There are many advantages to being a consumer-member of an electric cooperative like Cherryland Electric Cooperative. You have a vote in every election and you have easy access to cooperative leadership because we live and work in cooperative territory. After this local hometown control that makes us committed to our communities, my favorite advantage is the fact that we are a not-for-profit electric utility.
We are not driven by stockholders and earnings per share. We are driven by providing safe, reliable and affordable service to each consumer-member. Cherryland employees thrive on the challenge of keeping the lights on and our rates as low as possible. Our lean operation gives us the highest meter-per-employee ratio of all electric cooperatives in the U.S.
When the pandemic started back in March, we didn’t know what was going to happen to our financial condition. Our large commercial accounts were shuttered. Small businesses were limited. The biggest unknown was how much electricity would be used when everyone had to begin working from home for an extended period.
As we debated, watched and tweaked our financial condition, your cooperative did all it could to lend a hand to those in need. We extended our disconnect moratorium and granted more leniency for payment arrangements to give people time to get on their feet. To help further with bill payments, Cherryland donated to Father Fred and Echo and designated the funds for cooperative consumer-members only.
Your Board committed funds for helping small businesses and also gave forbearance to some of our economic development borrowers. Employees donated portions of their paychecks to help members with bills, clothing and groceries. We tried our best to live the cooperative principal of commitment to community.
Slowly, over the first five months of the pandemic, our financial condition emerged and the news was all good. While commercial sales inched back up so very slowly, they did gradually get closer to normal as the summer went on. Residential sales soared from the start of the pandemic through what was a hot summer season. When everybody went home, they used far more electricity than we anticipated. Residential sales more than offset the loss on the commercial side.
So, the late summer of 2020 found us looking at a very pleasant problem – record revenues with margins far over our budget. Our accounting team gave the Board several options: 1) put a bill credit on every bill in October and 2) retire capital credits in December. The board accepted both options.
The final approval of a December capital credit retirement number will happen later this fall. In August, the Board approved a $2.5 million dollar bill credit. This credit will be based on 2020 revenues to date and appear on individual bills in the month of October. Said another way, this is a 2020 revenue reduction that puts $2.5 million dollars in cash immediately into our local economy in the form of reduced electric bills.
The ability to take action in a significant and meaningful way while maintaining sound financial condition is a true cooperative advantage. We may not know what the pandemic will bring next but we do know what your cooperative can do now. Your Board of Directors, management and employees are extremely proud to serve our members in this way.
Be safe. Be kind. Stay healthy. Together, we will get through this.
For additional details regarding the Co-op Advantage Credit, visit our COVID-19 Response page.