The Cooperative Difference and Tax Reform
How will the new federal tax changes affect HomeWorks Tri-County Electric Cooperative?
They will have very little impact on us - because as a not-for-profit electric cooperative we do not pay federal taxes on electricity sales.
For-profit investor-owned electric utilities (IOUs) pay federal taxes. Therefore, the federal corporate tax reduction will result in lower expenses and higher profits for them.
That’s just one difference between the two business models. Another difference is what the companies do with their profits.
IOUs pay their profits in the form of dividends to shareholders/investors, who may not even be their customers. Electric co-ops like HomeWorks, owned by the members we serve, don’t have shareholders or investors. Instead, we return profits to our member-owners in the form of capital credit refunds.
We returned nearly $2 million in capital credit refunds to our members in April, 2019, and nearly $24 million since the mid-1980s.
That’s the cooperative difference.