Yampa Valley Electric Association to give $7.1M in refunds
May 16, 2012
Steamboat Springs — The Yampa Valley Electric Association will dole out a record amount in refund checks next month.
During the first week of June, the rural electric co-op will mail 15,041 checks totaling $7.1 million to Northwest Colorado residents who were YVEA customers in 1997 and 1998.
"This is the largest amount we have ever given out by at least a factor of two," YVEA general manager Larry Covillo said. "Some of our largest customers will get over $1 million, and the other checks range from that amount down to a few bucks."
The previous record refund amount was $3.2 million delivered in 2010.
Covillo said each customer's annual refund amount depends on the amount of electricity they used during the years in which the profits were made.
The electric co-op is a not-for-profit, and it sends out refunds each year from the profits it made several years before. YVEA holds onto the profits as capital credits that sometimes are used for construction projects and upgrades. The majority of the credits are held as reserve funds.
In 2010, the lag time between the profits and refund checks was 15 years. Covillo said this year's annual refund is much bigger because YVEA's board of directors is working to shrink that span of time down to 10 years and get the profits to customers more quickly. This is the first time the board has signed off on retiring two years of profits at once.
"The bottom line is it's the members' money, and we don't need to keep our equity level as high as it is right now," said Dean Brosious, chairman of YVEA's board of directors. "We looked at our current cash reserves, which are healthy, and we thought we would be able to retire two years' worth of profits this year."
He added the co-op currently has about $61.6 million in equity, much more than he thinks it needs.
"We basically made a commitment last year to set a goal to more aggressively retire these capital credits," he said. "The money belongs to our members, and we need to give it back to them."
Brosious said YVEA's board in previous years held onto more capital credits thinking they could be used to buy into a new coal-fired electrical generation plant. But Brosious said a contract extension with Xcel Energy means the board doesn't need to save up for that project anymore, and it has more than enough in reserve funds for capital projects.
According to a YVEA news release, the co-op distributed $12.7 million in refunds from 2007 to 2011. Covillo said about 7,500 of this year's checks will go to active co-op members, with the rest going to individuals who no longer are with YVEA.
The co-op started in 1940 and serves all of Routt County, most of Moffat County, and small portions of Eagle County and Carbon County, Wyo.
Refund recipients will find their checks in pink envelopes.
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com