 Capital Credits
Questions and Answers
What are capital credits?
As a cooperative, we are here to provide a
service, not to make a profit or margin. Any revenue that is not needed to
cover the cost of providing service is set aside and divided among the
members in proportion to their patronage (how much electricity they paid
for during the year.) Your share of any operating margins is credited to
your capital credit account, and a Notice of Capital Credits is printed on
your bill once each year. You should keep this statement with other important papers.
What are margins?
Margins are what is left over at the end of
the year after all bills are paid. In other business organizations,
margins
would be called profit.
Why don't you send me the money?
The cooperative began with borrowed funds. The
co-op's mortgage holders have certain restrictions to safeguard their
investment. These restrictions, coupled with the impacts on the
co-op's equity, limit the cooperative's ability to refund capital
credits.
Is interest paid on capital credits?
No. If the Co-op paid interest on capital
credits, the money to pay the interest would have to be collected from the
member-consumers. We have one primary source of income--the sale of
electricity. Rates would have to be increased to pay interest on capital
credits.
If I move off co-op lines, will I still get my
capital credits?
Yes, but not until a refund is made to
members who furnished capital at the same time you did. Facilities were
built to serve you, and leaving the co-op's service area does not alter your
obligation to furnish capital for those facilities. Please keep us
informed of your current address so that you will receive your check when
a refund is made.
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