Golden Valley Electric Association customers will get refunds this month, either in the form of a check in the mail or a credit on their bills.
Golden Valley President and CEO Cory Borgeson says this year’s payback will total $9.3 million – the most ever.
“It’s an historic amount,” he said in an interview Friday.
Golden Valley’s board of directors approved the so-called capital-credit refunds during its Oct. 22 meeting. The nonprofit electrical co-op has for years periodically paid the refunds to its members out of margins left over after expenses from, usually, 25 years ago. And Borgeson says this year, like last, GVEA also will retire some of last year’s capital credits.
“This year, the board authorized returning capital credits that were earned in 1993,” he said, “and 25 percent of the capital credits that were earned last year, in 2017.”
Borgeson says Golden Valley uses the members’ margins from years ago to help pay for projects and maintenance to keep the utility’s system as reliable as possible.
“The money that keep -- and we keep it for 25 years – allows to have kind of equity on a borrowed basis so that we can invest in more reliability, more poles, do expansion, make sure trees are trimmed from the lines,” he said.
Borgeson says this year’s relatively big refunds are due to Golden Valley’s healthy fiscal condition. A GVEA news release issued Friday says the board authorized the early partial payback of the 2017 capital credits because of what it called “significant operating margins totaling $20.1 million.
“Golden Valley’s been able to create reserves that are significant enough that we feel that we can make extra gains at giving back capital credits,” he said. “We’ve been able to get our equity up to 30 percent, so our balance sheet looks healthy.”
The news release says any revenue left over at the end of each year, after expenses, is allocated back to members based on the amount of power that customer purchased that year. So bigger customers will get bigger refunds. The release says customers who are due refunds less than $100 will get a credit on their November electric bills.
More information about the capital credit refunds is available on Golden Valley's website.