Capital credits.
If you’ve read the magazine, you’ve probably seen the term. We talk about capital credits at least once a year, usually around the time we return hundreds of thousands or millions of dollars to our members.
That’s all fine and well, you might be saying, but what, exactly, are capital credits?
Good question. Let’s get into that and discuss how capital credits are now being returned to members in further detail.
What Are Capital Credits?
Southwestern Electric Cooperative is owned by the people it serves — not investors. When you sign up for service with Southwestern, you become a member-owner.
If the cooperative brings in more money than it needs to cover operating costs and emergency reserves (cooperatives call that money margins), the extra funds are allocated to members in the form of capital credits. They represent your share of the co-op’s margins and your ownership in the system you help to build and maintain.
What’s Happening This Year?
This year, Southwestern’s board of directors approved a general retirement of capital credits. They authorized the return of credits from 1998.
In past years, current members received a bill credit during a general retirement. Recently, though, that process changed.
Why You May Receive a Check Instead of a Bill Credit
Ahead of last year’s general retirement, your board of directors voted to distribute general retirement refunds by check when the amount is $20 or more. This allows members the flexibility to deposit their capital credit check in savings, use it to pay bills, or apply it to the purchase of household items.
- If your 1998 retirement amount is $20 or more: You’ll receive a check in the mail.
- If your refund is less than $20: You’ll see a bill credit on your next statement.
- Inactive members: No changes. Inactive accounts continue to receive refunds by check, as before.
I’m Worried I Threw Away My Check From Last Year
Have no fear—if you are an active member who was set to receive a 1997 retirement but didn’t cash your check, we will be reissuing that amount in addition to any 1998 credits due. Keep an eye on your mailbox to ensure you don’t miss a capital credits check.
When Will You Mail Capital Credit Checks?
We expect to mail checks in December. They will be mailed separately from your December electric bill.
Why Capital Credits Matter
Capital credits are a benefit of cooperative membership. Every time you pay your electric bill, you’re investing in infrastructure that powers our communities. When the co-op’s financial condition allows, we return that investment to you.
That’s the Cooperative Difference. It’s a system built on trust, accountability and shared ownership.