Allocation calculations have been completed, and checks for patronage capital totaling approximately $700,000 will be mailed to Buckeye Rural Electric Cooperative members, starting this month and continuing into July.

Checks will be issued by BREC based on three business years, including 2005.

Members of record during 2005 will be part of the percentage disbursement of capital credits derived from margins logged during that year.

In addition, the co-op will retire over $226,000 in margins from the years 1974 and 1975. This is a general retirement to remove the accruals from the co-op’s books.

Over 18,000 current and former co-op members will receive checks in amounts ranging from $10-$100.

Capital credit totals less than $5 per account will be carried over to the next retirement cycle.

Capital credits are margins in excess of expenses, similar to profit in the investor-owned business world. However, instead of going to directors and stockholders, capital credits are accrued to the member-owners’ accounts.

Each member’s capital credits are calculated on an annual basis.

David Lester, president of the BREC Board of Trustees, said the co-op’s Capital Credit Committee met and advanced the idea of combining the FIFO (first-in, first out) method of retirement with a current-year percentage method, so old and new members alike could benefit.

Traditionally, retirements have been made in two ways: net present value payment to an estate after the death of a member or 100-percent retirements based on FIFO calculations. The latter might take 30 years or more to occur.

The new strategy of percentage retirement has developed in recent years, allowing more co-op members to share sooner on margins their electric use helped to create. The percentage method recognizes the contribution of all members over the course of a business year.

“Being a cooperative member means each of us is an owner of this business and eligible to share in its financial success when conditions permit,” Lester said. “We feel that the accrual and eventual payment of patronage capital is a duty to our membership and a means of showing what makes electric co-ops different from other types of utility businesses.”