Hundreds of thousands of Lee County Electric Cooperative customers will soon receive a credit on their bill or a check in the mail thanks to authorized equity returns.
Earlier in the year, the LCEC Board of Trustees approved an equity distribution of $6.1 million to current and inactive clients, with an additional distribution of $6.1 million to accounts that have been closed since 2006. Returns totaling less than $250 will be credits; those over will come as checks.
"Because LCEC is a cooperative - we're not-for-profit - we don't make profit," Karen Ryan, spokeswoman for LCEC, said. "But, we do make net margins."
Each year, the board reviews LCEC's financial position to determine if a portion of the net margin can be distributed. The net margin is what remains once the operating expenses are paid for the year.
"Because we have done such a good job in making sure that we keep costs low and run the business efficiently, we have the ability to return equity to our customers," she said.
Through their monthly payments, clients provide a portion of the capital necessary for LCEC to operate. Equity is the value of the investment that they make in LCEC. Without it, LCEC would have to borrow additional funds from outside sources to provide its service, meaning higher base rates.
Checks and credits for current customers and accounts retired after 2006 will go out this week, according to Ryan. The biggest check totals about $154,882, while the smallest return is $1.
"Those are large commercial customers," she said. "That's why those checks are that much."
A total of 242,705 current and inactive clients will receive a check or a credit.
Ryan noted that just over 1,000 customers will see a check, meaning their return is more than $250.
"It's a small number of people," she said. "It would be someone whose account was closed."
Last month, checks were sent out for accounts closed before 2006 - 11,290 in total.
"If a customer moved away and did not give us their current address, we will try to find them," Ryan said, adding that clients who relocate should make sure to update their address with LCEC.
LCEC has been distributing equity returns to customers since 1986, except for a couple of years.
"It is allocated every year," she said. "It may not be that there are returns every year. It depends on the financial situation of the organization."
According to Ryan, LCEC has returned more than $220 million to its clients over the years, placing it with the best of the 800 electric cooperatives in the United States.
"Only about half of them are able to return equity to their members," she said of the other electric cooperatives. "This is just one of the benefits of belonging to a financially strong cooperative."
Customers who do not see a credit on their next statement, nor receive a check in the mail by next week, can contact the Lee County Electric Cooperative at 239-656-2300 with any questions.
For more information about equity, visit online at: www.lcec.net/my-home/equity.