Capital Credits: The Cooperative Difference
As a member-owned, not-for-profit electric cooperative, Capital Electric operates differently than investor-owned utilities. When our revenues exceed our expenses in a given year, those margins (profits) are not paid out to shareholders; instead, they are allocated back to you, the member-owners, in the form of Capital Credits.
Capital Credits represent your equity—your direct ownership stake—in Capital Electric Cooperative.
How Capital Credits Work
- Allocation (Equity)
- Generation of Credits: Each year, any revenue remaining after all operating expenses are covered is calculated as the Cooperative's margin.
- Proportional Allocation: This margin is allocated back to every member who purchased electricity during that year. The amount allocated to your account is proportional to the dollar amount of electricity you purchased.
- Allocation Notice: Each spring (typically April/May), you will receive a statement notifying you of the amount of Capital Credits allocated to your account for the previous year. This is not a bill—you do not owe this amount.
- Retention (Investment)
- Once allocated, these funds are temporarily retained and pooled together. This collective pool of funds is used as the operating capital of the Cooperative.
- Purpose: These funds help Capital Electric remain financially stable and allow us to make long-term investments in the electric system, such as replacing power lines, building substations, and improving overall reliability—all without taking on excessive debt or raising rates.
- Retirement (Refund)
- Board Approval: When the financial condition of the Cooperative permits, the nine-member, member-elected Board of Directors approves a Capital Credit Retirement (refund).
- Refund Process: A portion of the credits is paid back to the members based on the age of the credit (typically retiring the oldest allocations first).
- How You Receive It: If you are an active member you will receive a credit on your bill. If you have moved off our lines, you will receive a check in the mail to the last address we had on file.