MIDLAND, Texas, Feb. 21, 2002 — Cap Rock Energy (CRE) announces the release of 1,302,355 shares of stock to 26,634 former members of Cap Rock Electric Cooperative. During a conversion process transforming the 62 year- old electric cooperative to a public stock company, Cap Rock Electric Cooperative returned all capital credits and membership interest to its members.
Members were given the opportunity to redeem their capital credits and interest accumulated while members of the cooperative, in one of three ways; discounted lump sum cash payment, credit on electric bills, or shares of stock in the newly created public stock company.
Over 69% of former members elected to receive stock. “The number of members choosing to receive stock is a clear mandate to us from former members that they value our vision. It is definitely a sign that they are committed to our overall philosophy for growth and vision in our effort to position ourselves for the deregulated marketplace,” remarks David Pruitt, President and CEO of CRE.
During this conversion process, CRE returned a total of $23,862,259. Since 1992, Cap Rock Electric has paid a total of $31,632,609 back to its members, in discounted cash payment, credit on electric bills, or issuance of stock. Typically, electric cooperatives return capital credits in 20-year cycles.
With this conversion, CRE not only becomes the first electric cooperative to restructure itself as a public stock company, but also the first electric utility to go public in 60 years. “Because there was no blueprint for us to follow, the process has been slower and more frustrating than we had anticipated,” states Pruitt. Cap Rock Electric was also the first electric cooperative to merge with non-contiguous cooperatives.
The cooperative acquired Lone Wolf Electric Cooperative, Inc. in 1991, Hunt-Collin Electric Cooperative, Inc. in 1992, and in 1999 acquired McCulloch Electric Cooperative.
CRE’s strategic objective is to become a national electric distribution company with community-focused local operating divisions. “Our strategy for achieving this objective is to expand our customer base by acquiring small to medium-sized electric distribution areas that have the potential for growth, which will create a homogenous customer base, with a diverse geographic and economic footprint in the industry. We believe that an aggressive campaign of mergers and acquisitions will help us to increase our customer base and thus put us in a position to compete effectively in a fully deregulated marketplace. In addition, this strategy should aid in our goal of achieving both weather-related and economic diversity in our customer base,” adds Pruitt.
CRE is awaiting a response for stock exchange listing.
CRE supplies electricity to over 34,000 meters in 31 counties in Texas. Its corporate office is located in Midland, Texas with service divisions in Stanton, Colorado City, Brady, and Celeste, and has a management and operation agreement with the City of Farmersville and a management agreement with Lamar Electric Cooperative in Paris, Texas.