Giving Credit Where Credit Is Due
Posted on November 23rd, 2021
Member-owned – that’s what First Electric is! As a member, YOU own a portion of this cooperative, which means you benefit from the excess revenue in the form of capital credits each year. That’s what sets electric cooperatives apart from investor-owned utilities. Since First Electric operates at cost, when money is left over, it’s allocated back to the members in the form of capital credits. We have been doing this since the 1940s and have returned a total of more than $124.3 million over the years. That amount will increase with the distribution of capital credits this December.
So, how do capital credits work?
Members use electricity provided by the co-op, and their usage and payments are tracked each year. Those payments are put to use within the cooperative. Anything left over after fulfilling financial obligations is referred to as margins. These margins are allocated back to you – the member – in proportion to the amount of electricity you purchased. The First Electric Board of Directors reviews the co-op’s financial position each year and determines the amount of capital credits to refund.
Who receives a capital credit refund?
When the Board of Directors reviews the financial position, they are looking at margins from multiple years. The years retired determines who will receive a capital credit refund. For example, if the Board votes to retire all of years 1992-1995 and a portion of 2005 through 2020, ANY person who was an active member during those years could receive a refund, even if they are no longer a member. Again, the amount of the refund would be based on a percentage of the members’ total accumulated capital credit balance. Members with a refund of more than $30 will receive a check, while those getting less than $30 will see their refund as a bill credit.
“Giving credit to you, the member-owner, is just one of the many ways electric cooperatives set ourselves apart from other utilities,” President/CEO Don Crabbe said.