What are capital credits?
If you were able to purchase everything you want or need at cost, would you consider that a good deal? Of course! Unfortunately most goods and services are marked up so that a company can make a profit. However, electric cooperatives operate at cost; collecting enough revenue to run and expand the business, but with no need to raise rates to generate profits for distant shareholders.
At the end of each year, if your cooperative has excess revenue, that money is allocated (assigned) to you and all other members in the form of capital credits. The amount of capital credits allocated to you is based on the amount of electricity you paid for during that year. And your cooperative pays those allocated capital credits back to you, in the form of an annual check or credit on your utility bill when it’s financially possible. For those who are no longer cooperative members, you may receive a check in the mail.
In the meantime, your cooperative holds onto allocated capital credits to cover emergencies, such as a natural disaster or other unexpected events, and to safely expand our electric system.
All of which may require large-scale construction of poles and wires. This decreases the need to raise rates or borrow money to pay for the infrastructure. And when financially possible, your cooperative will retire (pay) a set amount of capital credits back to you.
Information about unclaimed capital credits
If you’re unsure if you’ve received a capital credit, contact your local electric cooperative. They will work diligently to help you determine if you have unclaimed credit and what you need to do to receive the benefits you’re entitled to.