Capital Credits… A Little Money Back in Your Pocket
The name “capital credits” may sound complex, but it’s a simple concept. Capital credits are the annual margins—revenues minus expenses of the cooperative—allocated to each member based on their individual purchase and use of electricity. Until they’re returned to members, capital credits are funds used as operating capital to invest in power lines, substations, and other electric system assets that provide all JOEMC members with safe, reliable electricity. After using the money for a period of years to finance investments in electric facilities throughout the co-op service area, it is returned to our members.
To assure your return of capital credits and the fiscal health of your cooperative, your Board of Directors has approved and put into place an equity management plan. The plan uses an industry-best standard that looks at the percent of member equity to total assets. It includes a schedule for the regular return of member equity in the form of capital credits.
The equity plan also determines how much of the cooperative’s investment in electric system assets will be covered through member capital and how much will be covered by long-term debt. Our goal is to balance member capital (equity) and debt to give members the lowest possible rates.
This year, the capital credit refund authorization of $2.6 million will be for members who received electric service from JOEMC during 2001 and 2023. These refunds will consist of 100% of the remaining allocated capital credits from 2001and 25% from 2023. All active members who received service during the years mentioned above will receive their refund in the form of a “capital credit refund” on their electric bill. All inactive members who received service from the cooperative during those years will receive a capital credit check in the mail.
Since 2002, JOEMC has returned close to $42 million in capital credits to our members, including this current retirement. It pays to be a member of a cooperative and we’re pleased to provide good value in addition to good service to our members.
