The Co-op Difference
At BEMC, we're not a big electric company. We are an electric cooperative which means each and every customer is a member.
Cooperatives were formed when public utilities were busy bringing electric service to customers throughout the country, but were less interested in rural areas which were less populated, and thus promised fewer customers per mile of electric line. The Rural Electrification Act, passed by Congress in the early 1900’s, linked co-ops with their communities in a way that other utilities simply cannot claim.
As a result, BEMC and other cooperatives, feel confident that much of our added value can be attributed to our historically dependable and strong customer focus. BEMC plays a dominant role in each of our communities, and contributes dramatically in the local economies.
Additionally, our employees live and work among those they serve, keeping the local electric cooperative, just that - local.
A Special Value for Co-op Members – Capital Credits
One of the special things about cooperatives is that the co-op is actually owned by its members. With ownership comes responsibility, like adhering to the co-op values of democracy, quality, equity and solidarity. Responsible ownership also means maintaining an adequate level of equity to ensure financial health and stability of the co-op.
The most significant source of equity for co-ops is the retention of margins from the sale of electricity. After expenses for furnishing your electricity are satisfied, the money left over (the margin) is set aside for you in the form of Capital Credits. These Credits are allocated to members based on their purchases from the co-op.
The equity from Capital Credits make it possible for BEMC to secure loans, maintain facilities and services and expand our system to meet the demands of a steadily growing membership. Capital Credits are governed by federal and state laws and regulations, our articles of incorporation and bylaws, mortgage covenants, and policies of our Board of Directors. Other factors that come into play are the need to balance debt and equity to maintain creditworthiness, rate competitiveness and accounting practices.
Capital Credits are returned to BEMC members on a 25-year cycle. In 2009 and again in 2010, we were able to accelerate that cycle. In 2009, the co-op retired $6.1 million in Capital Credits to about 22,000 members that purchased electricity in 1984, 1985 and/or 1986. Again in 2010, nearly $3 million in Capital Credits were made available to members from 1987, 1988 and/or 1989. By using Capital Credits to fund system construction, the amount of money that BEMC had to borrow in those years was reduced. As the plant and equipment age and have to be replaced, margins retained from current members fund repairs and new construction, allowing the return of older capital credits.
The bottom line is that all co-op members eventually receive a payback for their years of investment in their co-op. That puts even more value into your electricity.