Capital Credits

The term “capital credits” can be confusing – especially anyone not familiar with cooperatives. As a cooperative, Consolidated Electric Cooperative is a nonprofit organization, so any margins, or money left over at the end of the year after expenses are paid, gets allocated to the members of the cooperative.

This means each member that contributed to the cooperative’s surplus gets capital credits put into a holding account until it is returned. That way, the cooperative can use the funds for leveraging loans to finance new lines and equipment, offset unexpected expenses such as storm damage, and for general operating funds. This is one way Consolidated Electric Cooperative saves money on interest costs and keeps electric rates low.

Then, depending upon the cooperative’s financial position, the Board of Trustees approves returning (retiring) a portion of capital credits back to members.

Current members will see the capital credit retirement as a credit on their December electric bill, while former members will receive checks in the mail. The dollar amount you receive depends upon how many years you have been a member of the cooperative and how much your particular rate (residential or commercial) has contributed to the cooperative’s annual margins each year.

Giving money back to members is another way that cooperatives show that their business focus is on you, the member, and not the bottom line like for-profit businesses.

Claiming capital credits for estates

To claim capital credits for the estate of a member, call our Member Service Department at
(800) 421-5863 for assistance.