Prince Frederick, Maryland - In a demonstration of their commitment to cooperative principles, Southern Maryland Electric Cooperative (SMECO) has announced that they will refund their members' capital credits, totaling nearly $5.6 million. The refunds will be distributed in two parts, with a general refund of approximately $3 million scheduled for July and special refunds of about $2.6 million to be paid throughout the year, specifically to include estates of deceased members.
"Passing on savings to members is a basic co-op principle, and we are happy to issue capital credit refunds to SMECO members when our financial obligations have been met," stated Sonja M. Cox, SMECO president and CEO. Cox emphasized the unique business model of cooperatives, explaining that they are not-for-profit companies owned by the customers who receive electricity - the members themselves. She further highlighted SMECO members' vital role in the cooperative, stating, "Every time SMECO members pay their electric bills, they are investing in the cooperative, and we use that investment to improve reliability and service."
SMECO's margins for 2022 amounted to an impressive $12.7 million. These margins, defined as revenue minus expenses, serve as working capital for new construction, system improvements, and facility upgrades. Cox elucidated the connection between the financial contributions of SMECO members and the subsequent benefits they enjoy, stating, "Our members help to finance SMECO's operations, and they realize one of the benefits of being a co-op member when they receive a refund." Importantly, SMECO's margins are not influenced by the cost of energy, as the cooperative does not make any profit from energy costs, ensuring that energy rates have no impact on SMECO's margins.
After each year, SMECO's margins are allocated to a special account for each member based on their electricity consumption and billing rate. The Board of Directors of SMECO regularly assesses the cooperative's financial condition and determines when it is appropriate to refund the capital credits to the members. The refund process will begin on July 10 when eligible active members see a credit applied to their bills, while eligible former members will receive refund checks starting July 17.
All eligible active members will apply the credit to their primary account. Members who wish to designate a different primary account are encouraged to contact SMECO at 1-888-440-3311. In the case of eligible former members, if the balance in their capital credit account is $100 or less, they will receive a full refund. It is important for SMECO members who move out of the cooperative's service area to update their mailing address with SMECO to ensure they receive refund checks in the future.
This capital credit refund initiative shows SMECO's commitment to its members. By adhering to the principles of cooperation and reinvesting in the cooperative's infrastructure, SMECO strives to provide reliable service while benefiting its members. As the refunds are disbursed, the cooperative and its members continue strengthening their mutually beneficial relationship.
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