Adams Electric returns $2 million in Ownership Rewards
This month the board of directors for Adams Electric Cooperative is returning $2 million in Ownership Rewards to 32,500 current and former members, raising the total amount given back to members to almost $41 million for all retirement years.
Ownership Rewards, also known as patronage capital credits, is a benefit of being an owner of an electric cooperative. For more than 50 of the co-op’s 75 years, members have received a return or “reward” on their investment in Adams Electric based upon their “patronage” or use of electricity the co-op delivers.
“This round of Ownership Rewards is evidence the cooperative is doing well financially,” says CEO/general manager Steve Rasmussen. “We are pleased that the co-op business model allows members to participate equitably in this reward for their use of electricity.”
The money being retired represents a loan of capital to the cooperative for routine operations and expansion, with the understanding that the “loan” will be paid back to members in subsequent years as Ownership Rewards. Each member is allocated margins (the difference between the co-op’s revenues and expenses) based upon his or her use of electricity. This allocation continues to grow each year as the member purchases electricity from the cooperative. The Adams board votes annually to “retire” a portion of that allocation as Ownership Rewards.
Members who move off co-op lines are encouraged to keep Adams Electric abreast of their mailing address, in order to continue receiving future ownership rewards. Likewise, those responsible for the estate of a deceased member need to file the proper paperwork in order to close out that member’s account.
Rewards which go unclaimed are held for three years then used to fund college scholarships and member assistance programs.