Each spring, Central Electric Cooperative notifies members by mail of their capital credit allocation from the previous year. This allocation represents your share of the cooperative’s margins for that year. It’s important to note that this notice is not a bill credit or a refund. It simply shows how much equity has been assigned to your account.
As a member-owned cooperative, Central Electric operates differently from investor-owned utilities. After covering the cost of providing service, maintaining infrastructure, and meeting financial obligations, any remaining margins are not kept as profit. Instead, those margins are allocated back to members in proportion to how much electricity they used during the year. These allocations build your ownership equity in the cooperative.
Think of capital credits as your stake in the co-op. The more electricity you use and the longer you remain a member, the more equity you accumulate over time through these annual allocations.
Later in the year, the board of directors reviews the cooperative’s financial health and determines whether a portion of previously allocated capital credits can be retired, meaning returned to members. This decision is based on factors such as cash flow, system needs, and overall financial stability.
When a retirement is approved:
Active members receive a refund as a credit on their electric bill.
Former members are sent a check to the mailing address on file.
Capital credit allocations and retirements are a key part of what makes cooperative membership unique. They reflect your ownership in Central Electric and demonstrate how the cooperative operates for the benefit of its members rather than outside investors.