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— which are assigned to each member based on their purchase and use of electricity. The co-op uses margins to level out cash flow and reduce borrowing, allowing us to invest in infrastructure like power lines, substations, and other electric system assets that provide all of the members with safe and reliable electricity. This model saves the JOEMC members money and helps keep rates stable over time. After using the money for a period of years to finance investments in electric facilities, it is returned to members.
To assure your return of capital credits and the fiscal health of your cooperative, the 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 co-op’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.
During the last week of February, your cooperative mailed “green letters” to members outlining the Board of Directors’ authorization of a capital credits refund. There is a space provided for the member’s signature and a return envelope so it may be mailed back to us.
This year, the capital credit refund authorization of $1.7 million will be for members who received electric service from JOEMC during 2002 and 2024. These refunds will comprise 100% of the remaining allocated capital credits from 2002 and 25% from 2024. All active members who received service during the years mentioned above will receive 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 $43.2 million in capital credits to our members, including this current retirement. It pays to be a cooperative member, and we’re pleased to provide good value and service to our members.
