Membership Equity is Your Share of Trico
November 2, 2023
Member economic participation is vital to a cooperative. I am excited to announce that for the 14th straight year, the Trico Board of Directors has approved the retirement of Membership Equity – formerly Capital Credits – in the amount of $5.4 million. That’s money that stays here in our local communities.
You may be wondering why we changed the name of this Member benefit program. We feel Membership Equity better describes how our Members share in the financial success of our cooperative.
Membership Equity is your share of Trico. Trico is not-for-profit – which means we need to raise money to operate, but we don’t seek to make extra revenue to satisfy shareholders. When there’s money left after all the co-op’s bills are paid, it’s returned to Members.
In general, here’s how Membership Equity (ME) works:
When Trico’s revenues exceed its cost of operations, a profit (margin) is created, and these amounts are allocated to Members’ ME accounts. These credits accrue in the Members’ accounts until the Board approves what is called a “retirement.” That’s when Members who bought electricity from Trico during a certain year will receive a distribution based on the credit applied to the Member’s account, the amount retired by the Board, and the amount of power the Member used. This distribution may be in the form of a bill credit or a check.
Co-ops perform a balancing act – they have to retain enough money to operate and be prepared for emergencies, like storm damage – but they also want to give Members their share of the margins. That’s the basis of a cooperative; it’s owned by the people who use its service or buy its product, so they share in the “margins” – the co-op equivalent of “profits.”
We often get asked why Members can’t receive all the Membership Equity they have accrued. The Membership Equity of all Trico Members builds up over time and is used to fund the maintenance and improvement of Trico’s system. To maintain fairness, Members need to contribute equitably to the continued operation of the co-op. If Members were able to withdraw all of their allocated ME, there would not be funds to maintain and improve the system. By retiring allocated ME on a proportionate and regular cycle, we balance the need to fund the co-op with returning ME to Members.
ME cannot be returned to Members all at once because doing so would negatively impact the Co-op’s finances and cause increases in electric rates. ME funds are used to keep the electric system safe and reliable and keep electric rates as affordable as possible. When Trico’s finances permit, ME is returned to the Members who paid the rates that created the ME.
Members will see their Membership Equity Retirement on their December bill. Active accounts will see a Membership Equity Retirement posted as a credit on their bill. If you would prefer to receive your Membership Equity as a check, contact us at firstname.lastname@example.org or 520-744-2944. To receive a check, your refund must be over $10 for both active and inactive accounts. If a Member moves or no longer has service, Trico must have their current address to send ME notices and retirements in the future.
Thank you for being a valued Member of Trico Electric Cooperative. Membership Equity is one of the many benefits of being a Member of a co-op, and it represents your share of the co-op’s profits. Visit here for more information on Membership Equity.