Capital credits are a member’s share or portion of margins. Capital credits are calculated by WEC for everyone who purchased electricity during a year in which the co-op earned excess revenues called margins. No special action is required to start a capital credit account. Your membership with WEC activates a capital credit account in your name.

Capital credits are a member’s share or portion of margins. Capital credits are calculated by WEC for everyone who purchased electricity during a year in which the co-op earned excess revenues called margins. No special action is required to start a capital credit account. Your membership with WEC activates a capital credit account in your name.

Margins for capital credits vary from year to year depending upon the success of the cooperative. WEC sets rates to generate enough money to pay operating costs, make payments on loans, and provide an emergency reserve. At the end of each year, the Co-op subtracts operating expenses from the operating revenue collected during the year. The balance is called an operating “margin”.

Not necessarily. Each year WEC Board of Directors makes a decision on whether to retire some capital credits based on the financial health of the cooperative. When considering a retirement, the board analyzes the financial health of the co-op and will authorize a retirement if WEC can afford it. During some years the coop may experience high construction and power costs or unanticipated expenses such as severe storms which may result in the need to spend additional funds to repair lines. These and other events might increase costs and decrease member equity causing the board not to retire capital credits. All capital credits that are allocated to members are maintained until such time that the board retires them.

Your capital credits remain on the books in your name until they are retired or in other words until they are paid back to you. Payments are made over a long term period such as 20 to 30 years. As a result it is important to ensure that WEC has your current mailing address.

Electric utilities are capital intensive businesses requiring large investments in equipment. Like all businesses, WEC must maintain a balance between debt and equity to ensure financial stability. During periods of fast growth a large amount of money or equity is needed to build the wires and poles and buy power necessary to serve members. In order to fund this growth WEC has to borrow money from banks, reinvest member capital, or in some cases do both. By reinvesting your dollars into WEC, we are able to keep rates competitive by reducing the funds that must be borrowed from other sources.