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What Are Capital Credits?

What Are Capital Credits?

As a cooperatively owned business, any margins generated by the Co-op are allocated to member/owners, proportionate to the amount of energy they purchased from the Co-op during the year. In order to operate prudently and to meet the requirements of our lenders, the Cooperative each year must budget to collect slightly more in revenue than our estimated expenses. These “margins”, which are allocated as capital credits, become patronage capital and are used by WEC for operating capital, necessary reserves, storm damage and other contingencies.

The May bill each year contains a notice to current members of their capital credit allocation for the previous year.  The capital credit allocation represents each member’s share of the margins realized by the Cooperative as of December 31.  These margins are allocated to all participating members in proportion to their patronage, which is their total billing for energy use in the previous year.  The current total of assigned capital credits that appears on the bill represents the total amount accumulated to each member’s capital credit account to date, minus any prior refunds that have been made.  This credit cannot be applied to the energy bill.

Patronage capital is paid back to the members when certain financial conditions permit and bylaw provisions are met.

Since 1998, the Cooperative has been refunding a portion of the capital credits that have accumulated to members’ accounts.  Capital credits are currently returned to both former and current members.  The Board of Directors believes this distribution method enables the Cooperative to continue its fiduciary obligation to those patrons whose capital has been invested in the system the longest, while fostering a better understanding by current members of the value of cooperative ownership.

Members who cease to purchase services from the Cooperative should notify us of any change in address as there will be future correspondence about the payment of accumulated capital credits.

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