Capital Credit Refund Checks
Board OK’s Capital Credit Retirement
Operation at cost is part of the cooperative difference
Electric cooperatives aren’t like other utilities—you, as a consumer and a member own a portion of the business,and one benefit of that membership involves the allocation of excess revenue, called margins, in the form of capital credits.
Electric co-ops operate at cost— collecting enough revenue to run the business but without the need to raise rates to generate profits for distant shareholders. When Columbus Electric has money left over, it’s allocated back to you and other members as capital credits. When the co-op’s financial position permits, the co-op retires, or pays, the capital credits to members. This year the Cooperative will retire $300,000 to those of you who were members in the year’s 1977-78. Allocating and retiring excess revenue to members helps distinguish cooperatives from other types of electric utilities.
Capital credits are so-called because members provide necessary capital to the cooperative for it to maintain and operate the electric distribution system. These monies decrease the need to raise rates or borrow all the money necessary to pay for infrastructure. After a number of years, as financial conditions permit, we retire a set amount of capital credits.
These margins are the only real source of equity for electric cooperatives, so it is essential for a co-op to maintain the right balance between retiring capital credits to its members and retaining sufficient equity on our balance sheet. We do our best to strike that balance in an effort to provide you rate stability.
This is just one more way that we looking out for you!