Capital Credits

Patronage capital is the amount of revenue received in excess of the cost of supplying electric service. As the cooperative is a not-for-profit organization, each year that excess capital is allocated back to members based upon their electric usage. Every year you’ve been a member of the cooperative, money has been allocated in your name, for payment that year or at a later date, depending on the co-op’s current cash flow.

2006

Patronage Capital from 2005 expressed as a percentage of total revenue is .086105922. To determine amount of patronage capital allocated to you, multiply the amount you paid for electricity (less taxes) in 2005by .086105922.

The Board has determined to pay capital credits this year for 100% of the capital retired in 1989 and 20% of 2005 for a total payment of $1, 099178.00.

2005

Patronage Capital from 2004 expressed as a percentage of total revenue is .048543005. To determine amount of patronage capital allocated to you, multiply the amount you paid for electricity (less taxes) in 2004 by .048543005.

The Board has determined not to pay out capital credits for the year of 2004 due to cash flow.

2004

Patronage capital from 2003, expressed as a percentage of total revenue, is .082467470. To determine the amount of patronage capital allocated to you, multiply the amount you paid for electricity (less taxes) in 2003 by .082467470.

The board has determined to pay out a total of $799,368 in capital credits in 2004. The payout will be 10% of 2003’s allocation, 20% of 1989’s allocation and 50% of 1988’s allocation. Checks were mailed in December.

2003

Patronage capital from 2002, expressed as a percentage of total revenue, is .06806832. To determine the amount of patronage capital allocated to you, multiply the amount you paid for electricity (less taxes) in 2002 by .06806832.

The board has determined to pay out a total of $583,116 in capital credits in 2003. The payout will be 10% of 2002’s allocation, and 50% of 1988’s allocation. Checks were mailed in December 2003.

2002

Patronage capital from 2001, expressed as a percentage of total revenue, is .07579808. To determine the amount of patronage capital allocated to you, multiply the amount you paid for electricity (less taxes) in 2001 by .07579808.

This year, the Board of Directors has decided to pay out a portion of the outstanding patronage capital. Checks were mailed out in December 2002 and covered 100% of the capital retired in 1987 and 10% of 2001, for a total payment of $738,980.

2001

Thanks to continuous right-of-way clearing as well as a comprehensive system maintenance and pole replacement program, outages have been kept to a minimum this year. In addition, we continue to improve power quality and support the growth of the system with investment in projects such as the Fordland Substation.

All of these things, however, come at a cost. Because of our low rates, nominal debt level, constant investment in our system, and planning for future improvements, our cash reserves currently do not permit capital credits to be paid out this year. In the last ten years, $4,156,954 in capital credits were paid out to our members. This year alone, we have allocated $1,490,252 for capital credits to be paid out at a later date.

2000

Over the past six years Webster Electric has retired almost $4 million in patronage capital. Our strong financial position has allowed us to do this while financing new construction out of general funds. During this same six-year period we reduced our indebtedness by $1.6 million, and added $8 million to our utility plant.

While it’s obvious that Webster Electric is enjoying tremendous success, it comes at a price. The expenditures mentioned above amount to $13.6 million, while margins for that same period were only $10 million. This has resulted in a decrease in cash reserves of $3.6 million.

This same six-year period brought an increase of 26% in membership. To meet the increased demand for electricity, Sho-Me Power is constructing the Fordland substation. To take power out of this new substation will cost Webster Electric over $1 million in 2000.

The net result is that we are out of cash. We have been approved for loan funds through the Federal Financing Bank to finance new construction and the AMR system. However, because of our cash position, the Board of Directors decided against retiring patronage in 2000.

Herbert Luttrull, recent Past President of Webster Electric put it this way, "when it came right down to it, it was an easy decision. We have to build the Fordland Substation, we have to build new services, and we need to prepare for the future with AMR. It just doesn’t make sense to borrow money to retire patronage."