People's Electric Cooperative's (PEC’s) Bylaws require that patronage dividends be assigned in an aggregate amount equal to the Cooperative’s Federal taxable income related to its patronage business. For the calendar year 2020, PEC did not have positive Federal taxable income and therefore will not make a patronage allocation for the year. This is the result of timing differences between Federal income tax law reporting requirements and regular financial reporting requirements (commonly referred to as “book” income). As you will see in PEC’s Annual Meeting program that will be mailed in September, PEC did report healthy Net Margins on the “book” income basis for 2020 and PEC continues to remain in a strong financial position.
This notice is for your information only. Patronage allocations are not available as either cash or credit on your electric bill. The refund of any current or prior allocations in full or in part at any time in the future shall be based on the decision of the Board of Trustees that the financial condition of the Cooperative shall not be impaired by making such refund. Patronage allocations are not required to be reported by you for income tax purposes until redeemed for cash and then only if you receive an income tax deduction for the payment made to the cooperative during 2020. Accordingly, it is unlikely that residential patrons will be required to report such allocations even when paid to them in cash or credited to their electric bill. If you cease to be a member, please keep us advised of your current address. Copies of the Cooperative Bylaws are available upon request. If you have any questions concerning this notice, please call Kyle Stuart or Mason Groves at (580) 332-3031.