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Capital Credits

$264505.93

2024 Return

$246364.21

2025 Return

Total Return to Members Since 1959

$20490350

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Capital Credits Go Paperless

At Community Electric Cooperative (CEC), we’re always looking for smarter ways to serve you—and that includes saving money. Each year, we spend over $200,000 mailing printed capital credit checks, monthly bills, and the Cooperative Living magazine.

That’s your money. And we believe we can use it better.

That’s why we’re modernizing the way we return capital credits. Beginning this December, your capital credit refund will no longer arrive by check in the mail. Instead, eligible members will see it as a line item on your December bill labeled: “Capital Credit Refund”

Beginning this December, your capital credit refund will appear directly on your electric bill!

Learn More About Paperless Capital Credits

What Are Capital Credits?

When you receive electric service from CEC, you’re not just a customer—you’re a member-owner. As a not-for-profit cooperative, any money left over after paying expenses is returned to our members. These refunds are called capital credits.

Capital Credits Explained:

Margins = Revenue – Expenses

Allocated to you based on how much electricity you used

Reinvested temporarily to build and maintain our electric system

Refunded on a rotating basis—in this case, 2006

Paperless Refund Process

To cut costs and improve efficiency, capital credit refunds are now delivered as bill credits.

Here’s How It Works

1

Check your December bill

2

Look for a line item labeled: “Capital Credit Refund”

3

Review our website list

4

Use the last four digits of your account number to verify your eligibility

Unclaimed Capital Credits

All members have until the last business day in September to claim their Capital Credit. Once past that date, all remaining credits will be considered abandoned.

Still Have Questions?

Please check your bill and our website before calling our office. This ensures our team can assist those with complex account issues as efficiently as possible.

Why the Change?

Each year, CEC spends more than $200,000 printing and mailing:

Monthly bills

Capital credit checks

Cooperative Living magazine

Going paperless is part of our broader mission to save money, operate sustainably, and return more value to our members.

Where Your Capital Credits Come From

Your ActionCo-op ActionYour Benefit
You pay your electric billCEC pays expenses, allocates remaining marginsMargins become capital credits
You use more electricityHigher allocation based on your usageLarger share of refund
CEC reinvests those funds into the systemBuilds reliability, avoids borrowingKeeps your rates low
Board approves retirement after 20 yearsCapital credits are returned to eligible membersYou receive a bill credit in December

What if I’ve Moved?

If you’re a former member who received service from CEC in 2006, you may still qualify.

Don’t miss your refund:

Update your mailing address

Check the recipient list annually

Refunds continue on a rolling basis

Update Your Contact Information

Frequently Asked Questions

What are capital credits?

A cooperative does not earn profits in the sense that other businesses do. Instead, any margins, or revenues remaining after all expenses have been paid, are returned to the members in proportion to their usage of the co-op’s services through capital credits allocations and retirements. Capital credits represent each member’s share of the cooperative’s margins and ownership of the co-op.

What is a cooperative?

A cooperative does not earn profits in the sense that other businesses do. Instead, any margins, or revenues remaining after all expenses have been paid, are returned to the members in proportion to their usage of the co-op’s services through capital credits allocations and retirements. Capital credits represent each member’s share of the cooperative’s margins and ownership of the co-op.

What do cooperatives do with capital credits?

Every business needs to maintain a suitable balance between debt and equity to ensure its financial health and stability. Capital credits are the most significant source of equity for most electric cooperatives. Equity is used to help meet the expenses of the co-op, such as paying for new equipment to serve members and repaying debt. Capital credits help keep rates at a competitive level by reducing the amount of funds that must be borrowed.

How does the cooperative determine who receives capital credits?

Capital credits are allocated to each member of the cooperative every year based on participation in the cooperative. The board of directors determines the basis for the allocation. Frequently, the allocations are based on such measures as the total dollar amount of services purchased or kilowatt-hours (kwh) of electricity consumed.

How are capital credits disbursed?

Each year the board of directors determines whether the co-op’s financial position permits the return, or retirement, of capital credits and, if so, what amount of capital credits will be retired.

The board also decides the method for determining which capital credits are returned. For example, many cooperatives retire capital credits using the First-in, First-out, or FIFO, method. That means that the capital credits that have been invested in the cooperative for the longest period of time are returned to members first. A cooperative using the FIFO method might return capital credits allocated in 1984 to members in 2004.

Other co-ops retire capital credits using the percentage method. That means that a portion of the total amount of capital credits allocated to a member over time are returned each year.

Another way to retire capital credits is to use a combination of methods, such as the FIFO/Percentage hybrid, which makes part of the capital credits retirement on the FIFO basis and part using the percentage method. The Last-in, First-out, or LIFO, method, which repays capital credits that have been invested in the cooperative for the shortest period of time first, is rarely used alone, but the FIFO/LIFO hybrid is a popular approach.

The approach that works best for an individual system depends on a number of factors, including the age and tenure of its membership.

Do members receive interest on capital credits?

Some cooperatives are prohibited from paying interest on capital credits by their articles of incorporation or other legal documents. Whether that is the case, co-ops do not pay interest on capital credits, because the money to pay that interest would have to be collected from members through higher rates.

What happens to a member’s capital credits if the member moves away from the system?

A member who terminates service no longer receives additional capital credits allocations. The balance in the member’s capital credits account is maintained until it is retired in full.

It usually is the member’s responsibility to notify the co-op of any changes in address so that the member can be located when it is time for the co-op to retire capital credits allocated to the member’s account.

What happens to a member’s capital credits if the member dies?

Capital credits in the member’s account belong to the member’s estate. In order to assist the member’s heirs in closing the estate, some co-ops offer a special capital credits retirement of the outstanding balance of the deceased member’s capital credits account, often at a discount.

Why are some capital credits retirements discounted?

In the interest of fairness to all members, some co-ops discount capital credits retirements, such as special retirements to estates, to reflect the net present value of making a capital credits retirement now that would otherwise be made at a later date. The smaller amount received today, if invested until the normal retirement date, would be equal to the normal retirement amount.