PEC begins return of $4.7 million to members
Co-op officials this month began the first of five planned distributions of $4.7 million in capital credit to its more than 220,000 members. The payment will be reflected on bills as a deficit — hence the minus sign.
Capital credits are calculated when PEC revenues exceed expenditures during the calendar year. The leftover money is either reinvested into the co-op’s infrastructure or returned to members periodically.
PEC spokeswoman Anne Harvey said this year’s credit distribution is part of last year’s civil-suit settlement approved by state District Judge John K. Dietz in 250th District Court.
“This is the first of it,” Harvey told The Daily Tribune. “Plans for future distributions have not yet been finalized.”
In that settlement, which is currently under appeal, the co-op was ordered to return $23 million in capital credit to its members over five years, after the plaintiffs claimed the co-op was holding more than $226 million in overages from the last 40 years.
The suit — which called for the ouster of the co-op’s board of directors and the return of all $226 million in excess revenues — was settled after several months of discovery.
Though the settlement is currently under appeal, Harvey said the co-op is going ahead with the refund plan.
“The board agreed to distribute the first $4.6 million in capital credits to eligible members as credits on their bills,” Harvey said.
Because of the pending settlement, Harvey said the co-op is currently in the midst of two separate capital redistribution schemes.
Last fall, the co-op returned more than $7 million in credits to co-op members who had joined PEC before 1977.
“We have a 30-year rotation distribution plan,” Harvey said. During that distribution, members received the credits in the form of checks in the mail, though that plan didn’t come without a few hiccups.
Some members, like Marble Falls resident Betty O’Connor, received seven checks from the co-op for amounts as small as 9 cents.
O’Connor, who has been a PEC member since 1968, told The Daily Tribune earlier the different checks corresponded to multiple accounts she and her husband operated as business owners in the 1960s. Even so, all seven checks totaled less than $11.
“That’s not even enough to get my nails done,” she said.
That distribution wrapped up earlier this year, and Harvey said this month’s settlement-related distribution should go smoother, with all eligible PEC members getting their share of the settlement as a credit on their monthly bill.
“Members whose accounts have a capital credit balance and who will receive a bill for electric use during October 2008 are eligible for capital credits disbursements,” she said.
The co-op last month allocated more than $19 million of capital credits to its members, storing the money in individual member accounts for later distribution.
Harvey said each member’s refund is based on capital-credit account balance, divided by the number of days of use on the account for the month of September.
“The biggest questions I get about the distribution are, ‘How big is my refund, and when will I get it?’” Harvey said. “The members will get it when they normally get their bill, and it will show up as a credit on their bill, so they’ll see a negative sign.”
According to information released by the co-op, PEC’s members’ prior capital-credit distribution plan has been suspended pending the settlement distribution plan.
For more information on the distribution, or to find out your capital credit account balance, call (888) 554-4732.
chris@thepicayune.com