Understanding the Operating Summary // March 2026 CEO Column
This month, I want to draw your attention to the cooperative’s 2025 Operating Summary, which you’ll find below this article. This summary gives a quick look at LREC’s assets, liabilities, and other financial details — basically, how we’re doing as a cooperative. It also shows our total margins for the year.
When we talk about “margins,” part of that simply comes from any money left over after we cover the cost of delivering electric service. But that’s only part of the story. Margins also include dollars the co-op earns outside of what members pay. A good example is the capital credit allocation we received in 2025 from our wholesale power provider, Great River Energy (GRE).
As reported in the Operating Summary, this line item may give the impression that a large sum of money is at our discretion. But that’s not actually the case. Allocations are not the same as cash. Allocations can be used to determine total margins, but do not represent actual dollars that are readily available.
When LREC allocates capital credits to members, those dollars aren’t paid out right away. Instead, they help support the co-op — things like day to day operations, reserves, system upgrades, and repairs. Capital credits are only paid (or “retired”) when the co-op’s financial condition allows, and when the Board of Directors approves it. Until that happens, the allocation doesn’t have any cash value.
GRE works the same way. As a cooperative, GRE also allocates capital credits to its 28 member co-ops, including LREC. And just like ours, GRE’s capital credits aren’t paid immediately — the payments are issued later on, after approval from GRE’s board. In many co-ops, this can take 20 years or more.
I’m sharing this because it’s easy to confuse capital credit “allocations” with capital credit “retirements.” When you look at LREC’s 2025 Operating Summary, keeping that difference in mind will help you better understand the financial picture of your cooperative.
If you have any additional questions, please do not hesitate to reach out.
Cooperatively yours,
Joel Janorschke, CEO
