Every time you pay your utility bill to Edgecombe-Martin County EMC, you invest in your Cooperative and provide capital to help carry out essential system improvements. Because Edgecombe Martin EMC is a not-for-profit organization, we return margins, also called capital credits, to the membership. The retirement of capital credits is one of the many benefits of being a cooperative member-owner.
Those equity investments, also called patronage, ensure we continue to provide safe, reliable, and affordable electric service to our members. Patronage is members' share of what's left over after we have paid the costs of delivering power and set aside appropriate funds for general operations and emergency preparedness.
Every business needs a source of funding or capital to operate efficiently. Our most significant source of capital is the sale and distribution of electricity to you, our members. If a for-profit business is profitable, it may pay dividends to those who hold stock in the company, and a for-profit's main initiative is to increase shareholder wealth. Unlike for-profit companies, our member-owners are entitled to receive capital credits equitably based on their electric consumption. Increasing shareholder wealth is not a part of our business model. As a not-for-profit, we treat our year-end equity differently than a for-profit business. To maintain our tax status, we must allocate margins annually to all member accounts based on their energy consumption.
We then use the capital to fund general operations, improvements in service, and technology upgrades. Member-provided capital helps keep rates affordable by reducing the funds we must borrow to finance, repair, and improve the systems of the Cooperative.
When we are financially able to do so, a general retirement is approved by the board of directors to distribute patronage capital back to the members on a reasonable and systematic basis. Management and the board of directors evaluate the Cooperative's financial stability and verify that we comply with applicable federal regulations before the board of directors approves a plan to retire capital credits. The general retirement ensures each member-owner shares in the successful operation of the Cooperative and receives a "return on their investment".
Historically, we have retired patronage capital using a hybrid method so that our long-term members consistently receive a portion of the capital they invested many years ago while returning a small portion of newer members' investment. The hybrid approach reduces the total unretired patronage and will make retiring larger patronage allocations from future years more manageable.
We are happy to announce that Edgecombe-Martin County EMC's board of directors authorized the general retirement of just over $800,000 in capital credits to the members of the Cooperative at their January meeting. This general retirement clears the remaining patronage capital from 2000 and retires 1% of the allocated patronage capital from 2001 through 2022.
Beginning the second week in March 2024, checks and bill credits will be distributed to eligible members based upon the board-approved general retirement specified above. To streamline the process, we will issue checks for amounts over $25 and bill credits for amounts under $25. Should your retirement be below $25.00, you should see a credit on your bill if you're an eligible current member.
Edgecombe Martin County EMC has always placed a high priority on the retirement of capital credits. Ensuring we have your up-to-date mailing address is critical in getting these funds to you. Unfortunately, many checks are returned by the U.S. Post Office due to inaccurate mailing addresses. Therefore, please inform us of any change to your mailing address, telephone number, or email address. We also publish a report annually on our website to identify and address any "unclaimed" capital credit retirement checks.
For further details regarding capital credits or to update your mailing address, please contact us at (252)823-2171.