Beltrami Electric Cooperative members will see a capital "credit" on their electric bills this month, just in time for the holiday season. This year the board of directors for Beltrami Electric approved retiring and paying more than $1.4 million in capital credits to current and former members in 2021. In addition, the cooperative paid out more than $200,000 in estate retirements, which brings the total capital credits paid in 2021 to more than $1.6 million.
For those that were a member of the cooperative prior to 2021 and have an active billing account, they will receive their capital credit refund as a credit to their bill in late November or early December (depending on their billing cycle). Checks to former members are scheduled to be mailed in mid-December.
Receiving capital credits are just one of the benefits of membership in Beltrami Electric Cooperative. “As a not-for-profit cooperative we are required by our lender, the federal government, to make a margin, and maintain safe, reliable electric service for member-owners,” said CEO Jared Echternach. “Our goal is to provide member-owners with electricity at a price that is as close to cost as possible. Over time co-op margins are returned to members in the form of capital credits.”
Member equity, or capital credits, is created when any earnings (revenues minus expenses) are left over at the end of each year. This creates a margin. At the end of each year, the co-op assigns each member’s account a share of the margin, known as an allocation, based on their purchases from the cooperative – or how much power the member used. Capital credits are distributed when the board authorizes a retirement.
Before returning margins back to members, electric cooperatives use the capital to help offset the cost of debt for equipment and materials used for the construction and maintenance of the electric distribution system. This helps lower financing needs.
Each year since 1984, Beltrami Electric's board of directors has authorized a retirement of capital credits to the membership. This year the board once again authorized a hybrid method, retiring 100% of the remaining co-op allocation from 1994 to wholesale accounts, 100% of the remaining co-op allocation from 1995 excluding wholesale accounts and 5% of the co-op allocation from all remaining unretired years excluding wholesale accounts. Under the hybrid method of retirement, more members and newer members realize one of the great benefits of membership and experience the cooperative difference. To date, more than $29 million has been returned to members in the history of the cooperative.
Beltrami Electric, a Touchstone Energy® Cooperative, is a member-owned electric distribution cooperative located in Bemidji, Minn. Established in 1940, Beltrami Electric provides power to over 17,900 member-owners within a 3,000 square mile service area located in the lakes region of north-central Minnesota.