annual Report in the mail, don’t throw it away—there could be money in there!
In May, Blue Ridge Electric Membership Corporation will retire $2 million in capital credits, either in the form of a check or a bill credit to its customers. Here’s a little more information about capital credits. To learn more, call 828-758-2383 or click to www.blueridgeemc.com.
What is a capital credit?
Because Blue Ridge Electric is a not-for-profit cooperative, its customers are also member-owners. Capital credits serve as the cooperative’s source of equity—they are the margins allocated to cooperative members based on their electricity purchases.
Part of your monthly power bill is used for capital credits. In other words, after Blue Ridge Electric pays the expenses for providing electricity, any leftover funds—capital credits—are retained for a period of years as reserve funds. These funds are used as working capital to keep the cooperative financially sound and to allow for emergencies, such as storm damage, that might require replacement of poles and power lines, and also to balance equity and debt requirements as investments are made in the electric system.
How often are capital credits retired?
Each year, the Blue Ridge Electric Board of Directors meets to determine whether to issue a capital credits retirement, said Renee Whitener, director of public relations for Blue Ridge Electric. The board considers the fiscal health of the cooperative in deciding if it will distribute a portion of the capital credits balance back to members.
“In many, many years, we’ve never missed retiring capital credits,” Whitener said. “That is something that we want to do every year because it is the great benefit of belonging to a cooperative.” According to the cooperative’s April 2008 newsletter, more than $24 million has been returned to members since Blue Ridge Electric was founded in 1936.
The April 2008 Blue Ridge Electric newsletter states that this $2 million capital credits retirement is the largest capital credits retirement in the cooperative’s history. Why is that?
Whitener said that a major reason Blue Ridge Electric is able to return so much in capital credits this year is because the cooperative recently negotiated new wholesale power agreements with its supplier, Duke Energy. Because of savings on electricity costs, the board decided to issue a larger retirement this year.
“Because we’re member-owned, we try to be very frugal all around in our operations,” she said.
How much money will I get?
Your share of capital credits is based on how much you have paid Blue Ridge Electric for service. Customers who are due a refund of $15 or more will receive a check. According to Whitener, 20,957 customers will receive a capital credits check—with the average check amount being $47.18.
Customers who are due a refund of less than $15 will have that amount credited to their power bill. Whitener said 30,411 members will receive bill credits at an average of $5.77.
Customers who are new to Blue Ridge Electric may not have accumulated enough electricity usage to qualify for a capital credits refund.
How will I get my money?
In the past, Blue Ridge Electric has mailed its capital credits checks and bill credit information in December, but this year, capital credits will be included inside the 2007 Annual Report mailed to all members in May.
Members will receive one of three inserts: a capital credits refund check, information about a bill credit and when it will be applied, or—for new members who do not qualify for a capital credits refund—information about how capital credits work.
Do businesses get capital credit refunds?
Yes. Any member of Blue Ridge Electric, whether business or resident, is eligible to receive a capital credits refund.
I purchase electricity from New River Light and Power in Boone. Will I receive a capital credits refund?
No. New River Light and Power is a nonprofit subsidiary of Appalachian State University—not a cooperative. It purchases electricity from Blue Ridge Electric, and receives a capital credits refund as one of its members. New River Interim General Manager Greg Taylor said that refund is deposited into a reserve account.
What happens to members’ capital credits when they die or move away?
Upon the death of a member, the capital credits account will be available for the estate retirement process. If the account is set up as a joint membership (two people), half of the capital credits account will be available for the estate if one of the members dies. An estate administrator should contact Blue Ridge Electric to settle the capital credits account.
Members who move away and are no longer using the Blue Ridge Electric service are still entitled to their capital credits refunds. They will continue to receive a refund until their capital credits account balance is zero, Whitener said.