Capital Credit Program
The most profound and distinct differences between electric cooperatives and other utility business structures is that electric cooperatives are not-for-profit organizations that are member-owned and member-controlled. As a not-for-profit organization, your Cooperative does not strive to produce profits for shareholders and investors but must maintain a sound financial position for the membership. Your Cooperative sets the electric rates high enough to cover the costs of providing service and at the end of the year, any funds that were collected above the cost of service are allocated to each member on the basis of the amount of energy used during that year.
These capital credits are retained by the Cooperative and used to build and maintain the infrastructure necessary to serve the members and service the long-term debt of the Cooperative. When the financial condition and cash position of the Cooperative permits, the capital credits are then retired and paid back to you, as members and owners. Every year your Cooperative mails capital credit statements to every Cooperative member notifying them of their allocated capital credit balance and the amount of capital credits allocated to them in the previous year. This statement shows each member their equity and ownership in the Cooperative. Your Cooperative was able to retire and return over $1.0 million of Capital Credits to our members in each of the past few years.
The founders of the electric cooperative program developed this unique business structure that by its very nature makes electric cooperative very accountable to the members it serves. This unique structure has contributed to the success of your Cooperative over the years and remains unchanged even today.