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NFEC MANAGER’S MESSAGE


SCOTT COPELAND GENERAL MANAGER


Capital Credits You may have noticed in the last several issues of the Sparks &


Flashes, that we have published long lists of names. The names on the lists are those of Northfork Electric Cooperative member- owners, both past and present. The purpose of publishing them is to update our records so that we can contact each of them or their descendants in regards to their capital credit allocations with the Cooperative. “What are capital credits?” you may be asking. One of the


seven principles that cooperatives are founded on is ‘Members’ Economic Participation’. Unlike an investor-owned electric utility whose profits are distributed back to shareholders or investors in the company, a cooperative is obligated to allocate all amounts received in excess of operating costs and expenses from the sale of electricity to a capital account for each patron. These allocations are accounted for each year and are used as operating capital for the Cooperative until they are retired, or paid to the members. Each year, the board of trustees reviews the financial condition of the Cooperative to see if it will allow a portion of the capital credits to be retired. Any such retirement also requires approval by our primary mortgage holder, the Rural Utility Services, a division of the U.S. Department of Agriculture. After the approval process is completed, the capital credits are paid by checks distributed to the members identified for those particular years. Because Northfork has been in a long period of significant


growth requiring use of these amounts to be invested back into the system, there have been no retirements of capital credits in recent years. Last year, however, the board of trustees directed


Page 4 Northfork Electric Cooperative, Inc.


our management team to develop a plan to resume retirement of capital credits in future years. Some of these credits are from as early as 1963. The plan presented by staff and approved by the board, calls for budgeting an amount annually to begin a systematic retirement of these credits. While the approval to retire capital credits must still be made by the Board each year to assure that the financial condition of the Cooperative will not be impaired, it is hoped that the retirement of capital credits can be reduced to a 30-year rotation cycle over a reasonable amount of time. Later this year, the Board will consider the possibility of the


first retirement of capital credits under this newly adopted policy. Your help by reviewing the lists of names published in the Sparks & Flashes will help the retirement process go as smoothly as possible. It’s just one of the great advantages of being a member- owner of your electric cooperative. I encourage you to come and hear more about capital credits,


our new headquarters, and many other projects at the 76th Annual Meeting of the Membership of Northfork Electric Cooperative. This year’s meeting will be held on Saturday, August 15, at 9:00 a.m. in the Sayre Municipal Park. In addition to our business meeting, there will be guest speakers, drawings for cash and prizes, entertainment by Roy Lee Scott – The Flying Cowboy, and a fine barbeque lunch catered by our friends from Dyer’s Barbeque in Pampa, TX. You won’t want to miss your chance to win this year’s Grand Prize, a Bad Boy 60” Zero-Turn mower from Wootton New Holland. Mark your calendars and we will see you there!


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