What Are Capital Credits?
The difference between a cooperative such as Slope Electric and an investor-owned utility is that a cooperative is owned by the members it serves. As a member-owner, you share in the profits, we call them margins, of the cooperative. At the close of each fiscal year, all revenue received in excess of expenses (i.e. margins/profits) is allocated back to the membership in the form of capital credits. This allocation is based on the kWh’s of electricity used during the same year.
As a nonprofit electric cooperative, Slope Electric allocates its annual operating margins to members receiving service during the year. These margins (revenue in excess of expenses) are based on patronage or total kWh’s purchased. These allocations are called capital credits.
Capital credits are retained as capital to operate the business of the cooperative and are refunded or retired as we say, to the members as financial conditions allow and as the bylaw provisions are met.
Retirements are the amount you receive back as a capital credit refund. It is a percentage of your total capital credit balance. The amount retired is decided annually by the board of directors based on the financial needs of the cooperative.
If you move from Slope Electric, please keep us informed of your address in future years. This will enable us to forward retirement checks when the capital credits are refunded for the year or years of your membership.