Following significant costs due to dead tree removal and a challenging economic environment, Sam Houston Electric Cooperative’s board of directors recently elected not to retire capital credits to members in 2024.
“Dead tree removal is vital for reliability for our consumer-members, but it is costly,” said Doug Turk, general manager and CEO. “Last year, the Co-op removed 26,000 dead or hazardous trees that threatened reliability, which is nearly four times as many as typical due to the drought and other environmental stressors.”
Despite capital credits not being retired, the method of allocating capital credits will not change.
“Capital credits are allocated based on the dollar value of individual electric use. So, the amount of the credit is directly proportionate to the amount of electricity purchased by a Sam Houston EC member,” said Rachel Hawkins, chief communications officer. “Capital credit allocations are set aside into a separate account to be used for system improvements, such as substations, power lines and other electrical system facilities that serve members.”
Even with the significant costs of storm repairs, the Cooperative remains in sound financial condition, said Sonya Reece, chief financial officer.
“Co-op members typically see the annual capital credit retirement on their September bills,” he said. “Because of last year’s costs, however, members’ September 2024 bills will not reflect retired capital credits.”
Sam Houston EC has distributed capital credits consistently throughout its history. The most recent delay of capital credit retirements was in 2021, as a result of tornado expenses and Hurricane Laura expenses that were not reimbursed to the Co-op by FEMA.
“Sam Houston Electric Cooperative has paid out over $52 million in capital credits over the years, including $2.3 million last year,” Reece said.
