A message from General Manager, Jerry Williams
Once again the Lamar Electric Board of Directors have approved the mailing of Capital Credit checks to the members. Within the next few weeks, members that were receiving electric service from 2001 through 2017 will be receiving checks. In 2016 checks were mailed for those current members that received electric service between 1970 and 1975. This time former as well as current members will receive checks. You may recall that in 2006, another general retirement of capital credits was made for everyone who received electric service from 1965 through 1969. This retirement of capital credits will include commercial accounts as well as residential. The average check will be approximately $140. Accounts, like some commercial ones, that use more than the average amount of electricity each month will receive more and those with minimal usage will receive less. You may be asking yourself what are Capital Credits. The short answer is this is your equity in Lamar Electric. When rural electric cooperatives were formed, REA included a provision in all mortgage documents that required all cooperatives to maintain electric rates that would provide enough money to pay the bills, including mortgage payments, plus a little bit more. Since we are non-profit, this “little bit more” is called a “Margin.” All of these margins prior to 1970 have already been returned. This Margin is ultimately paid back to the members in proportion to the amount of money they paid in during the year, but the money is immediately used to pay for electric line extensions, upgrades and improvements to the electric system. We call these projects, Capital Projects. We keep detailed records of exactly how much Margin is allocated (recorded on membership records) back to each account, by year. This is why we call the Margin allocated to each member, their Capital Credits. Lamar Electric is a member of several other non-profit cooperatives that also have margins. These non-profit cooperatives include our liability, automobile and building insurance; our computers and computer systems; and even our mortgage bank. Recently, we were able to switch wholesale power suppliers and included retirement of the 2001 thru 2017 Capital Credits we had in that cooperative, to our members. Since the Capital Credits from our prior wholesale power supply cooperative were previously allocated to our members, we are now able to pay those Capital Credits to our members. Rather than wait for those Capital Credits to be paid to us 20+ years from now, we accepted an amount based on the net present value. This allows us to get the money to each member now and allow you to use it or collect your own interest on it for the next 20+ years. This is another good reason why it makes “cents” to do business with a Non-Profit Cooperative that you own, and another way Lamar Electric is striving to help our members in the rural areas we serve.