Power of Community - Pedernales Electric Cooperative

Capital Credits: Your Ownership

Because PEC is a cooperative owned by its members, it doesn’t earn profits. However, when revenues exceed expenses, the cooperative does earn margins. Each year, those margins are allocated to members in the form of capital credits, which reflect member ownership in PEC, and the cooperative uses members' capital to fund operating activities and reduce borrowing, with the intent of later repaying that capital back to members.

After reviewing the cooperative’s finances each year, the PEC Board of Directors determines whether a portion of capital credits can be retired, or returned, to members. The Board also evaluates the method, basis, priority and timing of all capital credits retirements. Because capital credits are based on the dollar amount of electricity a member purchases, the retirement amount will vary from member to member and from year to year.

2016 Capital Credits Distribution Information

In October, the PEC Board of Directors approved a capital credits distribution of nearly $8.9 million to current and former PEC members. This year’s distribution, outlined below, is in accordance with the cooperative’s Capital Credits Policy:

  • Members who accumulated capital credits in 2015 will receive 64 percent of their allocation, discounted to approximately 17.5 percent, which represents the net present value of their credits. This distribution will total approximately $4.3 million.

    Members may opt out of their discounted 2015 capital credits if they prefer to receive non-discounted credits in a future distribution, which PEC predicts to be on a 30-year cycle.

  • Members who accumulated capital credits in 1985 and 1986 will receive 100 percent and 55 percent, respectively, of the non-discounted credits allocated from those years. This will total approximately $4.3 million.
  • The estates of deceased members received an estimated total distribution of $300,000.

Current members are scheduled to receive distributions as credits on their December bills. Members with multiple accounts will receive credits for all of them on a single account’s bill.

Former members with capital credit distributions totaling more than $10 will receive a check. A check may be issued for any distribution under $10 by request or when accumulated unpaid distributions exceed $10. Former members are encouraged to contact PEC to ensure their current address is on file.

2016 Capital Credits Frequently Asked Questions »
Read more in Energy News »

The cooperative's capital credits policy serves as a guide for capital credits allocations and retirements. If you have questions about the capital credits allocated to your account, you can email us at capitalcredits@peci.com anytime or call our capital credits line at 1-800-230-2207 between 8 a.m. and 5 p.m.

Please remember to include your name, account number and the best phone number to reach you, and one of our member services agents will contact you after researching your account.

Resources


Capital Credits Policy

Read the policy governing capital credits allocations and distributions

Download Capital Credits FAQs

2016 Capital Credits Frequently Asked Questions

Check out the most frequently asked capital credits questions.