As a member-owned cooperative, Central Electric Cooperative does not earn profits like most other businesses. After Central Electric deducts costs and upkeep for yearly operations, the net profit is reinvested into the company to provide cash flow, collateral to show stability and to obtain loans. Any net profit over those costs is allocated back to our members in the form of capital credits.
Every member of Central Electric has shares in capital credits. The more electricity you buy and the longer you use the service, the more monetary equity (allocations) you accumulate. Allocations are the total sum of annual equity accrued by the member during their prior year of service.
Each spring, members receive notification of capital credits acquired the previous year. In the fall, the Board of Directors determines if a percentage of capital credits will be paid out, and if so, what amount it will be. The board makes the decision based on the financial condition of the cooperative. If Central Electric incurred additional costs for repairs due to storms, putting in underground cable, upgrading equipment etc., the board may decide to forgo retiring capital credits that year. When the decision is made to do a refund, active members will receive a credit on their December bill. Inactive members will receive a check.
As either a current member or a former member of Central Electric Cooperative, you are entitled to receive a dividend. Refunds will be issued to the member whose name is on the account.
Central Electric needs to maintain adequate cash flow and collateral to show stability to obtain loans. If the business showed no margin/profit, Central Electric would be unstable and unable to build, improve or maintain its electric system.
The only time a member would not receive the capital credits allocated to them would be if they had a bad debt at Central Electric, including any reasonable interest and late fees resulting from that debt. In this case, Central Electric would deduct what is owed to the coop and the rest of the capital credits, if any, would be refunded at the current refund schedule.
To receive your capital credit check once you leave our service, it is important to keep us informed of your current address. Many checks go unclaimed each year because we are unable to locate previous members.
Every year in Central Electric’s newsletter, there is a list of all unclaimed capital credits checks. If you think that you may have any unclaimed capital credits checks, please call our office at 1-800-477-2892. Please include your name, current address and phone number in your correspondence. You can also contact us online. Please include your name, current address and phone number in your correspondence.
Unclaimed Capital Credits are published in the March edition of Cooperative Connections Magazine.
If a member passes away, his/her spouse or representative may do one of two things:
1) They may have the capital credits put into an estate account which will continue to refund capital credits at the same rate as before the member’s death, or
2) Central Electric will provide forms to be filled out for an early retirement. However, with an early refund, which can only be done in the event of death of a member, the full amount will not be received. Capital credit allocations come from three levels: Central Electric, East River Electric, and Basin Electric. If an early retirement is selected, only the Central Electric portion would be paid. East River and Basin allocations would be forfeited.
In the case of a joint membership, if one member passes away, the capital credits revert to the surviving member.
Per our bylaws, only a natural person is eligible to receive an early retirement of Capital Credits. You will continue to receive refunds through general retirements. You may contact the billing department for additional information at 800-477-2892.
The best advice we can give you is to contact your tax preparer. They are the experts.