17,619 checks will be mailed out to San Isabel Electric members on Thursday, September 6, returning $1,006,000 in capital credits to the membership. Checks range from $10 to hundreds of dollars for residents, school districts, businesses, with a few larger businesses and governments receiving several thousand dollars.
Some people who buy electricity from San Isabel Electric may not realize that they are member-owners of San Isabel Electric, not utility customers. Being a member-owner comes with some great perks, like capital credits.
“Capital credits are the major difference between electric cooperatives and other forms of electric utilities. All margins generated through operations are returned to only those served by the cooperative. San Isabel Electric is owned by those we serve and governed by a board of directors that has the members’ best interest in mind because they are members too,” San Isabel Electric General Manager Reg Rudolph said.
San Isabel Electric members have had more than a decade of rate stability, with only one rate change since 2014 because of efficient operating practices.
Most utilities pocket margins as profit when revenues are more than expenses. Electric cooperatives set aside that money for members as capital credit, based on the amount of energy each member purchases. When it’s financially safe to do so, the co-op retires, or returns the money to members. Members receive their share as a check right in their mailbox.
This year, members from 1989, 1990, and 2018 will receive capital credit checks in the mail, reflecting their ownership of the cooperative during those years.
In the last five years, San Isabel Electric has returned more than $4.7 million in capital credits to schools, businesses, and residents.
What are capital credits?
Unlike investor-owned utilities, electric cooperatives operate at cost, making just enough money to run and expand the business. Money paid to the co-op by members is used to cover expenses to keep the electricity flowing – expenses like poles, wires trucks and staff. Co-ops save a portion of the money paid by members to cover emergency expenses and to build and maintain a reliable electric delivery system.
At the end of each calendar year, operating expenses are subtracted from the total amount of money collected during the year. Any remaining revenue is allocated to members. The co-op does not immediately distribute the full amount of allocated capital credits to keep rates low and to plan for unforeseen changes that could affect rates or the strength of the company. When it’s safe to do so, San Isabel Electric’s board retires a portion of the retained capital credits and refunds the money to member-owners. Every year, allocation statements are sent out letting members know the dollar amount of their share of what the co-op saved.
In 2018, San Isabel Electric celebrated its 80th year of keeping the lights on in southern Colorado. San Isabel Electric was founded in 1938 by a small group of rural neighbors in Beulah, Colorado after investor-owned utilities declined to service the then-rural area due to the high costs and low margins involved because of the small number of meters per mile.
Since its inception, the cooperative has been governed and operated by its members, the people who use the power the cooperative provides. A board of directors elected by members at an annual meeting makes all decisions on rates, company policies, and power plans for the future. Currently, San Isabel Electric serves more than 24,000 member accounts in portions of seven counties, including Custer, Costilla, Fremont, Huerfano, Las Animas, Otero, and Pueblo counties.
As a not-for-profit cooperative utility, San Isabel Electric provides affordable, reliable electricity with exceptional service to communities throughout southern Colorado. Serving nearly 20,000 member-owners and 24,000 meters, San Isabel Electric has been keeping the lights on since 1938. We don’t just serve communities. We are part of communities.