Licking Rural Electrification, Inc.

To Whom It May Concern: Licking Rural Electrification, Inc. d/b/a The Energy Cooperative has reviewed Case #[redacted] filed by Mr. [redacted] regarding his request to receive a “refund” of his money.  The Energy Cooperative has been un[redacted] to locate any record of Mr. [redacted] as a...

customer/member of The Energy Cooperative.  As a result, The Energy Cooperative is un[redacted] to respond to Mr. [redacted]’s complaint.  Mr. [redacted] may contact us at ###-###-#### if he has additional questions or concerns.

my account is in my wife's name, Mary. Account # [redacted]. I also have an account with you for gas.

From member servicesI am writing in response to [redacted]’s complaint noted above.  We did assess a $4.85 penalty to Mr. [redacted]’s account on 6/19/17 because his payment for his May bill due on 6/15/17 had not been paid.  We did receive his budget payment of $97 the following day...

(6/20/17).  On July 5th we received an overnight voice message from Mr. [redacted] and he stated he had questions about the bill and the late fee.  Our representative immediately credited the $4.85 late fee when she realized we had received his budget payment of $97 on 6/20/17.  She also called Mr. [redacted] by phone and left a voice message for him to discuss his account.  Mr. [redacted] did call back on 7/5/17 and spoke to one of or Member Service Representatives (Not the same one that had taken the overnight message).  Our representative (Kortney) noted on the account that Mr. [redacted] didn’t think his bill was correct.   She also noted she went over the billing including his budget and his price per gallon.  She also noted that Mr. [redacted] did not have his bill with him so he was not able to follow what she was saying.  She noted that he was going to get his bill and call us back because he still didn’t understand.  Our records do not show that Mr. [redacted] called us back.  Upon receiving your complaint on 8/15/17 I also called Mr. [redacted] at 614-940-3598 and left a voice message for him.  As of this date he has not returned my call.

To Whom it May Concern:This email is in response to Case #[redacted] regarding Mr. [redacted], II and [redacted]’s request to receive “refunds” for their contributions to The Energy Cooperative.  With the correct spelling of the complainants’ names, we have been able to locate information about their accounts.  Mr. [redacted] was a member of The Energy Cooperative (“TEC”) and received electric service from 1979 through 1984 and received gas service from 1998 through 2017 from TEC.  Mrs. [redacted] was a member of TEC from 1984 through 2017 and during this time received electric service from TEC.  TEC has acted in accordance with its Code of Regulations and has not improperly refused to “refund” Mr. and Mrs. [redacted].  TEC is a rural electric and natural gas cooperative and is a not-for-profit corporation under Chapter 1702 of the Ohio Revised Code.  The Cooperative is owned by the customers it provides electric and natural gas service to, and those customers are members of the Cooperative.  TEC’s Code of Regulations establishes a contract between the cooperative and its customers/members governing the provision of service. (See Article VII of the Code of Regulations, publicly avail[redacted] on TEC’s website).  Mr. and Mrs. [redacted] are gas and/or electric customers and thus are members of TEC.  The contract between the members and TEC states that TEC will provide energy service to the member, and the member will pay for this service.  Included in the price of energy service is a margin which represents the member’s equity in TEC (called “patronage capital”).  TEC’s capitalization includes margins contributed by members, supplemented by loans.  The capital provided by the members allows TEC to build facilities to provide electric and natural gas service.  In accordance with the Code of Regulations, the Board of Directors is responsible for deciding when to return these capital contributions to its members.  TEC’s Code of Regulations provides that patronage capital may be retired to the members if the Board of Directors determines that the financial condition of the Cooperative will not be impaired by the retirement.  (See Art. VII, Code of Regs).  In accordance with TEC Board Policy, the Board has determined that patronage capital will not be retired to the membership until such time as the overall equity of TEC is above twenty percent.  TEC’s sole and exclusive lender, the National Rural Utilities Cooperative Finance Corporation (“CFC”), has also set limitations on TEC’s ability to retire capital credits until TEC has reached an overall equity above twenty percent.  TEC’s overall equity has not reached twenty percent, and thus TEC is not in a position to retire capital credits to its members at this time.  Additionally, the Board of Directors has never provided return of equity to a member solely because the member ceases to be a customer of the cooperative (i.e. at the termination of electric or gas service).  Further, the Code of Regulations does not require retirement of patronage capital in this manner.  As a result, Mr. and Mrs. [redacted] are not entitled to retirement of their capital credits at this time.  However, TEC asks that Mr. and Mrs. [redacted] keep TEC advised of any changes in address so that TEC is able to distribute capital credits to Mr. and Mrs. [redacted] in the future.  TEC’s actions are fully supported by the contract governing the natural gas and electric service provided to Mr. and Mrs. [redacted].  We believe this addresses Mr. and Mrs. [redacted]’s complaint.  If Mr. and Mrs. [redacted] have any additional questions or concerns, please let us know.

Please note:  we requested and was granted an additional 10 days for this response.  We do not believe that the policy stated benefits the members of TEC regarding the question of Capital Credits. The topic of Capital Credits is raised at every annual meeting and heated discussions ensue. After review of the "Code of Regulations and the Articles of Incorporation, it does not appear that TEC has legal authority to commit capital as a pledged asset for mortgage purposes.  Additonally, with the sale of gas wells for $3.1 million, sufficient funds should be avail[redacted] to refund capital credits.Regarding the question of previous refunds, we are sending copies of refunds received previously in earlier years.  I would request TEC furnish me with a copy of the annual report for 2016 as well AS 2017 (as soon as it is avail[redacted]). Additionally, I request that a copy of the Federal or Ohio reports such as "Edgar" be suppl

Our member services supervisor spoke with [redacted] on 9/16/14 and scheduled her gas to be reconnected on 9/17/14.
TEC agreed to waive her deposit of $240 since this was her first disconnection for nonpayment.
TEC charged a $20 extended nonpayment fee and explained that this covers her fixed cost...

for the month of August while her service was inactive.  TEC also charged $50 reconnection fee.
TEC referred her to LEADS (Licking County Community Action) for assistance with future heating bills. 
Let me know if you need anything else.