Southern Maryland Electric Cooperative (SMECO) is issuing capital credit refunds totaling nearly $3.8 million. Of that total, a general refund of approximately $2.2 million will be issued in early July. Active eligible customer-members will receive credits on their bills and checks will be issued to eligible former members. Special refunds of about $1.6 million will be paid throughout the year to estates of deceased members and unpaid final bills.
“When SMECO refunds capital credits to customer-members, we’re putting our words into action and making good on a promise,” said Austin J Slater, Jr., SMECO president and CEO. He added, “Our customers realize the benefit of being electric cooperative members when they receive a portion of the co-op’s margins. Passing savings on to customers demonstrates the value of the cooperative business model, and that differentiates us from other utilities.”
SMECO’s margins for 2016 totaled $12 million. Because SMECO is a cooperative, margins—revenue minus expenses—are retained to provide working capital for new construction and system improvements. Slater explained, “SMECO’s customer-members invest in their co-op every time they pay their bill. They share the responsibility of ownership by financing the cooperative’s operations, but they also share its rewards.”
SMECO’s margins are allocated to customers’ capital credit accounts at the end of each year. Margins are refunded to customer-members in the form of capital credits when SMECO’s Board of Directors determines that the co-op’s financial conditions can be met.
Each member’s share of the co-op’s margins is based on how much electricity the member purchased and the rate at which the account was billed. All eligible active customer-members will receive a credit on the bill for their primary account. If customers wish to contact SMECO to designate their primary account, they may call 1-888-440-3311. Inactive eligible members will receive a full refund of the balance in their capital credit account if the balance is $100 or less. Capital credits may also be used to pay any amount due if a customer had an unpaid final bill for electric service.