Kaua‘i Island Utility Cooperative (KIUC) will begin issuing $3.2 million in 2017 patronage capital retirement checks to cooperative members next week.
“We had excellent financial results in 2017, which allows us to exercise one of the fundamental benefits of being a not-for-profit cooperative that is owned by the members it serves,” stated Allan Smith, Chairman of the KIUC Board of Directors.
Patronage capital is money that the cooperative has left over after paying all of its expenses and meeting its lenders’ expectations for financial stability. At the end of the year, money is credited to each member’s patronage capital account according to the amount the member paid for electricity. This is the member’s equity in KIUC.
“A rural electric cooperative exists solely to provide its members with electricity,” Smith explained. “In a co-op, margins don’t belong to the company; they belong to the individual members who paid money on their monthly bills.”
As additional member equity funds come in year after year, KIUC is able to return some of its accrued capital credits by issuing patronage capital retirements to members. KIUC’s elected Board of Directors and the bylaws determine how and when capital credits are returned to members. At its meeting on April 24, 2018, the Board approved the $3.2 million disbursement.
The amount of each individual member’s retirement is based on energy usage. This year, the average amount to be returned is about $44, based on usage of roughly 500 kWh per month.
Members with active accounts with a refund of $25 or more will receive a check. If the amount is less than $25, their electric account will be credited. Members with inactive accounts with a refund amount of $10 or more will receive a check. If the amount is less than $10, it will remain in the member’s patronage account until the cumulative amount reaches $10 or more, after which a check will be sent.
Since becoming a cooperative in 2002, KIUC has built $111 million in equity and has returned $37.3 million to its members, including $29.5 million in patronagecapital.
A list of frequently asked questions (FAQs) is attached, and will be sent to members along with their patronage capital retirement checks.
