CDEC, in Response
Dear editor,
In a Letter to the Editor in the Wed., March 11, 2026, edition of the Citizen, it was stated that Continental Divide Electric Cooperative (CDEC) reported a $1.25 million net loss on its 2024 IRS Form 990.
An IRS Form 990 can be misleading when it comes to electric cooperatives because the form treats patronage allocations like ordinary expenses – even though they are actually margins being returned to members. Remember, electric cooperatives are not-forprofit and operate at cost. Any excess revenues, called net margins, are returned to members in the form of capital credits. The amount an individual member ultimately receives when capital credits are retired depends on the amount of patronage, or business, that member does with the cooperative.
On the IRS Form 990, the allocation appears as “Benefits Paid to or For the Members” (Part I, Line 14). For 2024, CDEC reported nearly $4.1 million in patronage capital to be allocated to the Cooperative members. Because the amount to be allocated exceeded the Cooperative’s 2024 net margins, the form shows a negative $1.25 million on Line 19 (Revenue Less Expenses). For context, the Cooperative’s net margins for 2024 were $2.84 million, as reported by our auditor at the Cooperative’s 2025 annual meeting.
Another important consideration is this: That negative $1.25 million figure includes accumulated margins from our broadband division. Cooperative tax principles generally require that margins from a service be allocated to the members who used that service. However, CDEC’s current bylaws only authorize capital credit allocations related to electric service. As a result, margins associated with our Red Bolt Broadband services can accumulate but cannot be allocated as patronage capital unless our bylaws provide that authority.
This is why we strongly encourage our members to support their Cooperative and attend this year’s annual meeting. A bylaw amendment on this year’s ballot would allow for the allocation and eventual distribution of capital credits associated with Red Bolt Broadband and other future Cooperative services. A quorum of the membership is required to adopt this proposed bylaw change and others.
Please attend the annual meeting on Sat., April 25, at Grants High School. Registration and voting will be held from 8 to 11 a.m., with the business meeting convening at 11:15 a.m.
This cooperative is owned by the members it serves, and your participation matters.
Keith Gottlieb, President On behalf of the Continental Divide Electric Cooperative Board of Trustees