Corporate earnings for 2021 are showing all-time high profits for American companies, on average. Those funds might be used by companies to buy back shares, pay higher dividends and build their balance sheets.
At a cooperative like Great River Energy, those dollars are given back to the membership.
Due to strong sales and cost containment, Great River Energy recorded very strong margins in 2021. At the same time, inflationary pressures related to the production and delivery of electricity caused unexpected costs for Great River Energy and its member-owner cooperatives.
“As soon as those trends emerged, we worked with our members to put our strong earnings to work addressing unforeseen costs,” said Great River Energy President and Chief Executive Officer David Saggau.
Beginning in May of 2021, Great River Energy issued monthly bill credits that totaled $24.5 million through November. Continued strong performance resulted in an additional $32.5 million refund on the December member-owner power bills.
“Cooperatives are owned by the people they serve, and we are thrilled to share Great River Energy’s success with our member-owners,” Saggau said.
Great River Energy will continue to meet all its financial goals and obligations after issuing $57 million in bill credits.
“The board was the ability to quickly take action to address a need or pursue an opportunity in the best interest of the membership,” said Great River Energy Vice President and Chief Financial Officer Michelle Strobel. “They recognized early in 2021 that they could put strong margins to use to provide immediate financial relief to the member-owners.”
In addition to bill credits, Great River Energy announced its average wholesale electric rates will decline slightly into 2022 and remain stable for many years to come.
Cash payments and stable rate projections will be important as Great River Energy and its member-owners continue facing cost increases due to supply chain issues and other financial pressures.
Cooperatives also return capital credits to members, similar to how a publicly held company returns dividends. Great River Energy’s member-owner cooperatives spent years investing in the financial strength of Great River Energy by gradually increasing equity over time, with the goal of returning patronage capital to members.
Great River Energy issued $25 million in patronage capital credits to members in 2021 and projects to return a similar amount this spring.