Basin Electric directors return $46 million to members

The Basin Electric Board of Directors authorized the retirement of approximately $46 million dollars in patronage capital at its November meeting. This year, Basin Electric will be retiring approximately 1/30^th of its total undistributed patronage capital as of the end of the prior year. This distribution represents patronage capital associated with business done in 2008 and is an important part of the cooperative structure. 

One of the benefits of being a member of a cooperative is that members own their cooperative, and therefore are entitled to the retirement of previously allocated margins that are undistributed. 

“In the cooperative model, cooperatives collect margin over time, which accumulate,” Chris Johnson, Basin Electric senior vice president and chief financial officer, said. “The margin collection is extraordinarily helpful for Basin Electric and enables us to generate excess cash flow in order to meet our covenant requirements, and it also fundamentally helps finance our business.” 

Johnson said these margin collections over time have helped Basin Electric fund operations, and more importantly, fund construction. 

Members will receive an official notice of their share of the patronage capital retirement, which is determined based on their power purchases during 2008, the year the patronage was originally allocated. The patronage capital retirements will be distributed in early December.