La Plata Electric Association will refund $4.5 million in member capital credits with the November billing cycle.
The LPEA board approved the refunds at their Oct. 15 meeting. Most credits will be shown on electric bills, but refunds larger than $100 will be mailed as checks.
The timing is a change from refunding credits in the summer, with the idea that the credits will be more welcomed as the end of year holidays approach.
The refunds include pass-through of retired capital credits from LPEA's electric supplier, Tri-State Generation & Transmission. LPEA is one of 44 coop members of Tri-State.
"We have received $2 million from Tri-State that we are directly passing on to our members," said LPEA CFO Dennis Svanes. "The distribution will be first in, first out, so those who have been members since 1993/'94 will get the extra distribution."
Capital credits are what is left after all expenses have been paid, Svanes said. Member payments above the cost to provide their electric service are placed into a patronage capital account in each member's name. This capital, along with borrowed funds, is used to finance needed improvements to system infrastructure. Svanes said that allows LPEA to reduce interest costs of borrowing.
In years when patronage capital exceeds what is needed to maintain the system, the LPEA board "retires" (refunds) a percentage of the funds. For 2014, LPEA is retiring $1.25 million on a first in, first out basis for credits earned in 1993 and '94, and $1.25 million on a percentage basis (approximately 2.2 percent) for remaining amounts for 1993 through 2013.
Members since 2013 and before will get credits or payments in proportion to their contributions to coop margins. Former members who have moved out of the LPEA service area also are eligible for credits from previous years. Anyone moving out of the service area should give LPEA their new address so they can receive future credits from their time as members.
Since its incorporation in 1939, LPEA has refunded almost $40 million in credits.