Many things make electric cooperatives different from other electric utilities. First and foremost we are owned by those we serve and while there are many unique features of an electric cooperative, there is one thing in particular that we receive many questions about – capital credits.
Your cooperative is, by law, a non-profit organization. After all financial commitments are met, any excess revenue is credited back to the membership. The capital credit system, which was adopted at the 1947 annual meeting, provides a method for allocating each individual member’s share of excess revenues, or net margins.
The term “capital credits” is used because the actual money, which is classified as net margins, is invested in cooperative capital such as reserves or equipment. This money belongs to the members, but they have agreed to its use for capital purposes by accepting the capital credit provisions in the bylaws.
A Capital Credit statement is sent to members annually notifying them of the allocation of margins for the previous year. When financial conditions permit, a general retirement (or refund) of capital can be made. These retired capital credits are then paid back to the individual member. It is our policy to retire the oldest capital credits first. The last capital credits retired were those allocated in 2000 and 66% of 2001.
How well does this system work? Since adopting the capital credit system at the 1947 annual meeting, Vigilante Electric has retired more than $15.1 million to its members, and over the past three years the average amount of capital credits retired is almost $690,000.
One challenge of distributing retired capital credits is keeping track of every member we owe. Life is dynamic and people move. If you do have capital credits and leave our system, please keep us informed of your current address. The link to the right is list of past members that we are looking. Please review the list, and if you know the whereabouts of anybody on the list, contact us.