CAPITAL CREDITS OVERVIEW
A&N Electric Cooperative is a not-for-profit, owned by our members. That means the money left over at the end of each year after all expenses have been paid are eventually allocated as capital credits back to co-op members.
Each year, the A&N Electric Cooperative Board of Directors reviews the financial condition of the cooperative to determine if an allocation and retirement of capital credits can be made. Capital credits are retired using a percentage method that distributes a portion of the approved amounts to all eligible co-op members.
What are capital credits?
Capital credits are the cooperative's margins, revenue above operating costs, and expenses. A portion of the total capital credits are "retired" and returned to you in the form of a bill credit. Inactive accounts receive a check. Refunds are based on your electric use and how long you have been a member.
What's the difference between allocated and retired capital credits?
Allocated capital credits appear as an entry on the permanent financial records of the association and reflect your equity or ownership in A&N Electric Cooperative. When capital credits are retired, a bill credit is issued to you and your equity is reduced. Former co-op members, with an inactive account receive a check.
Can I use the capital credits I have allocated to pay my electric bill?
No. Allocated capital credits held in your account cannot be applied to your bill until the capital credits are retired by the board of directors.
How often will I receive an allocation notice?
Allocation notices are issued annually after the finances for the previous year have been audited.
What do I have to do to start accumulating capital credits?
Capital credits are calculated by A&N Electric Cooperative for everyone who purchased electricity during a year in which the utility earned margins. No special action is required to start a capital credits account. Your membership with the cooperative activates your capital credits account.
How are capital credits calculated?
The amount of capital credits you earn in a given year is based upon the amount of capital you contribute through the payment of your monthly bills. The more electric service you buy, the greater your capital credits account – although the percentage will remain the same. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits.
What percent of my bill is returned as capital credits?
The percentage of your total payment that is allocated as capital credits varies from year to year depending upon the success of the cooperative. Capital credits are only allocated for a year in which A&N Electric Cooperative earns margins. Since capital credits are members’ shares of the margins, no credits are allocated for a year with no margins.
Do I have to be a member for an entire year to earn capital credits?
No. Capital credits are calculated based upon a member’s monthly bills. If you are billed for service for even one month, you will accumulate capital credits, if the cooperative earned margins in that year.
What happens to the capital credits of a member who dies?
The capital credits of a deceased member may be paid without waiting for a general retirement. However, these estate payments are not automatic. A representative of the estate must request the credits by submitting an Application For Distribution Capital Credits Due An Estate along with supporting documentation. If retirement is approved, a check will be issued to the estate and the account will be closed.
Will I receive a capital credit payment every year?
Not necessarily. The cooperative’s board of directors must authorize a retirement before you receive a refund. When considering a retirement, the board analyzes the financial health of the company and will not authorize a retirement if A&N Electric Cooperative cannot afford it. Active members of the cooperative will receive their payment in the form of a bill credit. All other individuals owed capital credit money will be sent a check, so long as the retired amount exceeds $15.00.
What if I've moved and the post office returns my check to A&N Electric Cooperative? How do you handle unclaimed checks?
If a capital credit check is returned to us, your check will be considered UNCLAIMED. A&N Electric Cooperative will then code the check as undeliverable and post your name on our listing of individuals with UNCLAIMED money. Links to the list of unclaimed capital credits will be published in Cooperative Living Magazine and the local newspaper. You may also view the list by clicking the link provided at the top of this page. If you discover your name on the list, you may claim your check by contacting the cooperative. Once approved, a check will be mailed to you.
What happens to my capital credits when I leave A&N Electric Cooperative?
Your capital credits remain on the books in your name and membership number until they are retired. Because retirements are made up to 20 years after credits are earned, you should ensure that A&N Electric Cooperative always has your current mailing address.