Great River Energy returned $25 million to members in the latest cash payout from the not-for-profit cooperative.
Great River Energy and its member-owners are cooperatives.
The don’t sell energy to customers. They provide electric service to members.
Members get to vote in cooperative elections. Members can run for the board of directors. Members also have a real financial stake in the cooperative.
Great River Energy is not-for-profit organization that operates at cost. The company only collects enough revenue to run the business and meet its financial obligations. When a cooperative enjoys financial success, it returns those dollars to members through patronage capital payments.
Last month, Great River Energy’s board of directors approved the payment of $25 million to member-owners through its 2023 patronage capital return.
“We take our members’ investment seriously,” said Vice President and Chief Financial Officer Michelle Strobel. “We keep a close eye on our budgeting and spending, and we are always happy to return dollars to our membership.”
This is the fifth consecutive year that Great River Energy has issued a patronage capital return to its member-owners.
Capital credits explained
Cooperatives hold on to allocated capital credits to cover emergencies and to make necessary enhancements to their electric systems. It is an important financial mechanism that reduces the need to raise rates or borrow money to pay for infrastructure.
Great River Energy’s board of directors sets a target to maintain an equity to capitalization ratio of 20%. Patronage returns are then made in the form of cash payments from equity levels above the set target.
Returning patronage capital is a component of the cooperative principle known as “members’ economic participation.” Members contribute equitably to, and democratically control, the capital of their cooperative. Cooperatives manage surpluses to achieve their financial goals, including the periodic cash returns.