Capital Credits

Capital Credits: An Overview

So what are these things called capital credits?

At a coop you are more than just a customer; you are a member. In fact, you become part owner of your local Co-op. As part of that relationship, you will periodically receive money back in the form of capital credit refunds.

Because WEC is a cooperative, owned by its members, it does not technically earn profits. Instead, any revenues over and above the cost of doing business are considered "margins." These margins represent a loan by the membership and it is used by the cooperative as operating capital. This capital allows WEC to finance operations and construction, with the intent that this money will be repaid in later years when the cooperative is financially able to do so. The return of money to members is what the capital credit process is all about.

♦  Summary

  1. WEC tracks how much electricity you buy and how much money you pay for it throughout the year.
  2. At the end of the year, we complete financial matters and determine whether there are excess revenues called “margins”.
  3. WEC allocates “margins” to members as capital credits based upon their use of electricity during the year.
  4. When the co-op’s financial condition permits, the Board of Directors decides to retire or pay capital credits.
  5. WEC notifies you of how and when you’ll receive your capital credits retirements.

Capital Credit Frequently Asked Questions
2021 Equity Distribution Plan

  1. Target distribution amount of $770,000 in the year 2021
  2. Method of retirement: part first-in-first-out (FIFO), part last-in-first-out (LIFO)
  3. Year and amount to be retired:
    • $310,000 of the Contribution in Aid of Construction (CIAOC), leaving an estimated unretired balance of $8,641,415.
    • $153,490 of the patronage capital allocated to Electric Members in 1996, making this year fully retired.
    • $142,510 of the patronage capital allocated to Electric Members in 1997, leaving an unretired balance of $232,468.
    • $154,000 of patronage capital allocated to Electric Members in 2020, leaving an estimated unretired balance of $1,390,323.
    • $2,500 of patronage capital allocated to REC members in 2006, leaving an estimated unretired balance of $16,256.
    • $7,500 of patronage capital allocated to REC members in 2020, leaving an estimated unretired balance of $168,748.
  4. Current electric members who are entitled to capital credits refunds will receive their refund as a credit on their bill, regardless of amount.
  5. Twenty $20.00 is the minimum check limit.
  6. Former members and REC members will be given the opportunity to contribute their 2021 capital credit refund to the Community Fund administered by Washington Electric Cooperative.
  7. All individual retirements will be reduced by any uncollectible or delinquent amount(s) owed to the Cooperative, as permitted by the Bylaws.
  8. No early retirements will be made to the estates of deceased members.