Some energy consumers in Northern Colorado may see money back in their pockets this month.
Poudre Valley REA (PVREA) recently announced the retirement of $2 million in member credits.
“Retiring or paying out member credits is a testament to our unwavering commitment to provide affordable energy while adding value to the lives of our members,” said Jeff Wadsworth, PVREA President and CEO.
“Two million dollars can have a big impact in our community, especially for the local businesses, school districts, and hardworking families we serve across Northern Colorado,” Wadsworth said.
As a not-for-profit electric cooperative, PVREA operates at-cost to serve their members, not to satisfy investors or generate profits. Paying out member credits illustrates the cooperative’s not-for-profit business model in action.
Members of PVREA invest in their cooperative each time they pay their monthly electric bill. Annually, PVREA calculates margins after all expenses are paid and allocates the remaining funds to each member based on their electric consumption. This allocation represents a member’s ownership stake in the cooperative.
Each year, the PVREA Board of Directors assesses the financial condition of the co-op and determines what amount of member credits are eligible for retirement, or to be paid out.
This year, the PVREA Board of Directors approved the retirement of $2 million. In September, member credits will be paid out to anyone who received service from PVREA in 1994, 2005, and 2022, or any combination of those years.
“We take great pride in the fact that our members pay, on average, less for electricity than members of any other electric cooperative in Colorado,” said Wadsworth. Returning member credits helps lower the cost of electricity even further for the members of PVREA.
“Our commitment to affordability means we always focus on providing best-in-class service at competitive rates while adding value by routinely returning member credits each year,” Wadsworth concluded. Poudre Valley REA has retired tens of millions of dollars back to the members they serve, paying out over $30 million in the past 10 years alone.
Current PVREA members will receive their member credit retirement as a bill credit on their September billing cycle if under $600 or as a check if over $600. Former PVREA members are mailed a check in September if their member credit retirement is more than $50.
Learn more about member credits online at www.pvrea.coop/member-credits.
How does the member credit process work?
- Poudre Valley REA keeps track of how much electricity members purchase throughout the year.
- At the end of the year, the cooperative completes financial matters and determines whether there are excess margins.
- Members receive a portion of the margins as member credits based on the amount each member contributed throughout the year.
- When PVREA’s financial condition permits, the Board of Directors decides to retire, or pay out, the member credits for previous years.
Why don’t all members receive a credit?
Poudre Valley REA is returning $2 million to those who were members and purchased electricity in 1994, 2005, and 2022, or any combination of those years. Members who had service from the cooperative outside of those years will eventually receive their member credits.
Poudre Valley REA was founded in 1939 by a group of community residents in Northern Colorado. During that time, the for-profit utilities wouldn’t invest the money necessary to bring electricity to rural parts of the state. Residents pooled their money together, which founded the cooperative, and began building power lines and substations.
Years later, the founders of the cooperative received a refund for their investment, called a member credit. This was a return on their investment. This same philosophy still applies to the return of member credits today.
Some PVREA members may not realize they belong to a not-for-profit utility. Every month, members pay their bill and help finance not just the purchase and production of power but also improvements to the electric system that keep the lights on.
The immediate payback for this investment is in the form of increased service, reliability, and affordable rates. The long-term payback for this investment comes years later in the form of a member credit as a billing credit or mailed check from the cooperative.
Each generation of cooperative members contributes, builds equity in the co-op, and is then rewarded with a member credit refund. This system is unique to not-for-profit electric cooperatives. People served by for-profit utilities don’t reap these benefits.
PVREA is a member-owned, not-for-profit electric cooperative serving safe, reliable, efficient energy solutions with exceptional service to nearly 55,000 homes and businesses across Boulder, Larimer, and Weld counties in Northern Colorado. More information is available at www.pvrea.coop.