LCEC – Lee County Electric Cooperative

Equity Ownership is the dollar value of your contribution in LCEC. Each year that LCEC earns a positive net margin, a percentage of what you pay for electricity is credited to you as equity. Your personal Equity Ownership Account reflects the total dollars credited to you over the entire life of your LCEC membership. The percentage added to your account annually is determined as follows: Throughout the year LCEC pays all of its operating expenses from money collected through monthly billing. Once all the operating expenses are paid, the amount left at year-end is our net margin. Since LCEC is a not-for-profit organization these margins are allocated (or credited) to the members’ accounts in an amount based on the amount of electricity purchased throughout the year. The greater the amount of electricity used, the greater the amount credited to the account.

In 1940, Lee County Electric Cooperative was formed to provide service to an area of Southwest Florida that no other electric utility would serve. Member provided equity has allowed LCEC to provide reliable electric service to a vast service territory.

Because the members own LCEC, members are responsible for providing a portion of the capital necessary to operate LCEC. This portion of the operating money is provided through your electric charges.

Business expenses involved in operating LCEC include paying the principal and interest on debt, purchasing equipment, paying wages, building substations, purchasing poles and electric lines, and providing electrical services to all of our members.

Without the equity ownership of the members, LCEC would be required to borrow additional money from outside sources in order to continue providing service to its members. The result of borrowing additional money would be increased expenses, due to an increase in debt and interest payments. To meet the increased expenses, additional money would need to be raised through higher electric rates. These increased rates would be paid by the members of LCEC.

Equity capital represents the customers’ share of net margins. Capital credits are the margins (profits) that are left over after all operating expenses are deducted from revenue. Equity capital is used to partially finance long-term capital projects, and a minimum level is required by lenders in order to extend loans to LCEC. A higher level of equity capital can reduce the cost (interest rate) of borrowed money.

Net margins are what remains after expenses are deducted from the revenue earned by LCEC during the year.

Whether or not your equity ownership is returned to you and how much is returned is evaluated annually by LCEC’s Board of Trustees. An annual return is dependent on the financial position of LCEC. There are certain mortgage clauses from our lenders that require LCEC to maintain minimum levels of specific financial ratios. When the Board approves a return, each member receives an equity retirement. If approved by the Board of Trustees, this return is a percentage of your account balance. The retirement is usually in the form of a check, but in some cases will appear as a credit to your electric bill.

Since the value of your equity ownership is not held in cash, it is not possible to receive a lump sum payment. The Board of Trustees determines each year if LCEC is in a financial position to offer lump sum payments to inactive members. If each member other than those approved by the Board were to receive a lump sum LCEC would have to significantly increase rates to fund the payments.

Your account is not a bank account that earns interest. It is an account that reflects the value of your ownership in LCEC. Your equity is invested in equipment and facilities such as trucks, poles, transformers, office facilities and lines, which are used to provide electrical service. If LCEC paid interest on each account, rates would increase to cover the additional expenses. Of course these higher rates would be paid by the members of LCEC.

Remember, equity ownership represents a return of some of the money you paid for electricity. It is not a dividend.

Yes, if the electric service is in your name you are entitled to equity ownership. Equity ownership is based on the amount of electricity purchased while an LCEC member. It is not based on your property ownership.

If you move out of the LCEC service area your equity ownership account remains open and you will continue to receive retirement checks based on the remaining value of your equity ownership as approved by the Board. When you discontinue electrical service with LCEC you will not receive additional annual allocations to your account because the allocations are based on the electricity you purchase.

In order to continue receiving equity retirements after you move, it is important to keep LCEC informed of your new address: Change of Address Form.

Unclaimed retirements are assessed a $1 per month administrative charge.

Equity is considered an asset, and therefore we may request legal documents and notarization of the Membership Status Change Affidavitto complete a name change.For the following changes, you may simply provide us with a copy of your Social Security card and driver’s license.

• Correcting the existing spelling of your name
• Correcting or adding a middle initial
• Adding Jr./Sr. or I/II/III/IV to your name

Adding a Joint Name to a Current Account – The current member may complete a
Membership Status Change Affidavit, adding the joint name and signing the form in the presence of a notary public.

Removing a Joint Name on a Joint Account – Either joint member may remove the other member by completing a Membership Status Change Affidavit. The affidavit must be signed in the presence of a notary public.

Changing a Name Due to Marriage, Divorce or other Legal Name Change – Please complete a
Membership Status Change Affidavit, signing the form in the presence of a notary public, and supply a copy of the marriage license, final judgment of divorce or other legal document.

All paperwork may be mailed to:
LCEC
Attention: Customer Care Operations
Post Office Box 3455
North Fort Myers, FL 33918-3455

Changing a Name Due to a Death – On a joint account, a copy of the death certificate is required to transfer ownership to the surviving member.

If the account is in the deceased name only, please provide a copy of the death certificate along with the completion of a Deceased Affidavit, signed in the presence of a notary public.

If you are the personal representative, please complete a Deceased Affidavit, signed in the presence of a notary public. (On this form, you will state who the heirs are to the estate under Item 1 and then designate the person to receive checks and their Social Security number under Item 2.) As the personal representative, you will sign the form at “Heir’s Signature” line regardless of whom the funds are made payable to. Also, please provide a copy of the letters of administration or will, and a copy of the death certificate.

Should the above scenarios not fit in with your circumstances, please contact the Customer Care Center at 239-656-2300 or 800-599-2356.

All paperwork may be mailed to:
LCEC
Attention: Customer Care Operations
Post Office Box 3455
North Fort Myers, FL 33918-3455

Business Name Change– Although the cash from an equity account is paid and received over a period of time (years), equity is still considered an asset and therefore, special consideration must be given.

Please complete the Business Name Change Affidavit and sign in the presence of a notary public. Additional documentation is necessary for the conditions below:

• Name Change for Close of Business – Please return with a copy of your final income tax return
• Name Change for Legal Name Change of Business – Please return with a copy of the Amendment to the Articles of Incorporation – (affidavit should be signed by an officer of the business)
• Name Change for Sale of Business – Please return with a copy of the purchase agreement or bill of sale – (affidavit should be signed by an officer of previous business)

If the owner of the company is deceased, and you are the spouse requesting the change, please provide a copy of his/her death certificate and a Deceased Affidavit, along with the other documentation mentioned above (the Deceased Affidavit would replace the
Business Name Change Affidavit ).

If you are the personal representative, please complete a Deceased Affidavit, signed in the presence of a notary public (on this form, you will state who the heirs are to the estate under Item 1 and then designate the person to receive checks and their social security number under Item 2). As the personal representative, you will sign the form at “Heir’s Signature” line regardless of whom the funds are made payable to. Also, please provide a copy of the letters of administration or will and a copy of the death certificate along with the documentation mentioned above for evidence of ownership of the business.