$2.4 million to be paid to members
CHELCO’s Board of Trustees approved the retirement of $2,412,578 in capital credits. CHELCO will mail members a check if the amount is $25 or more, while those with retirements less than $25 will receive a credit on their December bills. The retirements are for those who were members in 1997 and 2016.
So what are capital credits?
Electric cooperatives aren’t like other utilities—you, as a member own a portion of the business. One benefit of that membership involves the allocation of excess revenue, called margins, in the form of capital credits.
Electric co-ops operate at cost— collecting enough revenue to maintain, operate, and expand the business but with no need to generate profits for distant shareholders. When CHELCO has money left over, it’s allocated back to you and other members as capital credits. When the co-op’s financial position permits, the co-op retires, or pays, the capital credits to members in cash or as a bill credit.
The retirement of capital credits—so-called because members provide capital to the cooperative for it to operate and expand—depends on the co-op’s financial status. CHELCO uses the funds as capital primarilyto build and replace electrical facilities. This action decreases the need to raise rates or borrow money to pay for the infrastructure. After a number of years, if financial conditions permit, CHELCO’s Board of Trustees may decide to retire a set amount of capital credits.
Per cooperative by-laws, each year the board determines if capital credits can be retired and the amount based on the co-op’s financial condition and other considerations. This year CHELCO is retiring all capital credits from 1997 and a portion of 2016. Over the years, CHELCO has returned more than $30 million to members.
Your capital credits are reserved for you even if you leave CHELCO and move out of the area. It’s important to keep CHELCO updated with your current contact information.
“CHELCO has been consistent in its annual retirement of capital credits,” said CHELCO’s CFO Wayne Thompson. “I am proud to work for a company that gives back to the members we serve.”
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