On December 11, 2020, Fall River Electric Cooperative mailed cashback checks to more than 6,200 of its owner-members (customers) totaling just over $1 million dollars as part of its patronage capital program. Because Fall River Electric operates as a nonprofit cooperative, it is in fact owned by the customers it serves which the co-op refers to as owner-members. When revenues collected by the co-op exceed operating costs, those extra revenues become patronage capital, which is then disbursed to its owner-members on an approximate twenty-year cycle. This retirement cycle helps the Cooperative achieve its ideal equity level which also helps the co-op obtain loans at lower interest rates which helps to keep electric rates to members lower.
Unlike investor-owned utilities that pay profits to stockholders, Fall River Electric’s patronage capital is a customer’s investment in the Cooperative and is used in building new or maintaining existing infrastructure, including generation facilities, poles, wire, transformers, and substations. These cash back payments will be especially beneficial to members who have been impacted by this year’s pandemic and can be likened to an infusion of capital into our area’s economy just in advance of the holidays.
The amount of cashback that a member receives is based on how much electricity they purchased during the years being retired. This year, members are receiving patronage capital earned in 1999 and a portion of 2000.
According to Fall River Electric’s CEO/General Manager Bryan Case, “Cashback payments made to our customers are a unique and tremendous benefit of being a member of our Cooperative. It is made possible with the approval of our elected Board of Directors. They analyze the financial health of our Cooperative and only pay out patronage capital when it is in the best interest of our entire membership.” Case added, “Fortunately our staff and management continue to do an outstanding job of managing our financial and physical resources, so our equity has dramatically improved in recent years, now at 45 percent, which is a significant contributing factor to the board’s ability to retire patronage capital to our owner-members.”
To learn more about Fall River Electric’s patronage capital program, visit the topic Patronage Capital on the Quick Links here on our website homepage.