The Enlightener

December 2007

Capital Credits – On The Way This Spring

Traditionally, Blue Ridge Electric has retired capital credits in December. The capital credits retirement date has now been moved to the spring to coordinate with a new format for delivering capital credits checks and annual report information.

Capital credits checks will now be delivered within a new annual report package that will be mailed to members in late May, 2008. Checks are sent to members whose capital credits retirement amount to $15 or more.

Members who qualify for a capital credits retirement of less than $15 will receive a credit on their bill instead of a check, if they have an active account. This bill credit will be applied to their electric bills, along with a notification appearing on their bill. These members will receive a reminder of the bill credit in their annual report.

Members who joined the cooperative in 2007 and are too new to qualify for a capital credits check or bill credit will receive general information about capital credits in their annual report.
One of the reasons for this change is to better inform members about capital credits, which is one of the key benefits of belonging to a cooperative. Research has shown that members want their cooperative to help them better understand capital credits. Combining it with the annual report is one way Blue Ridge Electric is working to inform members about capital credits.

The Capital Credits Process
Since the inception of Blue Ridge Electric, $23,378,769 in capital credits has been returned to members. Each year, a percentage of margins are returned to our members in the form of capital credits retirements upon Board approval, based on the financial health of the cooperative. In recent years, your Board has retired at least $1 million in capital credits annually. For 2008, your Board is evaluating the possibility of a $2 million retirement.

Capital credits are the margins allocated to the members of the cooperative based on their purchases from the cooperative. These margins are retained for a period of time and used as capital to invest in electric system assets. Until capital credits are returned, they are invested in power lines, transformers, substations, and other assets that provide members with reliable electric service.

What happens to the Capital Credits of a member who dies?
The capital credits of a deceased member may be paid without waiting for the general retirement. However, these estate payments are not automatic. The estate executor must request the credits by submitting a Certification of Entitlement form and a copy of the death certificate.

What happens to my capital credits if I move or am no longer a member?
Your capital credits remain on our records in your name and member number until they are retired. To ensure you receive your capital credits refund, you should always alert Blue Ridge Electric of any address changes.

The Benefit of Capital Credits
One of the advantages of a cooperative is providing “at cost” service to its consumers, which means cooperatives don’t exist to earn a profit. At a cooperative, there is no stock to be purchased or sold; the members are the owners of the business. Capital credits are a benefit of belonging to a cooperative and they represent your ownership in Blue Ridge Electric.

Statement of
Nondiscrimination

Blue Ridge Electric Membership Corporation is the recipient of Federal financial assistance from the U.S. Department of Agriculture (USDA). The USDA prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual’s income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, or call toll free (866) 632-9992 (voice) or (800) 877-8339 (TDD) or (866)377-8642 (relay voice users). USDA is an equal opportunity provider and employer.

Energy Efficient LEDs

While shopping for holiday lights, you may come across an alternative to electricity-hungry lengths of incandescent bulbs: light-emitting diodes (LEDs). Though the name sounds straight out of science fiction, energy-efficient LEDs are a way to cut electricity use, and holiday lights are just one way they’re being used.

LED technology breaks free of the hollow bulbs that all other lights use. When an electric current runs through the solid, semi-conductive materials in an LED, heat and light are the result. Although most LEDs are no bigger than a button, the number of uses for them is growing every year.

The power light on today’s TVs, computers, and other similar appliances now use LEDs. Even car brake lights, traffic signals, and railroad crossings are using grids of these small lights.
But why the change from traditional, hollow bulbs? A big draw is the technology’s staying power. A 75-watt incandescent light bulb will burn out after about 40 days of continuous use, and a compact fluorescent light bulb (CFL) after a year. An LED, however, can run constantly for four full years. And LEDs are currently as energy efficient as CFLs, meaning they use less electricity than an incandescent bulb in producing the same light.

The main factor keeping the technology off shelves and out of your lamps at home is cost. Although colored LEDs (think traffic signals) are cost competitive, versions producing white light are pricey. A 75-watt incandescent light bulb costs approximately $1. A comparable CFL can be purchased for $2.50. But an equivalent set of LEDs would cost more than $50, according to the U.S. Department of Energy.

Still, LEDs are a promising alternative to the inefficient incandescent bulb. CFLs are the best bet for consumers these days, but keep an eye out for LEDs as research continues. Once the technology is tweaked, they could stand to save you quite a bit in lighting costs – an important part of keeping that electric bill low.

By Scott Gates, who writes on technology and energy efficiency at the National Rural Electric Cooperative Association.

The Perspective

An Editorial by Chief Executive Officer Doug Johnson

The Benefit of Capital Credits

One of the unique benefits of cooperative membership is having an electric service provider that exists to look out for your best interests. The capital credits program is one of the best examples of this benefit.

We want to keep members well informed about capital credits because it represents your ownership in Blue Ridge Electric (see page 1 for details). I also want to share some good news about capital credits – the Board is evaluating a $2 million capital credits retirement for next year – nearly double the amount from recent years. This means a larger refund will be going directly back into the pocketbooks of our members.

There’s a larger story behind capital credits, however. To assure your return of capital credits and the fiscal health of your cooperative, your Board of Directors has approved an equity management plan. The plan sets an equity level goal of 30 to 40 percent of assets and includes a schedule for return of member equity in the form of capital credits. A cooperative’s equity level is one of the best indicators of its financial health as it reflects the maintenance of an appropriate level of equity/member ownership. Our members currently have about 34 percent equity invested in the cooperative, which is $106 million out of $316 million in total assets.

The equity plan also guides your Board in making decisions about key financial issues. It allows the cooperative to generate adequate capital to fund growth and operations without retaining member funds any longer than necessary.

Money to operate a cooperative comes from two sources: the amount members pay for electric service and from long-term loans. Our goal is to maintain a balance of member equity and debt in order to give members the lowest possible cost over the long term. The equity plan determines how much of the cooperative’s investment in electric system assets will be covered through member rates and how much will be covered by loans. It also helps us meet financial requirements of our lenders.

Capital credits, or member equity, equals member ownership in Blue Ridge Electric. We hope you like our new method of better informing you about capital credits through the annual report next spring, and we hope you appreciate the extra money we plan to retire to you. It’s another benefit of being served by an electric cooperative. Be sure to check your mail box in May, 2008, and don’t miss this important mailing that will contain your personalized capital credits information!

Resolutions Due

Members may now submit pro-posed resolutions for consider-ation of presentation at the 2008 Annual Membership Meeting.

Proposed resolutions should state their relevance to the cooperative’s mission, objectives, operations, and how they relate to the membership.

Resolutions must be in writing and received by 5 p.m., January 25. Address resolutions to Doug Johnson, PO Box 112, Lenoir, NC, 28645.

Proposed resolutions are reviewed by the Resolutions Committee for compliance with policy. Recommendations for resolutions to be presented at the annual meeting are made by the committee to the Board of Directors at their February meeting.

The Resolutions Committee is composed of chairpersons of the cooperative’s district Member Advisory Committees and members of the Board of Directors’ Policy and Member Relations Committee.

Published monthly by Blue Ridge Electric Membeship Corporation for its
72,491 member consumers.