Manager’s Message — April 2021
As spring approaches, many of us are itching to get outdoors and start working or playing. As these outdoor activities begin, I want to remind all of you to be aware of overhead power lines and where they are in relationship to your activities.
Tree trimming, irrigation pipes, and ladders are of particular concern. If a line appears too close to the area in which you are working, please call us to help evaluate the situation before you start the project.
If you plan any kind of excavation project, Oregon law requires you to contact the Oregon Utility Notification Center at 811 two business days before you dig. The notification center will notify us. We will locate and mark any Wasco Electric-owned underground wires in the area to be excavated.
Capital credits are unique to cooperatives such as Wasco Electric. Private power companies make profits and pay dividends to stockholders. On the other hand, cooperatives work on a not-for-profit basis and allocate their operating income back to their members.
Capital credits represent your share of the cooperative’s operating income—operating revenue remaining after operating expenses. The amount designated in your name each year depends on your energy purchases for the year. To calculate this, we divide your annual energy purchase by the cooperative’s operating income for the year. The more electricity you buy, the more capital credits you earn.
Each member recently received a statement of their 2020 capital credit allocation. The member’s allocation amount is based on the year-end operating margins of $684,844 divided by the total patronage from 2020 sales of $10,899,183. This equates to 6.28% of each member’s 2020 billings allocated back to the member.
Capital credits are not necessarily dollars in a bank account somewhere. Instead, they represent funds that have been invested in the cooperative’s utility plant.
Most months, Wasco Electric receives more cash from operations than is necessary to pay for operating expenses. However, the cooperative needs cash for purposes other than paying for operating expenses. Wasco Electric must service its debt—payments of principal and interest on money the cooperative has borrowed.
Wasco Electric must also use cash to pay for capital expenditures. The amount of cash needed for capital expenditures is largely determined by the growth of a utility and the replacement schedule of its aging system.
The distribution of capital credits and its effect on the cooperative’s financial well-being is an issue your board of directors deals with each year. It is the cooperative’s policy—and at the board’s discretion—to return capital credits as long as the cooperative is financially fit to return them without additional borrowing or the need to raise rates to pay capital credits.
In 2020, Wasco Electric refunded $500,010 in general retirements of the 1990 and 1991 capital credits. The cooperative retired $43,704 in special retirements to the estates of deceased members.