DURANGO, Colo. – La Plata Electric Association customers who have maintained an account for at least one year, are scheduled to receive a patronage capital refund during August. The size of the refund will correspond to the amount of money each customer has paid over the years.

The LPEA Board of Directors recently voted to refund $2.3 million in patronage capital (also known as capital credits) to LPEA members. These refunds will be credited to customers’ electricity bill or mailed as checks during the August billing cycle. Since incorporation in 1939, LPEA has refunded more than $27 million, with in excess of 80 percent of this amount returned since 1990.

“LPEA is a not-for-profit corporation with a 501 (c)(12) tax designation,” said Greg Munro, LPEA CEO. “As part of that tax designation, which establishes us as a cooperative, we are required to return capital credits to our members. These refunds are a major point differentiating us from other types of utilities. We give the money back to our members instead of giving it to investors.”

Annually, the electricity payments made by customers above the cost of providing their electric service (which is the margin) is placed into a patronage capital account in each member’s name in proportion to the member’s contribution to those LPEA margins. This capital, along with borrowed funds, can be used to finance improvements such as electrical lines, poles, transformers and substations.

“In other words,” said Munro. “LPEA invests the margins earned by each owner back into our system. It helps build members’ equity and reduces the amount of money LPEA has to borrow – so it reduces interest charges we’d have to otherwise pay. The margins allow LPEA to maintain system reliability at its highest level and help keep rates low.”

According to Munro, patronage capital refunds are the method by which electric cooperatives like LPEA return some of the excess capital to the members. When times are good and certain equity requirements are met, the LPEA Board determines a refund amount. Patronage capital credits accrue in proportion to a member’s electrical usage.

For further information, call 970.247.5786 or visit www.lpea.coop.

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