Before the 2019 Christmas holiday, Fall River Electric Cooperative mailed checks to nearly 6,500 of its owner-members (customers) totaling $1,013,000 under 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. The retirement cycle helps the Cooperative achieve its ideal equity level which allows the Co-op to obtain lower interest loans used for large capital projects.
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. The amount of cash back 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 1998 and a portion of 1999.
According to Fall River Electric’s CEO/General Manager Bryan Case, “Cash back payments made to our customers are a unique and tremendous benefit to 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, 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, click the QUICK LINK titled Patronage Capital on our homepage.