Following two significant storm-related financial challenges in 2020, Sam Houston Electric Cooperative’s board of directors recently elected not to retire capital credits to members in 2021.
“The Cooperative experienced two significant weather events in 2020,” said Doug Turk, general manager and CEO. “The April tornado that decimated the area from Onalaska to Seven Oaks caused $6 million in damages to Cooperative facilities. Then in August, preparations for and response to Hurricane Laura cost the Cooperative another $4.5 million.”
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 Keith Stapleton, chief communications officer. “Capital credits 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.”
Despite the significant costs of storm repairs, the Cooperative remains in sound financial condition, said Joe Conner, chief financial officer. “Co-op members typically see the annual capital credit retirement on their September bills,” he said. “Because of last year’s storm costs, however, members’ 2021 bills will not reflect retired capital credits.”
Sam Houston EC has distributed capital credits consistently throughout its history. The most recent delay of capital credits retirements was in 2013, when the removal of dead trees following a severe drought inflicted serious costs on the Co-op.
“Sam Houston Electric Cooperative has paid out over $52 million in capital credits over the years, including $2.8 million last year,” Conner said.
