Homer Electric Association, Inc. (HEA), a member-owned not-for-profit electric cooperative, is retiring $3.34 million in capital credits to its membership.
Members with an active HEA account will receive a credit on their energy bill statement this summer.
Those members who do not have an active account will receive a check by mail to their address on file with HEA.
The capital credits are being distributed to people who were members of HEA during 1987 through 1992.
The amount is determined by the quantity of electricity purchased during each of those years; the more electricity purchased, the greater the capital credits returned will be.
Capital credits reflect each member’s ownership in the utility and is one of the benefits of being a member of an electric cooperative. Capital credits are based on margins, which are the difference between total expenses and total revenues of the cooperative. Each year, HEA allocates margins to its members in proportion to the amount they paid for electric service. As a reminder, it is critical for HEA to have a valid address on file for all active and former members to ensure delivery of future capital credits.
While the allocation is done annually, the return of margins occurs at the discretion of the Board of Directors, based on the financial health of the cooperative. Prior to refunding capital credits, the cooperative uses its margins to maintain equity and fund long-term capital projects to improve and upgrade the electrical system.
General Manager Brad Janorschke stated that he is “proud to oversee a utility with an equity level of 46% and that HEA’s financial stability provides the Board with the option to return this money to the member owners of the utility.” From 2018 through 2022, HEA has returned over $16 million in capital credits, an average of $3.2 million per year, to members of the cooperative.
