Regarding Kayla Patterson’s letter about LPEA, “
She compares farm co-ops to LPEA. Farm co-ops are venerable businesses but bear little resemblance to LPEA, which provides essential electric service 24/7 to 45,000 members and maintains a $300 million physical plant – including 3,700 miles of electrical lines.
LPEA’s margins, usually 4-5% annually, provide the capital needed to reinvest in complex operations. Margins, held in member’s accounts as capital credits, are retired on a 21-year cycle. If LPEA has accumulated enough margin to pay credits and to continue sound operations, member credits are paid annually. Tri-State, a co-op, also pays credits on a 20-year cycle.
LPEA is not behind in paying credits; and no one is having a good time with members’ money.
Patterson claims LPEA should pay interest to members. Interest is paid on borrowed funds. When people join, they are not loaning money to the LPEA. But by simply paying their bills they gain ownership and earn capital credit refunds.
LPEA directors’ fiduciary responsibility is to work in the best interest of co-op members. The purpose of exploring an exit strategy from Tri-State is to save money for members. Directors would fail their responsibilities by not investigating lower-cost, cleaner sources of power.
I am on the LPEA board and I am presenting facts on my own; I do not speak for any other director or the board.
Joe LewandowskiDurango
