Arrowhead Cooperative’s generosity funded from wallets of owner-members

The Arrowhead Cooperative Board will release $448,234.79 in excess of margin funds this month. As a non-profit, ‘margin’ funds are accumulated to provide readily available capital to cushion the cooperative’s financial needs. The term ‘margin’ is not to be confused with ‘profit’ since Arrowhead Cooperative is legally incorporated as a nonprofit entity. To date, the cooperative claims to have distributed $3.4 million dollars of excess margin funds. A significant operating margin is always held in reserve, regardless of the amount of capital credit dollars periodically released. This recent disbursement will be in the form of 2300 ‘capital credit’ checks issued ONLY to individuals and businesses that had purchased electric power in 1995 and 1996. Check amounts are based on the number of kWh purchased by each account. The highest kWh volume users, typically commercial customers, will receive substantially larger checks. Commercial customers, unlike residential customers, pay a discounted kWh rate and can write-off that cost as business expense. You would hope to trust that margin funds are derived from a premium added to kWh rates, not from Arrowhead’s monthly service charge, which is not tied to the amount of kWh purchased. Individuals receiving capital credit checks need NOT be current cooperative members. The promise of capital credit disbursements may have been an enticing ‘carrot’ to spur participation during startup of the cooperative, but periodically ‘returning’ such large sums of excess margin to ‘quarter-century-old’ accounts might arguably be considered poor management of the membership’s resources. Arrowhead’s recent ‘power adjustment’ overcharges were promptly credited last month without much fuss, why couldn’t excess margin be handled in a similar manner? Arrowhead Cooperative also funds many ‘philanthropic type’ endeavors. The monthly service charge is likely also inflated to cover these costs. The board regularly offers funds in support of other community non-profits, grants to sports/school groups and gives discounts, rebates at the annual breakfast meeting and other ‘free’ benefits to its owner-members. Arrowhead Cooperative’s generosity is always someway funneled from the wallets of its owner-members. Did you actually believe the plastic wrapped, full color, photo quality Arrowhead Cooperative calendar recently mailed to you…was a ‘free’ gift?

Bob LaMettry,
Grand Marais